SYK

Interested in Mercury Systems Inc? Here are five stocks we like better. Record bookings and backlog drove Mercury Systems’ fiscal 2026 performance: fourth-quarter bookings surged 93.1% to $660 million, backlog rose 38.4% to more than $1.9 billion, and revenue reached nearly $290 million. Full-year revenue increased 7.9% to $984 million, while adjusted EBITDA climbed 25.7% to $150 million. However, fourth-quarter adjusted EPS and free cash flow declined, and the company still posted a $30 million GAAP loss for the year. Mercury expects fiscal 2027 revenue to approach $1.1 billion and adjusted EBITDA to near $200 million, supported by production growth and supply-chain improvements. Management also outlined potential additional defense demand, though much of it is not yet included in its outlook. Why Are Insiders Are Dumping Shares of Robinhood, Stryker, and Mercury Systems? Mercury Systems (NASDAQ:MRCY) reported record fourth-quarter bookings, backlog and revenue for fiscal 2026, as the defense technology company cited broad demand across its portfolio and raised its long-term organic-growth target. Chairman and Chief Executive Officer Bill Ballhaus said fourth-quarter bookings reached $660 million, up 93.1% from a year earlier, producing a book-to-bill ratio of 2.3. The quarter included the company’s largest-ever bookings for its Common Processing Architecture, or CPA, products, along with production awards in effectors, airborne applications, space and missile defense. → AMG’s Alternatives Boom Powers Record Growth Mercury Systems Up 27%: Financials Send Investors a Clear Signal Fiscal-year bookings totaled $1.5 billion, an increase of 49.8% year over year, while total backlog rose 38.4% to more than $1.9 billion. Mercury’s next-12-month backlog reached $1 billion, which Ballhaus said provides greater visibility entering fiscal 2027 and into fiscal 2028. Fourth-quarter revenue was a record nearly $290 million, representing organic growth of 6.1% from the prior-year quarter. Adjusted EBITDA was $49 million, or 16.7% of revenue, compared with $51 million, or 18.8% of revenue, a year earlier. Free cash flow was $29 million, down from $34 million in the prior-year period. → Microsoft's Maia 300 Chip Targets NVIDIA's AI Dominance Analysts Went All In On These Computer Stocks, Save Your Spot GAAP net income for the fourth quarter was about $1 million, or $0.01 per share, compared with $16 million, or $0.27 per share, in the same quarter last year. Adjusted earnings per share were $0.37, down from $0.47. For the full fiscal year, revenue increased 7.9% to $984 million. Gross margin improved 70 basis points to 28.6%, while adjusted EBITDA rose 25.7% to $150 million. Full-year adjusted EBITDA margin expanded 217 basis points to 15.3%. → The Metals Company’s Big Bet Now Comes Down to a License Mercury reported a GAAP net loss of about $30 million, or $0.50 per share, for fiscal 2026, improving from a loss of $38 million, or $0.65 per share, in fiscal 2025. Adjusted earnings per share rose to $1.06 from $0.64. Free cash flow was $68 million, compared with $119 million in the previous fiscal year. Executive Vice President and CFO David Farnsworth said full-year gross-margin improvement was driven primarily by lower manufacturing adjustments and reduced net estimate-at-completion, or EAC, change impacts. Operating expenses rose 2.5% during the year, though they declined by 150 basis points as a percentage of revenue. Ballhaus said Mercury is seeing increased volume on existing production programs and a transition of development programs into production. Domestic revenue, which accounted for about 85.8% of fiscal 2026 revenue, grew organically by 13% year over year. The company said its overtime revenue rose 23.6% in the fourth quarter, reaching its highest level in 15 quarters. Ballhaus attributed the improvement largely to material receipts and said the company has made progress aligning its supply chain with increased production demand. Mercury also recently announced a strategic agreement with Palantir to use AI software in material planning and factory operations. Ballhaus said the Department of Defense-sponsored initiative is intended to accelerate deliveries to warfighters and could potentially support revenue growth, margin expansion and cash-flow improvement. However, he said the company is still early in the initiative and has not incorporated benefits from the agreement into its outlook. International sales declined about 15% during the year, according to management. Ballhaus said Mercury had outsourced manufacturing in its international business to a contract manufacturer and experienced slower deliveries while that operation ramped. He characterized the slowdown as temporary and said the company expects the issues to be resolved over the next several quarters. For fiscal 2027, Mercury expects revenue growth approaching double digits, with total revenue approaching $1.1 billion. The company expects first-quarter revenue to be its lowest of the year but to rise by high single digits year over year, followed by revenue growth through the rest of the fiscal year. Mercury expects full-year adjusted EBITDA to approach $200 million, representing nearly 30% year-over-year growth, with adjusted EBITDA margin in the high teens. Management expects margin to increase through the year, as lower-margin legacy backlog is converted and newer bookings move through production. The company expects fiscal 2027 free-cash-flow conversion to approach 35%, below its 50% target, as it makes targeted investments in inventory, automation and factory optimization. Mercury expects first-quarter cash flow to be a larger outflow than normal because of material purchases intended to support anticipated growth. Free cash flow is expected to be higher in the second half than in the first half. Mercury ended the fourth quarter with $214 million in cash and cash equivalents and $227 million in net debt, down 19.5% from a year earlier. The company made a $150 million payment on its revolving credit facility during the fiscal year. Net working capital declined $18 million year over year to about $431 million. For fiscal 2028, Mercury provided reference points rather than formal guidance: low-double-digit organic revenue growth, adjusted EBITDA margin at the low end of its low-to-mid-20% target range, and free-cash-flow conversion returning toward its 50% target. Ballhaus said the company’s outlook includes only a limited amount of defense-market tailwinds that have become firm bookings. Potential increases in demand across CPA, effectors, airborne applications, space, missile defense and munitions have not been included in the outlook, he said. Mercury Systems, Inc (NASDAQ: MRCY) is a technology company that designs, manufactures and markets secure processing subsystems for aerospace and defense applications. The company's products are built to address the stringent security, safety and reliability requirements of mission-critical programs, with a focus on radar, electronic warfare, intelligence and other sensor and processing functions. Mercury's offerings encompass rugged embedded computing modules, high-performance radio frequency (RF) and microwave components, digital signal processing subsystems and secure networking solutions. Since its origins in advanced signal processing, Mercury Systems has expanded its capabilities through a combination of internal development and targeted acquisitions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Mercury Systems Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Stryker (NYSE:SYK) reported strong first quarter growth, supported by underlying demand and a recovery from a prior cyber incident. The company highlighted organic growth across its main divisions that was driven by customer volume rather than acquisitions. A wide gap between reported and adjusted earnings raised questions about ongoing costs that are weighing on profitability. For readers interested in other income focused healthcare ideas, the next logical step is to explore 11 dividend fortresses. Stryker is a US based medical technology company with a US$133.2b market cap that sells equipment and devices to hospitals and healthcare providers in the United States and internationally. For this quarter, the key question for investors is how its scale in medical equipment helps it absorb operational disruptions and the extra costs tied to them. Is Stryker's dividend sustainable? Check out what every dividend investor needs to know in our dividend analysis. Stryker declared a quarterly dividend of US$0.88 per share payable on 30 October 2026, with an ex date and record date of 30 September 2026. Keeping the dividend in place after the cyber incident and the extra costs in reported earnings points to management prioritising a steady cash return for shareholders. The gap between reported EPS of US$3.30 and higher adjusted figures signals that one off and ongoing costs are still affecting accounting profit. For dividend sustainability, the key question is whether cash generation, not just adjusted EPS, comfortably covers the roughly US$3.52 per share annualised dividend once cyber related and other restructuring costs are paid. The quarter is consistent with the existing Stryker Narrative that focuses on hospital digitisation and cyber resilience, since the company has moved from disruption to reporting stronger quarterly growth while still investing in systems. At the same time, higher costs and margin pressure tie back to the risks around rising expenses and integration spending highlighted in that Narrative. If we take a look at the community Narrative for Stryker, we can see how this news fits into the bigger investment story. The clearest test will be whether future quarters show reported earnings and free cash flow comfortably covering the dividend after cyber and integration costs, without relying heavily on adjustments. Investors can use the upcoming dividend record date on 30 September 2026 and the next set of results to compare payout levels with cash generation. For the full picture including more risks and rewards, check out the complete Stryker analysis. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SYK. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Stryker (NYSE:SYK) turned in one of its stronger quarters in recent memory on July 30, with sales climbing 9.4% to $6.6 billion and reported EPS jumping 44.1% to $3.30. The numbers arrive as the company works its way back from a cyber incident that had rattled its business, and CEO Kevin Lobo pointed to that recovery as proof of the company's resilience. But a closer look at how those earnings were adjusted tells a more complicated story about what is really driving the bottom line. Both of Stryker's segments grew at nearly the same pace in the quarter, which is notable given how different their products are. MedSurg and Neurotechnology sales rose 9.7% to $3.6 billion, with organic growth of 9.2%, almost all of it from more units sold rather than higher prices. Orthopaedics sales climbed 9.1% to $3.0 billion, with organic growth of 8.6%, also driven almost entirely by volume. That pattern matters: when growth comes from selling more products rather than raising prices or buying other companies, it points to genuine demand. Acquisitions and divestitures added essentially nothing to the total, so the 9.0% organic growth figure and the 9.4% reported figure landed nearly identical. Profitability moved the same way. Adjusted operating income margin expanded 170 basis points to 27.4%, and adjusted gross profit margin came in at 66.0%. Stryker also narrowed its full-year guidance, now expecting organic net sales growth of 8.3% to 9.3% and adjusted EPS of $14.95 to $15.10. The gap between Stryker's reported and adjusted results is where the story gets murkier. Reported EPS jumped 44.1% to $3.30, more than double the 17.9% increase in adjusted earnings per share to $3.69. That gap exists because Stryker excluded a long list of items to get to its adjusted numbers, including charges tied to acquisitions and integration, amortization of purchased intangible assets, structural optimization, goodwill and other impairments, costs to comply with medical device regulations, recall-related matters, and regulatory and legal matters. Each of those categories represents a real cost sitting somewhere in Stryker's business, even after it gets stripped out of the adjusted figures investors tend to focus on. The reported operating income margin of 25.2% also sat more than two full points below the adjusted margin of 27.4%, another sign of how much is being excluded. And the quarter's strength is measured against a stretch when Stryker was still working through the aftermath of a cyber incident, which makes the comparison an easier one to clear. Hedge fund ownership of Stryker rose from 67 funds to 81 in the most recent quarter, pointing to growing institutional conviction. Short interest sits at just 1.91% of the float, a level that suggests little organized skepticism toward the stock. As of August 11, Stryker trades at a forward P/E of 22.99, a multiple that assumes the growth investors just saw keeps going rather than fades. Stryker's second quarter shows a company genuinely rebuilding momentum, with volume-driven growth across both segments and a full year outlook that got more precise rather than more cautious. But the wide gap between reported and adjusted earnings, and the long list of items excluded to get there, means the headline numbers only tell part of the story. For the growth to hold, Stryker needs the volume gains in MedSurg and Orthopaedics to keep compounding without leaning on price. While we acknowledge the potential of SYK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Image source: The Motley Fool. Thursday, July 30, 2026 at 4:30 p.m. ET Chair and Chief Executive Officer - Kevin A. Lobo Chief Financial Officer - Preston Wells Vice President of Investor Relations - Nick Mead Operator: Welcome to the Second Quarter 26 Stryker Earnings Call. My name is Megan, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Following the conference, we will conduct a question-and-answer session. This conference call is being recorded for replay purposes. Before we begin, I would like to remind you that the discussions during this conference call will include forward looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC, Also, the discussions will include certain non GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8-K filed with the SEC. I will now turn the call over to Mr. Kevin A. Lobo, Chair and Chief Executive Officer. You may proceed, sir. Kevin A. Lobo: Welcome to Stryker's second quarter earnings call. Joining me today are Preston Wells, Stryker's CFO and Nick Mead, Vice President of Investor Relations. For today's call, I will provide opening comments followed by Nick with market trends and some product updates. Preston will then provide additional details regarding our results and guidance. Before opening the call to Q&A. Our second quarter results demonstrated the strength of our broad product portfolio and resiliency of our teams. Our recovery from the cybersecurity incident continued as we ramped overall production to meet ongoing demand and support patient care. We delivered strong organic sales growth of 9% including high single digit growth from both our med surg and neurotechnology and orthopedics businesses. Geographically, our US organic sales growth of 9% included double digit organic growth from our medical, trauma extremities, and endoscopy businesses and high single digit organic growth in OrthoTech and instruments. This growth was offset by supply disruptions in our peripheral vascular business. While our sales force hiring and integration has made great progress, the supply disruption resulted in a meaningful backorder situation with lost sales in the quarter. We have addressed the issue and backorders should reach a manageable level by the end of Q3. We remain confident in the long term outlook for peripheral vascular including the AVS acquisition which closed in the quarter. Internationally, our 8.9% organic sales growth was driven by strong performances in Australia and New Zealand, Germany, Canada, South Korea, Japan, India, and Brazil. We continue to see long term growth opportunities in our international markets, through strong commercial execution, and the introduction of products that have demonstrated success in The United States in recent years. From an earnings perspective, we delivered adjusted EPS growth of 17.9% reflecting improved gross margins as well as our ongoing commitment to rigorous operational execution. We exited Q2 with regained momentum and expect a strong second half of the year driven by high demand for our capital products, continued production ramp and strong commercial execution. We are narrowing our full year guidance, and our businesses are well positioned to deliver another strong year of financial performance. Finally, our financial position and cash flow generation remains strong, providing firepower to deploy capital. Preston will elaborate on that in his section. I would like to acknowledge our teams for their efforts in putting us on track to deliver another strong year of organic sales and adjusted earnings growth. With that, I will now turn the call over to Nick. Nick Mead: Thanks, Kevin. My comments today will focus on the capital and procedural environment as well as several key product highlights. Capital delivery was a key driver of the growth in the quarter, as we recovered from the cybersecurity incident and demand remained strong. We exited the quarter with an elevated backlog, and expect continued strength in the hospital capital environment through the remainder of the year. The U. S. Procedural environment remains stable, While there has been some commentary on softness in surgical volumes, particularly in discretionary procedures, we have not observed meaningful changes in volume trends. Our portfolio is highly diversified. With the vast majority of our businesses supporting high acuity, medically necessary, and emergent care clinical demand remains strong. Importantly, the fundamental drivers of health care demand remain firmly in place. Including an aging population, the ongoing need for hospital workforce productivity, and the increasing occurrence of chronic disease. Together, these trends continue to support durable demand for our differentiated product portfolio. Now I would like to turn to some product highlights. We delivered our best ever Q2 for Mako installations. Both in The US and internationally. And utilization rates across our installed base continue to trend upward. This year, we celebrate 20 years of Mako. And its evolution into a multi specialty robotics platform with applications spanning hip, knee, spine, and shoulder procedures. Furthermore, we recently announced the full commercial launch of Mako RPS in the US. Expanding our robotics portfolio and offering surgeons additional options across a range of care settings. With more than 2.5 million procedures performed globally and systems installed across 47 countries, Mako remains well positioned. To drive continued growth through innovation, clinical evidence, and expanding adoption worldwide. We are rapidly moving to full commercial launches of triathlon gold, and our Triathlon Medial Stabilized Insert. Both of which are generating strong interest and positive customer feedback. During Q2, we also gained approval on the PROPHECY patient specific planning and guides, for our new Encompass total ankle replacement system. And we have just moved to full commercial launch. Additionally, recently received approval and have initiated a limited launch for our Pangaea Trauma Plating System in Europe. To be followed by a full commercial launch during Q4. Within instruments, we look forward to the upcoming launch of the Sonopet 3 Ultrasonic Aspirator. These products are part of the steady cadence of next generation and innovative products across our broad base of businesses that fuel our growth. Let me now turn the call over to Preston. Preston Wells: Thanks, Nick. Detailed financial information has been provided in today's press release. Today, I will focus my comments on our second quarter financial results and the related drivers. Organic sales growth was 9% for the quarter, against a double digit comparable in the second quarter of 25. Pricing was flat, and foreign currency had a 0.4% favorable impact on sales. This quarter had the same number of selling days compared to the prior year. Adjusted earnings per share of $3.69 was up $0.56 or 17.9% from the same quarter last year. Driven by our strong sales growth a continued focus on operational excellence and a net benefit in the quarter from tariff related costs. Foreign currency translation had a favorable impact of $0.1 Now I will provide some highlights around our quarterly segment performance. For the quarter, MedSurg and Neurotechnology delivered organic sales growth of 9.2%, which included 8.9% of U. S. Organic growth and 10.5% of international organic growth. Instruments US organic sales rose 8.4% against the prior year comparable of 16.3%. Growth this quarter included a robust double digit performance in our interventional spine pain portfolio, as well as a strong performance from our Surgical Technologies business. Which includes Neptune waste management smoke evacuation, and SurgiCount products. Endoscopy US organic sales grew 10.2% reflecting strong demand across multiple areas of the business. Operating room infrastructure and renovations were a key growth driver including a robust performance from the recently launched Oculon Light. We also delivered strong growth in our urology and connected OR products within the core endoscopy portfolio, as well as in sports medicine. Where double digit growth was driven by its expanded range of shoulder implant products. Medical U. S. Organic sales increased 13.1% and included very strong double digit performances from our Sage, and Emergency Care businesses. From a product perspective, growth was led by preoperative skin prep products, Howard Cots and LifeVac 35. Which continues to generate strong customer interest and capture additional market share. Capital demand also remains elevated as evidenced by an increased backlog and strong orders as we exited the quarter. Including ProCuity beds and our SmartCare business, which includes Vocera and care.ai. Vascular U. S. Organic sales declined 6.7% from a year earlier, due to the operational disruption in peripheral vascular that Kevin discussed in his remarks. Partially offset by solid growth in our hemorrhagic portfolio driven by the SURPASS Elite flow diverter. Internationally, MedSurg and Neurotechnology organic sales growth of 10.5% included broad strength across endoscopy, medical, and instruments. Geographically, growth was led by robust performance in Australia and New Zealand, Germany, Canada, Brazil and India. Orthopedics delivered organic sales growth of 8.6% in the quarter, which included 9.1% of U. S. Organic growth, and 7.5% of international organic growth. U. S. Knees organic sales grew 6.2% reflecting the continued adoption of Mako for robotic assisted knee procedures. And momentum from our cementless knee products. U. S. Hips organic sales rose 4.9% reflecting the ongoing success of our Insignia HipStem and the Mako Revive hip platform. With our latest application having the expanded ability to address more difficult primary hip cases and hip revisions. U. S. Trauma and extremities organic sales increased 12.5% with strong double digit sales growth in our Trauma and Upper Extremities businesses, Pangaea continues to be a key driver of our growth in our Trauma business. And our multiyear growth momentum in shoulders was driven by the continued strong performance of our differentiated portfolio, and the recent full commercial launch of Mako shoulder on Mako 4.0. US Orthotech organic sales grew 9.2% driven by robust Mako installations. Internationally, Orthopaedics organic sales growth of 7.5% included strength in knees, OrthoTech and Trauma and Extremities. and was led regionally by Canada, South Korea, Australia and New Zealand, Brazil and India. Similar to the first quarter, the conflict in Iran had a modest impact on overall company growth. Now I will focus on certain operating and non operating items in the quarter. Our adjusted gross margin of 66% was 60 basis points favorable to the second quarter of 25. Reflecting the impact of the net tariff benefit I previously mentioned as well as improvements in business mix and cost discipline. Our adjusted operating margin was 27.4% of sales, which was 170 basis points favorable to the second quarter of 25. Driven by the gross margin improvement as well as lower adjusted SG&A as a percentage of sales due to our ongoing focus on spend discipline and margin expansion. Adjusted other income and expense of $101 million was $5 million lower than in 2025. We continue to expect our full-year 2026 adjusted other income and expense to be approximately $420 million The second quarter had an adjusted effective tax rate of 16.5%, reflecting the impact of geographic mix, and certain discrete tax items. For 2026, we continue to expect our full year effective tax rate to be in the range of 15% to 16%. Turning to cash. Ended the second quarter with approximately $3.5 billion of cash and marketable securities, and year to date cash from operations of $1.8 billion supported by a strong balance sheet and robust cash flows, we remain focused on M and A opportunities to drive top line growth as our primary capital allocation priority. Additionally, considering our elevated level of cash flow generation, and recent valuation compression across the medtech sector, we plan to resume share repurchases this quarter. And now I will discuss our full-year 2026 guidance. Considering our year to date results, our presence in attractive end markets largely supporting acute and emergent procedures and durable demand for our capital products, we are narrowing our full year guidance and now expect organic net sales growth to be in the range of 8.3% to 9.3% and adjusted net earnings per share to be in the range of $14.95 to $15.10 Our full year sales guidance reflects a modestly positive pricing impact Additionally, should rates hold near current levels, we anticipate a slightly favorable impact to both sales and earnings per share. With that, I will now open up the call for Q&A. Operator: At this time, we will open the floor for questions. You may remove yourself at any time by pressing star 5 again. We would like to remind callers to please limit themselves to 1 question and 1 follow-up question so we can accommodate as many participants as possible. Our first question will come from Joanne with Citibank. Your line is open. Please go ahead. Joanne Wuensch: Good afternoon, and thank you so much for taking the question. I actually have a lot. I am curious for guidance, the updated guidance, what your thought process was in narrowing it, particularly lowering the top end of the range. Which leads me to my second question of how you are thinking about revenue growth in the back half of the year. And then I am just going to go real straight into this. EPS you had a really nice beat in the quarter versus what we were looking for. But it does not look like it is flowing through for the full year guidance, and I am curious why. Thank you. Preston Wells: Hi, Joanne. I will take the first part of your question and then the EPS question, then we will have Kevin jump in on how we are thinking about sales from a remainder of the year perspective. So from top line guidance standpoint, really, we have half the year done, Obviously, we are coming out of the cyber event that impacted Q1. We have seen the momentum and the recovery starting to come back in Q2. And we have a good ways to go in the second half in terms of continuing that momentum to deliver on the guidance range. And quite frankly, when we look at what is left to do with the rest of the year and where we are with our products and with the markets right now, we felt like it was a prudent range to be in the $8.3% to 9.3%. Just looking at it in totality. Kevin A. Lobo: And so Kevin can talk a little bit about the revenue piece. A little bit in just a second. Let me just address your EPS question. So from an EPS standpoint, when we look at the beat in the quarter, it is driven partially by the tariff refunds that are happening that happened in the quarter. But as a reminder, when we talked about the first quarter earnings, and those were obviously well below ex expectations driven by the cyber event. There are costs that are coming through from a cyber perspective, both with loss absorption from manufacturing as well as R&D or our IT costs that we have that we that we are planning for as we come through the remediation that will offset that benefit. So when you look at it on a half year basis, it actually you can see those offsets are already happening. Preston Wells: Yeah. And related to your question about lowering the top end, Joanne, Preston's point, half the year is already done. Kevin A. Lobo: As we look at the production that we have to just the building of all of the capital equipment that is required. We have the orders. To really drive very high growth. it is just how fast can we actually make everything to deliver. I would say our ability to beat the top end would be hinging on 2 factors. 1 is the market would have to be strong in procedures. We expect it to be consistent. If it improves a little bit, that obviously gives us a tailwind. And then if we can ramp our products and including some of the new products that we are launching, ahead of what we are projecting right now, then that could cause us to actually raise on the top end. But right now, this is the best visibility that we have. With what we know now. Obviously, at the end of Q3, we will update our guidance and if things improve on a faster trajectory, then we could look to maybe move it up. But at this point, this is the best visibility that we have. And, honestly, on a $25 billion business, if you are growing at around the 9% range, it is still a pretty good year given that we were knocked out for almost an entire month. Thank you. Operator: Your next question will come from Robbie Marcus with JPMorgan. Your line is open. Please go ahead. Robert Justin Marcus: 2 for me. 1, Kevin, you know, 1 of the things or Preston, whoever wants to take it, 1 of the things we are all trying to figure out is what is underlying and what is catch up from first quarter I know you had talked to some of the capital being more second half weighted. The quarter was in line with expectations with some puts and takes, vascular being 1 of them. Hips being another, medical being on the plus side, How should we think about what is underlying and normal trend versus where you saw the recapture from first quarter? And if you are able to quantify anything, that would be helpful. And then I have a follow-up after. Thanks. Preston Wells: Yeah. So thanks, David. As we talked about really in the first the first quarter call, remember, we talked about the variability of the different businesses that we have. So it is hard to really pin down. Okay. This is specifically underlying versus catch up. I mean, there are some areas that was a little bit easier where there is just some catch up revenue to bulk. I would say for the most part, what we are seeing is we are seeing continued momentum across all of our businesses. We see really strong demand for our capital products. I think that is the 1 where we will see a more significant uptick in the second half of the year based on what Kevin talked about earlier with production ramping. Really getting ourselves back online to be able to produce at a faster rate to support the volumes that we have. So, really, I would say what you see really in the second quarter is primarily just the momentum of the underlying business primarily with a few other elements that are kind of maybe coming into play here and there throughout that business. Kevin A. Lobo: And the only thing I would add, Robbie, is we always have variability in our quarters given the range of businesses that we have. Would tell you peripheral vascular was certainly not something we were expecting. That supply disruption was acute, and we took the pain. But overall, we hit the number that we were aiming for. In the quarter, because we had some out performances in endoscopy and medical and even within medical, our bed business we have tremendous number of orders that we have a big job to catch up to deliver. So that actually was not a very strong performer in spite of medical's overall terrific growth. And it is not because we do not have the demand. it is just because making beds takes time. And we were out of production for a long period of time. So that is 1 particular product that we have a lot of catch up to do But there is a lot of noise underneath these numbers, but overall, business performed very well. The demand is still strong. And you are going to see a little bit of volatility across our businesses probably in Q3, Q4, but we feel good about the overall health of our businesses. And they are going to recover at kind of different points of time. And even the procedures, right, Rescheduling procedures was very, very hard. You know, no 1's ever gone through at least this kind of an event that we went through. And so it has created a little bit of inconsistency. across our businesses. But overall, for the full year, we are feeling really good. About our business. Robert Justin Marcus: Great. And 1 quick follow-up. Kevin, 1 of the things everybody's been concerned about, and you kinda touched on this, but I would love a little more color. Just the backdrop of slowing or stable procedure volumes. We have had a lot of mix data points. And the current and future state of the CapEx environment. Would love to get your thoughts on both of those. Thanks. Kevin A. Lobo: Yeah. Well, I think we have sort of talked about them in Nick's remarks. Look. We see the procedure environment as healthy in the businesses where we operate. We see the demand for procedures is strong. it is healthy. it is stable. it is whatever adjective you want to use. We do not see issues with the procedures that we play in. And capital, I would say, is very strong. If I look at our backlog, we have an elevated backlog We had a record month of Mako sales. We are just not seeing any issues related to capital equipment. We did see, and we have commented on this even in the last quarter, a slight slowdown in Europe related to procedures, but certainly not in the United States and not in the other markets around. Operator: Our next question will come from Larry Biegelsen with Wells Fargo. Your line is open. Please go ahead. Larry Biegelsen: Good afternoon. Thanks for taking the question. Kevin, just a follow-up on the revenue guidance. The organic growth needs to be about 11%, I think, in the second half. To reach the midpoint of the guidance. So is there any more color you can provide on what is driving your confidence to be able to recapture the lost sales to achieve that and, of course, offset the vascular supply issue you had. And just remind us of why you expect more catch up in the second half in the second quarter. I think that is just been a lingering question investors have had. Kevin A. Lobo: Listen. We lowered the bottom end of our range. That should give you some idea. We are not going to lower the bottom end of our sorry, We raise the bottom end of our sales guidance from 8% to 8.3%. Right? So if you are raising that, that means you really do not see a risk of us being able to deliver at the lower end. And that raising is based on just tremendous orders for our capital and that is just execution. All we have to do is make the products, and ship the products, and we can see the production ramp now that our plants have been operating pretty consistently since April 1. And so that visibility is very clear on the capital side. Even on the procedure side, so the small capital, we do have orders for small capital. We have pretty good visibility into those orders. And surgery schedules, and our business is feeling really healthy. So that 11%, we feel very, very confident. Delivering. Other otherwise, we would not have raised the lower end of our sales guidance. Larry Biegelsen: Any color just on how to think about the catch up in Q3 versus Q4? Thanks for taking the questions. Preston Wells: No. I think, again, like we said before, we are going to see that happening at different paces and different times. And part of it is, as Kevin said, the ramping up of production for those capital products that we can get those out the door. So I think you are going to see kind of a steady cadence across both quarters as we go forward. Operator: Your next question will come from Ryan Zimmerman with BTIG. Your line is open. Please go ahead. Ryan Benjamin Zimmerman: Thank you. Thanks for taking the questions. Preston, just you have talked enough about the top line, I think, with the questions. But can you spend a little bit on margins and the EPS guide for the second half of the year? If I look at kind of how the Street is thinking about Q3 to Q4, what is it that is going to drive maybe lower EPS in fourth quarter, which is kind of what the Street is assuming to get to the guidance. Is there additional expenses that are needed Is there a margin impact when you think about kind of the excess production that you are going to do that we need to consider, just help us think through the cadence there on the margin and P&L for the EPS guide. Thank you. Preston Wells: Sure. So first of all, we are still committed to what we talked about last year, which is our 150 basis points over the course of 3 years. So that is still our commitment. I think we have demonstrated the ability over the last couple of years to drive op margin. We are gonna continue to do that So teams are fast at work on continuing to find ways to get better from an efficiency and productivity standpoint. So that is the underlying kind of focus of the organization. We do have this year several moving you know, larger moving parts. So, obviously, with the cyber events, we have manufacturing shut down for some period of time, and so you have lost absorption and idle costs that are sitting there that we have to recover from. We also have a lot of work ahead of us in terms of the remediation and stabilization from cybersecurity perspective. So there is money that is going to be spent throughout the year to Support those 2 activities that are really related to the cyber event itself. In addition, we know that there are some pressures on some different areas around oil, and other raw materials that we are managing in this overall environment as well. that is offset by what I talked about before in the tariff refund piece of it. So we have a lot of moving parts with a lot of different items that are happening from a macro perspective that we are managing. So I think it is those elements that are still kind of what is left us with a little bit wider of a guide On the EPS side. But at the same time, we feel really good about being able to fall in that range. And certainly, as Kevin mentioned before, you know, as sales are delivering, the more we can do and deliver on the top line. That will we expect that to fall through EPS as well as we go. So it is really just managing those big macro items throughout the rest of the year is what we are going to be wrestling with. Ryan Benjamin Zimmerman: Okay. Very helpful. And then, Kevin, 1 for you. You know, we have seen physician reimbursement on large joint replacement come down over the last 10, 15 years. Pretty steadily. But this year, Medicare took a pretty big swing as much as 20-plus percent on knees, hips, shoulders, etcetera. I am just wondering if you have any thoughts on what the orthopedic industry is doing to maybe push back on this or whether you think this has any impact in future years on knee and hip replacement on the on the physician side? Kevin A. Lobo: Yeah. Listen. We the proposed rules are always, it is a sticker shock, but this has been going on ever since I have been at Stryker. For 15 years. See the proposed rules come out. They create noise, and then the normal course of everybody voicing their opinions and ends up getting to a reasonable place. And I do not assume that it will be any different this time. What you are seeing, of course, is, you know, there are shifting of site of care. Within orthopedic procedures. That is going to continue, but I question. And, frankly, for Stryker, that is a good thing. Because we like the ASC as a place where we can win not just in hips and knees, but across our entire portfolio And so that trend, I think, will continue. Related to reimbursement pressures. But the demand for joint replacement procedures is unabated Every day, 12 thousand people are turning 65. there is more and more people being active. So I do not see that changing, that dynamic changing, and I think the physicians will do fine. They are needed. And their voice will be heard. Operator: Your next question will come from Travis Steed with Bank of America. Your line is open. Please go ahead. Travis Lee Steed: Hey, thanks for the question. I wanted to push a little bit more on the U.S. Ortho numbers especially the U.S. hip number. Hard for us to see the underlying growth there. But I know it was a little lighter than I think some expected. So I do not know if anything on share shifts to the market and U.S. hips and knees that took some of the upside away this quarter? Preston Wells: Travis, in terms of U.S. hips, nothing that we would point to in terms of major share shifts or changes there. I think the 1 thing I would point out is, again, the delivery of the number this year was against a pretty large prior year comparable. So we had 8% growth last year in that space. So just it is really just a comparable. I think as we look at any of our numbers orthopedics, we always say, you know, 1 quarter does not make a trend. And so I think that is true here. So nothing major has changed in terms of anything that we have seen in from an underlying market conditions standpoint. Travis Lee Steed: Okay. And maybe a little more color on the Inari supply disruption. What exactly happened? Is it just the Inari business or other parts of vascular certain products? Does that is there a catch up in Q3 assumed in the guide? Or is there some lingering impact? I know you said manageable by the end of Q3. Curious how it works out on the numbers for Q3. Kevin A. Lobo: Yeah. The supply disruption, I am not going to get into the details of what it was, but let's just say it did cause a significant backorder specific to 1 plant in the Inari business. Which frankly makes virtually most of the products other than third-party products. A factor for us. So had an issue with that plant. That created the back order. The back order is pretty elevated right now. And we it will work down to a manageable level by the end of the quarter. We still look we do expect the business to grow in Q3 and to grow in Q4, but it is going to take a little time for that to build. So because of the backorder situation. So we finally got the Salesforce stabilized. We are feeling really good about things, and then we had this hiccup. And then, unfortunately, when we do acquisitions, we have felt this pain before with some of our other deals in the past, and obviously moving into our Stryker Salesforce and now into our Stryker manufacturing systems that we have experienced this. We did this with Sage. it is happened to us with Mako. it is happened to us We do not obviously enjoy it, but we do love the market. And we do love the products that they have, the pipeline that they have, and we will be back and it will just take us a little bit of time to dig out from under this backorder situation. Operator: Your next question will come from Vik Chopra with BMO Capital Markets. Your line is open. Please go ahead. Analyst: Kevin, you characterized the second half outlook as strong. I am just curious what key assumptions are embedded in the back half regarding volume growth, capital conversion and backlog realization? And then I had a quick follow-up, please. Preston Wells: Hey, Vijay. I will take that 1. In terms of the back half of the year, you know, we are not gonna give all the specifics in terms of what we are expecting across each 1 of those elements that you laid out. But what I can tell you is when we exited this quarter, the momentum that we see really on across the business. So even just from a procedural standpoint, as well as the capital the capital business And the way we look at the capital business, in particular, is looking at the order book, looking at how that is. I have mentioned even some of the products that are driving it. For medical, but we see that really across all of our capital businesses. And so it is really our ability to capitalize on that through the production ramp that Kevin's talking about. Is what gives us a lot of confidence in being able to deliver on the capital side. And the same thing on the procedural side, which really just continuing to run the offense behind Mako on the joint replacement side. And, obviously, with RPS hitting full launch as well, I think those are the things that we really believe in that are gonna help drive both sides of those businesses. Analyst: Great. And then just for my follow-up, you know, if you could just talk about the early feedback on Mako RPS. And how we should think about the ramp and impact in 2026. Thank you. Kevin A. Lobo: Yeah. Listen. We were in limited launch for the second quarter, and the feedback has been really outstanding. it is really easy to use. The surgeons really enjoy the experience. The haptics surprises them. Frankly, how you can do that in a handheld robot. So we are getting really great feedback, and now we are gonna move on to the full launch. There are there is a subset of surgeons that are not ready to move all the way to Mako. Who are only pinched in doing total knees, especially in the ASC. That this is gonna be a beautiful fit for. We have already had some conversions, but it is been small for now. But we are planning to really ramp this up and excited about this. Operator: Your next question will come from Matthew O'Brien with Piper Sandler. Your line is open. Please go ahead. Matthew Oliver O'Brien: Afternoon. Thanks for taking the question. Kevin or Preston, I hate to keep harping on this, this back half because I think everybody is really nervous now about your ability to hit the back half numbers. But you keep talking about this production ramp. Our facilities being able to meet this sizable ramp in the back half. Young know, I am no manufacturing expert. By any means, but are there any factors that potentially could impact your ability to make enough product? It seems like primarily in med surg. To be able to deliver a significant ramp in Q3 and Q4. It seems like it is a little bit more even in Q3 than we are accustomed to. Be able to get to the full year guidance because I think that is what everybody's really worried about. Kevin A. Lobo: Yeah. Listen. We are we are not worried. I mean, the guidance that we are giving is based on what we know We know how many shifts to run. We these are products that we they are not new products we are making. These are products that we know how to make. And that we have made in the past. So based on adding shifts and being able to plan for this, we feel really comfortable with the guide that we are giving to you. Obviously, we are gonna try to make even more if we can, but we are we are we are setting the guidance in a place we feel very comfortable being able to deliver. The orders are already there. So demand is not the problem. As it relates to capital equipment. it is really just being able to fulfill those demands and could we have an issue here or there? it is always possible. We think we have accounted for that. In the guidance that we have provided. Young know, we have a habit of hitting the numbers that we provide to you and potentially beating the numbers that we provide to you, and this is no different. When we give this guide, it is we give this guide with great confidence in our team's ability to deliver that. These are businesses we know. These are products that we know. Our plants are fully operational. After the cyber event. And so we have added shifts here and there. Those shifts are not performing well. And based on that, we have we have laid out our guidance for the year. Matthew Oliver O'Brien: Got it. And then just a follow-up on the peripheral vascular. I know you have the sales force in place, and then you have this hopefully short term supply issue. that is space, though, I mean, those procedures, they cannot be delayed. So just want to hear a little bit more about your confidence in and reenergizing and reaccelerating growth in that franchise. Getting through the supply issue? Do you think it is something where you could lose some share durably, or is it something where you can recover based on your early experience with that business? Thanks. Kevin A. Lobo: Yeah. Young are right. We did lose sales. I think I said that in my opening comments that we those are procedures you do not it is not like capital equipment. That you so we did lose business because those cases are emergent. We did prioritize our products. We had allocation process. As you can imagine. So we kept our highest volume, most loyal customers we kept them happy. And then the customers that ordered sort of smaller amounts, and we let of that business go because we had to. But we have a fully ramped up Salesforce, and that is something that we had not had in the past year. We have gone through a lot of turmoil with the signing of non competes and a lot of Salesforce turnover. We now have a very stable and hungry Salesforce, and they are going back on offense. And as this back order starts to come down, which had already, you know, starting to, I think we are gonna be in great position to recapture some of that business from those other accounts and actually fortify ourselves. So we are feeling pretty good about our ability to recover. We have great products in this business. We have a great brand. In this business, and, and we will be back. Operator: Your next question will come from Vijay Kumar with Evercore ISI. Your line is open. Please go ahead. Vijay Muniyappa Kumar: Hi, thanks for taking my question. I guess 1 on, you get asked on capital deployment and M&A historically. But curious given where the stock is, Kevin, and you guys just put up great numbers. Is there a bias towards share repo? I know you mentioned on the call. Maybe talk about the opportunity that you see you know, and what is the size that we could, think of from a share repo perspective? Thanks. Preston Wells: Thanks, Vijay. The as we look to think about our capital deployment, strategy, I mean, really, nothing major has changed. I mean, the m and a continues to be our number 1 priority, and our plan is to continue to find those opportunities that are gonna drive future growth. So that is first and foremost. What we have seen, though, as we continue to grow and scale, and continue to focus on delivering more efficient cash flows, it has given us the ability to try to return shareholder value in a few different ways. And so as a result, that is why we are talking now about potentially going back and doing share buybacks. And so we are looking at doing some more some of that in the second half of this year really focused on trying to just continue to use cash in a really efficient way. In terms of size and of what that could look like, we do have already approved from a prior approval by the board about a billion dollars available for us. I am not saying that is what we are going to do, but that is what we have available. And it is something that we are gonna take a look at. it is going to be really on deal flow and timing of that deal flow from an m and a standpoint. As well as what the current valuation is of our share. So those are going to be some of the elements to determine when we go out and do something and how much we do. But really, it does not mean that our focus and our number 1 priority is not changing from m and a, but we will also supplement it with some share buybacks this year. Vijay Muniyappa Kumar: that is helpful. And, Kevin, maybe 1 on backlog and orders. Any elongation of backlog or cancellations just given some of these concerns from cautious comments from hospitals. If you could comment on backlog and order book, that will be helpful. Kevin A. Lobo: Yeah. Look. As we mentioned earlier, we have an elevated backlog. As we exit the quarter. We have seen zero cancellations in our books, and our teams know how to deal with slight delays when we have issues with manufacturing, and our customers order a lot quite a bit in advance, or we are able to meter that. But thus far, we have not seen really any cancellations. And feel really good about the capital business. And getting back to your first question on cash flow, because you, Vijay, were 1 that used to challenge us a lot, if I remember 10 years ago, in cash flow. If you look at the amount of cash flow we generate now versus 6 years ago when we stopped doing share buybacks. We can now start to do some level of buybacks and still have huge amount of firepower to do acquisitions. So we still have a very, very robust pipeline of deals We are very disciplined, so we will pass if the price is not right. On deals. But we are going to execute m and a. No question about it. But given the sheer size of our cash flow, we can also start to do opportunistic share buybacks. And given where the price of stock is, we are going to start to do that. Operator: Your next question will come from Patrick Wood with UBS. Your line is open. Please go ahead. Patrick Wood: Amazing. Thank you so much. I will just ask the 2 upfront if I can. First 1, it is an area that does not get a lot of questions, but curious about SmartCare and the Smart Hospital that you guys pushed out. Vocera is obviously growing very strongly in the background. How the feedback to that has been and vision for that. So that is 1. And then the second is, obviously, business is very strong. I know that it is a slow tanker moving into the ASC that is been happening for very long time and over years. But have you seen any pickup of that in late? It just looks some of the data that we see that ASC volume shift seems to have picked up this year a little bit more. Curious if you are seeing that. Thanks. Kevin A. Lobo: Yeah. First, on SmartCare, super excited about the creation of the business unit. it is a new business unit that is started beginning of this year. The tech stack has been modernized, which took us a little bit of time. Everything's cloud-based. care.ai was already modern. Vocera, we had to kind of upgrade the tech stack. The orders were very strong in SmartCare. So we are expecting a really big second half of sales growth so big because the orders have really, really picked up since we have created the business unit, integrated the tech stack, we are getting great feedback from our hospital customers, and I am expecting a very strong second half of the year and future related to SmartCare. So bullish on SmartCare. On the ASC trend, it is more of the same, honestly. it is just that the limiting factor right now is construction of ASCs. And that just takes time. But every single hospital system you talk to are looking at doing that. You look at our hip and knee business, it is now in the high-teens percent. Pushing 20 percent of the procedures now being done in ASCs. And if you remember before COVID, it was 5%. So that is a pretty significant ramp, but it is steady. it is it is not gonna sort of inflect. I think it will just continue to be kind of on the current trajectory just based on construction. Of ASCs and or re rebuilding and renovations. Those just those things just take time. And we get to be on the front end of those with our communications business with booms and lights and we actually help customers design ASCs with our with our architects that are part communications business in Dallas. So we have pretty good line of sight into the trend on ASCs. I think just steady growth And now you are starting to hear even in Europe and other countries, they are starting to have an interest, and I think that trend will actually start to pick up around the world as well. it is very early there, though. Operator: Your next question will come from Richard Newitter with Truist. Your line is open. Please go ahead. Analyst: Hi. This is actually David here for Richard. Thanks for taking the question. I want to kind of pivot to IVL in Amplitude, the PV and Inari market? Could you talk about, I guess, timing of some of the clinical trials there and when you expect to come to market? And then just overall, what the market growth that you see kind of from a procedure perspective, I think, a couple of quarters ago, you said mid to high teens. Is that still the case? And then just finally, 1 of the things that we have heard about IVL, is that it brings pull through to other kind of coronary products. So given that hypothesis, how do we think about, you know, your desire to kind of build out that portfolio even more or even quicker than maybe FDA approval? Thanks. Kevin A. Lobo: Yeah. Okay. Well, thanks. there is a lot in that question. So look, we are excited about the AVS acquisition. The first product, the IVL, the first indication is going to be above the knee. And that will drop right into our peripheral vascular Salesforce. The feedback from our customers has been really positive. They love the method of action, the way the product performs. At least from what they have heard and what they have seen, the ones participating in the clinical trial. So we are we have submitted. We do not know when it will be approved, but there is a chance that we will start to be selling that product before the end of this year. We will keep you posted as we hear from the FDA on that. And we have commenced a trial on coronary indication. That trial will take a little while, so we will keep you posted on that, but it is certainly not something you can think about in the next 6 months to a year. it is gonna take longer than that. And then as you know, we never just do 1 thing. When we buy something, as we have done with Enari, we follow on with ADS, and we are gonna we will continue to look for other technologies to broaden the call point and the products that serve those call that is the Stryker offense. We have done that. Young have seen us do that. Repeatedly with neurovascular. We started with the Boston Scientific business, and then we quickly followed up with SURPASS and cons Concentric and so that is our offense. So we will continue to do that, but these products kind of stand on their own. They are they are very it is a it is a very compelling treatment area, huge demand, We will start to size the demand and the opportunity as those products come to market rather than spend time today. But we are very excited about the technology Feedback from surgeons has been incredible. And I am looking forward to getting those on the market. Operator: Your next question will come from Matthew Charles Taylor with Jefferies. Your line is open. Please go ahead. Matthew Charles Taylor: Hi. Thanks for taking the question. Guess I was hoping you could discuss the results in Q2 and the recovery going forward in terms of the 3 buckets that you had talked about before with revenue recognition, some catch up in procedures, and then the capital that you have been talking about a lot on this call. So could you be specific at all in Q2 in terms of how much rev rec or procedural recovery helped? And then, you know, which of those buckets, presumably the last 2, are gonna contribute the most in the second half? Preston Wells: Yeah. So as I mentioned before, really, the rev rec piece we would have seen, we did not we did not quantify that specifically certainly, that would have been a little a small piece of what happened in Q2. You are right. The last 2 buckets are the largest, particularly around the capital side of things. And so that, you will really see, as we talked about before, ramping in Q3 and q '4. So I would say we expected to see that. We have not quantified any of those pieces. Again, because across all our various businesses, it is a little bit different how they are all interacting. But the way to probably to think about it is the rev rec piece is done. And you really start to see the capital components of that and the rescheduling of procedures More so in Q3, Q4. Matthew Charles Taylor: Okay. Great. Thank you very much. Operator: Your next question will come from Matthew Blackman with TD Cowen. Your line is open. Please go ahead. Analyst: Good afternoon, everybody. Thank you for taking my questions. I have got 2. Both are Inari-related. I will just throw them out upfront. Maybe just to start quickly, Preston, just hoping for a little bit more color on Inari supply shortfall? How much of an organic drag was it? Our math says could have been 50 to 75 basis points. Is that sort of roughly the right ballpark as we think about the impact in the second quarter? And then, Kevin, I was hoping you could give us a bigger picture state of the union on mechanical thrombectomy market, maybe in 2 parts? What does the market look like today? it is harder for us to get a feel for the underlying market trajectory, and there are a few crosscurrents. You have a supply headwind to work through, your biggest competitor is in the throes of an integration. There are emerging players coming. But there is also a bevy of supportive data out there and still coming. So the real question is, how do you think about a sustainable market growth rate over the next couple of years? And could that growth step higher over time? And then the quick follow-up there is, how do you position mechanical thrombectomy and IVL when you have it later this year perhaps at the peripheral vascular call point? Is there an opportunity to cross sell? And are we underappreciating that aspect of these assets? Thank you, and sorry for throwing that all out there at once. Preston Wells: Yeah. That was a lot. I will let Preston start, and then I will finish. Yeah. I will take I will take the easy 1. You are in the ballpark. On the impact. The financial impact you stated was you are in the ballpark. Kevin A. Lobo: Look. As it relates to the market, this is a market that has huge potential to grow. it is kind of like if you think about neurovascular, the Mr. Clean study that happened, kind of created a big step up in the overall market demand. The equivalent of that is a PEERLESS II study that we just finished enrolling 1.2 thousand patients. We just finished enrolling. It takes roughly a year to do the data readouts on all the processing and everything. So that will come out sometime mid-next year. mid next year. And I think that will lift the entire market because this is really a high powered very, very important clinical trial, the most important. Mean, there are we have some other trials going on, but this is by far I would call it, the seminal trial within peripheral vascular that will really hopefully blow the market open. There are some new competitors. They tend to be more in just the aspiration portion of the market. As you know, it already has a full suite of products which includes a clot retriever, as well as the flow retriever and so it is particularly a full product portfolio. But I would say that is gonna be the biggest catalyst for the market to grow. And we are looking forward to that, that data readout. and that being published in the middle of next year. But, meanwhile, the market's still a good market even today. Our problems are internal to us. We will get those problems resolved. We will get back to the double digit growth, as we rectify our supply chain challenges. Analyst: Great. Thank you. Operator: Your next question will come from Caitlin Roberts with Canaccord Genuity. Your line is open. Please go ahead. Analyst: Hi. Thanks for taking the questions. Maybe just 2 for me. On the innovation front, you called out some recent product launches earlier in the call. Just wondering if the manufacturing disruption is impacting the timing or pace of any of the recent or upcoming launches. And just some more color on RPS. what is the site mix been between ASCs versus hospitals? And has the convert been more existing Mako surgeons adding to their capabilities with RPS, or have you been converting new to Stryker surgeons? Kevin A. Lobo: Yeah. Listen. it is really it is really early in the RPS days is what I would tell you. And we have done both hospital as well as ASCs. But it is been very early. We focused actually more on competitive users than we have existing Stryker users. that is been very intentional. And so that we are gonna continue to push probably much more on the competitive front in the early days and then eventually obviously, reach out to the Stryker surgeon. that is typically what we do. As it relates to ramping new products, I would tell you that probably Triathlon Gold is the 1 that is just a little bit slower out of the gates than we would like. Just because we lost production for a few weeks. But the demand for triathlon gold is very good, and we are ramping the production. But that is probably the 1 Of course, if you close your plants for a few weeks, weeks, sorry, that is gonna delay, you know, your ability to get the sets out as-- and instruments and everything out as fast as you would like. But nothing in a material way. So we are we are really excited. If I think about something like total ankle, with prophecy, we did not have the prophecy planning and guides approved. So we were all kind of on only a limited launch anyway. And so that production really was not hurt as much. So it kind of varies by product. But now that we have all our plants humming, we do have a lot of new products coming scaling in the second half and in the case of Sonopet launching. In the second half. And that is gonna be an extra catalyst to help propel our growth. Operator: There are no further questions. I will turn the call over to Kevin A. Lobo for closing remarks. Kevin A. Lobo: Well, thank you all for joining our call. As you can see, we have definitely fought back from the cyber event, delivered an overall growth that was in line with what we planned. And we have narrowed our guidance where we feel like we can deliver a very strong year for Stryker, and we look forward to sharing our Q3 results with you in October. Thank you. Before you buy stock in Stryker, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Stryker wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Stryker (SYK) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Stryker (SYK) is back in focus after its second quarter 2026 earnings, reporting sales of US$6.59b and net income of US$1.28b, alongside a sharp market reaction to the release. See our latest analysis for Stryker. The 1 day share price return of Stryker fell 6.42% on the earnings release, which pulled the year to date share price return down 6.46%, while the 5 year total shareholder return of 30.66% still reflects longer term gains. If Stryker’s move has you reassessing healthcare exposure, this can be a useful moment to scan other medical technology and related opportunities using the Simply Wall St screener for 41 healthcare AI stocks Stryker is now trading at a discount of about 23% to one valuation estimate and roughly 18% below the average analyst target after that earnings drop. Does that discount reflect an opportunity, or is it a fair price for the risks? The most followed narrative currently places Stryker’s fair value at $386.80, above the last close of $325.70, which helps frame the recent earnings pullback. Read the complete narrative. Want to see what sits behind that valuation gap for Stryker? The narrative leans on compounding revenue, rising margins and a richer earnings multiple. Curious which forecasts really move the fair value line. Result: Fair Value of $386.80 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Stryker’s story could change quickly if prolonged EU regulatory delays or sustained supply chain disruptions continue to weigh on product launches and margins. Find out about the key risks to this Stryker narrative. If the mixed tone around Stryker has you unsure, this is a good moment to review the data yourself and move quickly to shape your own view using the 3 key rewards and 2 important warning signs If Stryker’s latest move has sharpened your focus, do not stop here. Use this momentum to size up fresh opportunities that match your investing style. Spot potential value opportunities early by reviewing companies highlighted in the 55 high quality undervalued stocks. Target reliability by focusing on income opportunities screened through the 9 dividend fortresses. Prioritise resilience by zeroing in on companies identified in the 81 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SYK. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Stryker Corporation’s recently reported Q2 2026 results showed sales rising to US$6,589 million and net income to US$1,276 million, with both basic and diluted EPS from continuing operations increasing compared with the prior year period. Management also highlighted 9% organic sales growth, recovery progress after a March cyberattack that disrupted operations, and a slight increase to full-year adjusted EPS guidance while planning to resume share repurchases. We will now examine how this combination of strong earnings, raised guidance, and post-cyberattack recovery shapes Stryker’s broader investment narrative. Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. To own Stryker, you need to believe in sustained demand for its medical technology, especially robotics, and its ability to manage operational setbacks. The latest quarter reinforced that story with higher sales and earnings, a modestly raised EPS outlook, and visible recovery from the March cyberattack. In the near term, the key catalyst is execution on backlog and product launches, while the biggest risk remains ongoing supply and logistics disruptions; this quarter suggests progress, but not a complete resolution. Among recent announcements, the US commercial launch of the Mako RPS robotic power system for total knee replacement stands out. It ties directly into Stryker’s growth thesis by broadening its robotics offering and potentially deepening its presence in both hospital and outpatient settings. When you set this alongside the 9% organic sales growth and record Mako installations reported in Q2 2026, it underlines why many investors focus on the company’s robotics and digital platforms as key drivers, even as they monitor supply constraints. Yet, beneath the recovery headlines, investors should be aware that persistent supply chain disruptions and backorders could still... Read the full narrative on Stryker (it's free!) Stryker's narrative projects $32.6 billion revenue and $6.5 billion earnings by 2029. Uncover how Stryker's forecasts yield a $386.80 fair value, a 19% upside to its current price. Seven members of the Simply Wall St Community currently estimate Stryker’s fair value between US$331.44 and US$424.53, highlighting how far opinions can stretch. Set against Q2’s 9 percent organic growth and raised EPS guidance, this spread invites you to compare differing views on how much supply chain risks and post cyberattack execution might shape the company’s performance over time. Explore 7 other fair value estimates on Stryker - why the stock might be worth just $331.44! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Stryker research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision. Our free Stryker research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Stryker's overall financial health at a glance. Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters: AI is about to change healthcare. These 41 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Capitalize on the AI infrastructure supercycle with our selection of the 57 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 29 best rare earth metal stocks of the very few that mine this essential strategic resource. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SYK. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Stryker Corporation? Here are five stocks we like better. 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 the earlier 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. 3 Healthcare Giants Just Raised Dividends—Here’s Who Pays the Most Stryker (NYSE:SYK) 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 said 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%. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Why Are Insiders Are Dumping Shares of Robinhood, Stryker, and Mercury Systems? “We exited Q2 with regained momentum and expect a strong second half of the year,” Lobo said, 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 said 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. → Microsoft Just Flipped the AI Spending Narrative Overnight Beware the Death Cross: 3 Stocks Triggering This Spooky Signal 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. → Carrier Earnings Could Send the Stock to a New All-Time High 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%. Nick Mead, Stryker’s vice president of investor relations, said capital delivery was a key contributor to quarterly growth as the company recovered from the cybersecurity incident. Stryker exited the quarter with an elevated backlog and expects hospital capital demand to remain strong through the rest of the year. The company said it recorded its best-ever second quarter for Mako installations in both the U.S. and international markets, while utilization across the installed base continued to rise. Mako has been used in more than 2.5 million procedures globally and is installed in 47 countries, according to the company. Stryker recently began the full commercial launch of Mako RPS in the U.S. Lobo said early feedback from the limited launch was strong, particularly around the system’s ease of use and haptic technology. He said the handheld robotic platform could be especially suited to a subset of surgeons performing total knee procedures in ambulatory surgery centers. Other product activity included the move toward full commercial launches of Triathlon Gold and the Triathlon Medial Stabilized Insert. Stryker also received approval for Prophecy patient-specific planning and guides for its Incompass total ankle replacement system and initiated a limited European launch of its Pangea trauma plating system, with a full commercial launch expected in the fourth quarter. Lobo said a supply disruption at one plant in the Inari business created a significant backorder situation and led to lost sales in the quarter. The company expects backorders to return to a manageable level by the end of the third quarter. Stryker said it has stabilized its Peripheral Vascular sales force and expects the business to return to growth in the third and fourth quarters, though recovery will take time as the backorder is reduced. Lobo said the company prioritized high-volume and loyal customers during the supply constraint. The company also closed its acquisition of AVS during the quarter. Lobo said AVS’s intravascular lithotripsy product for above-the-knee use has been submitted for approval and could begin selling before the end of 2026, though the timing remains dependent on the Food and Drug Administration. AVS has also begun a coronary indication trial. Lobo said Stryker expects the PEERLESS II study, which recently completed enrollment of 1,200 patients, to provide an important data readout around the middle of 2027. He said the results could help expand the Peripheral Vascular market. Stryker narrowed its full-year outlook and now expects organic net sales growth of 8.3% to 9.3%, along with adjusted earnings per share of $14.95 to $15.10. The company said its guidance assumes a modestly positive contribution from pricing and could receive a slightly favorable impact to sales and earnings if currency rates remain near current levels. Wells said the second-quarter EPS result included tariff refunds, while cybersecurity-related manufacturing loss absorption, idle costs, remediation spending and information technology costs are expected to offset that benefit over the full year. The company also cited pressures related to oil and other raw materials. Stryker ended the quarter with approximately $3.5 billion in cash and marketable securities and generated $1.8 billion in cash from operations year to date. Wells said acquisitions remain the company’s primary capital-allocation priority, but Stryker plans to resume share repurchases during the current quarter amid elevated cash generation and what it described as valuation compression across the medtech sector. The company has about $1 billion remaining under a previously authorized repurchase program, although Wells said the amount ultimately deployed will depend on acquisition opportunities, timing and the valuation of Stryker shares. Stryker Corporation is a global medical technology company that designs, manufactures and markets a broad range of products and services for use in hospitals, surgeons' offices and other healthcare facilities. Its primary business activities span orthopedics (including joint replacement implants, trauma and extremities products), surgical equipment and operating room technologies (such as visualization, navigation and powered instruments), neurotechnology and spine solutions, and patient-handling and emergency medical equipment. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Stryker Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Image source: The Motley Fool. Thursday, July 30, 2026 at 4:30 p.m. ET Chair and Chief Executive Officer - Kevin A. Lobo Chief Financial Officer - Preston Wells Vice President of Investor Relations - Nick Mead Operator: Welcome to the Second Quarter 26 Stryker Earnings Call. My name is Megan, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Following the conference, we will conduct a question-and-answer session. This conference call is being recorded for replay purposes. Before we begin, I would like to remind you that the discussions during this conference call will include forward looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC, Also, the discussions will include certain non GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8-K filed with the SEC. I will now turn the call over to Mr. Kevin A. Lobo, Chair and Chief Executive Officer. You may proceed, sir. Kevin A. Lobo: Welcome to Stryker's second quarter earnings call. Joining me today are Preston Wells, Stryker's CFO and Nick Mead, Vice President of Investor Relations. For today's call, I will provide opening comments followed by Nick with market trends and some product updates. Preston will then provide additional details regarding our results and guidance. Before opening the call to Q&A. Our second quarter results demonstrated the strength of our broad product portfolio and resiliency of our teams. Our recovery from the cybersecurity incident continued as we ramped overall production to meet ongoing demand and support patient care. We delivered strong organic sales growth of 9% including high single digit growth from both our med surg and neurotechnology and orthopedics businesses. Geographically, our US organic sales growth of 9% included double digit organic growth from our medical, trauma extremities, and endoscopy businesses and high single digit organic growth in OrthoTech and instruments. This growth was offset by supply disruptions in our peripheral vascular business. While our sales force hiring and integration has made great progress, the supply disruption resulted in a meaningful backorder situation with lost sales in the quarter. We have addressed the issue and backorders should reach a manageable level by the end of Q3. We remain confident in the long term outlook for peripheral vascular including the AVS acquisition which closed in the quarter. Internationally, our 8.9% organic sales growth was driven by strong performances in Australia and New Zealand, Germany, Canada, South Korea, Japan, India, and Brazil. We continue to see long term growth opportunities in our international markets, through strong commercial execution, and the introduction of products that have demonstrated success in The United States in recent years. From an earnings perspective, we delivered adjusted EPS growth of 17.9% reflecting improved gross margins as well as our ongoing commitment to rigorous operational execution. We exited Q2 with regained momentum and expect a strong second half of the year driven by high demand for our capital products, continued production ramp and strong commercial execution. We are narrowing our full year guidance, and our businesses are well positioned to deliver another strong year of financial performance. Finally, our financial position and cash flow generation remains strong, providing firepower to deploy capital. Preston will elaborate on that in his section. I would like to acknowledge our teams for their efforts in putting us on track to deliver another strong year of organic sales and adjusted earnings growth. With that, I will now turn the call over to Nick. Nick Mead: Thanks, Kevin. My comments today will focus on the capital and procedural environment as well as several key product highlights. Capital delivery was a key driver of the growth in the quarter, as we recovered from the cybersecurity incident and demand remained strong. We exited the quarter with an elevated backlog, and expect continued strength in the hospital capital environment through the remainder of the year. The U. S. Procedural environment remains stable, While there has been some commentary on softness in surgical volumes, particularly in discretionary procedures, we have not observed meaningful changes in volume trends. Our portfolio is highly diversified. With the vast majority of our businesses supporting high acuity, medically necessary, and emergent care clinical demand remains strong. Importantly, the fundamental drivers of health care demand remain firmly in place. Including an aging population, the ongoing need for hospital workforce productivity, and the increasing occurrence of chronic disease. Together, these trends continue to support durable demand for our differentiated product portfolio. Now I would like to turn to some product highlights. We delivered our best ever Q2 for Mako installations. Both in The US and internationally. And utilization rates across our installed base continue to trend upward. This year, we celebrate 20 years of Mako. And its evolution into a multi specialty robotics platform with applications spanning hip, knee, spine, and shoulder procedures. Furthermore, we recently announced the full commercial launch of Mako RPS in the US. Expanding our robotics portfolio and offering surgeons additional options across a range of care settings. With more than 2.5 million procedures performed globally and systems installed across 47 countries, Mako remains well positioned. To drive continued growth through innovation, clinical evidence, and expanding adoption worldwide. We are rapidly moving to full commercial launches of triathlon gold, and our Triathlon Medial Stabilized Insert. Both of which are generating strong interest and positive customer feedback. During Q2, we also gained approval on the PROPHECY patient specific planning and guides, for our new Encompass total ankle replacement system. And we have just moved to full commercial launch. Additionally, recently received approval and have initiated a limited launch for our Pangaea Trauma Plating System in Europe. To be followed by a full commercial launch during Q4. Within instruments, we look forward to the upcoming launch of the Sonopet 3 Ultrasonic Aspirator. These products are part of the steady cadence of next generation and innovative products across our broad base of businesses that fuel our growth. Let me now turn the call over to Preston. Preston Wells: Thanks, Nick. Detailed financial information has been provided in today's press release. Today, I will focus my comments on our second quarter financial results and the related drivers. Organic sales growth was 9% for the quarter, against a double digit comparable in the second quarter of 25. Pricing was flat, and foreign currency had a 0.4% favorable impact on sales. This quarter had the same number of selling days compared to the prior year. Adjusted earnings per share of $3.69 was up $0.56 or 17.9% from the same quarter last year. Driven by our strong sales growth a continued focus on operational excellence and a net benefit in the quarter from tariff related costs. Foreign currency translation had a favorable impact of $0.1 Now I will provide some highlights around our quarterly segment performance. For the quarter, MedSurg and Neurotechnology delivered organic sales growth of 9.2%, which included 8.9% of U. S. Organic growth and 10.5% of international organic growth. Instruments US organic sales rose 8.4% against the prior year comparable of 16.3%. Growth this quarter included a robust double digit performance in our interventional spine pain portfolio, as well as a strong performance from our Surgical Technologies business. Which includes Neptune waste management smoke evacuation, and SurgiCount products. Endoscopy US organic sales grew 10.2% reflecting strong demand across multiple areas of the business. Operating room infrastructure and renovations were a key growth driver including a robust performance from the recently launched Oculon Light. We also delivered strong growth in our urology and connected OR products within the core endoscopy portfolio, as well as in sports medicine. Where double digit growth was driven by its expanded range of shoulder implant products. Medical U. S. Organic sales increased 13.1% and included very strong double digit performances from our Sage, and Emergency Care businesses. From a product perspective, growth was led by preoperative skin prep products, Howard Cots and LifeVac 35. Which continues to generate strong customer interest and capture additional market share. Capital demand also remains elevated as evidenced by an increased backlog and strong orders as we exited the quarter. Including ProCuity beds and our SmartCare business, which includes Vocera and care.ai. Vascular U. S. Organic sales declined 6.7% from a year earlier, due to the operational disruption in peripheral vascular that Kevin discussed in his remarks. Partially offset by solid growth in our hemorrhagic portfolio driven by the SURPASS Elite flow diverter. Internationally, MedSurg and Neurotechnology organic sales growth of 10.5% included broad strength across endoscopy, medical, and instruments. Geographically, growth was led by robust performance in Australia and New Zealand, Germany, Canada, Brazil and India. Orthopedics delivered organic sales growth of 8.6% in the quarter, which included 9.1% of U. S. Organic growth, and 7.5% of international organic growth. U. S. Knees organic sales grew 6.2% reflecting the continued adoption of Mako for robotic assisted knee procedures. And momentum from our cementless knee products. U. S. Hips organic sales rose 4.9% reflecting the ongoing success of our Insignia HipStem and the Mako Revive hip platform. With our latest application having the expanded ability to address more difficult primary hip cases and hip revisions. U. S. Trauma and extremities organic sales increased 12.5% with strong double digit sales growth in our Trauma and Upper Extremities businesses, Pangaea continues to be a key driver of our growth in our Trauma business. And our multiyear growth momentum in shoulders was driven by the continued strong performance of our differentiated portfolio, and the recent full commercial launch of Mako shoulder on Mako 4.0. US Orthotech organic sales grew 9.2% driven by robust Mako installations. Internationally, Orthopaedics organic sales growth of 7.5% included strength in knees, OrthoTech and Trauma and Extremities. and was led regionally by Canada, South Korea, Australia and New Zealand, Brazil and India. Similar to the first quarter, the conflict in Iran had a modest impact on overall company growth. Now I will focus on certain operating and non operating items in the quarter. Our adjusted gross margin of 66% was 60 basis points favorable to the second quarter of 25. Reflecting the impact of the net tariff benefit I previously mentioned as well as improvements in business mix and cost discipline. Our adjusted operating margin was 27.4% of sales, which was 170 basis points favorable to the second quarter of 25. Driven by the gross margin improvement as well as lower adjusted SG&A as a percentage of sales due to our ongoing focus on spend discipline and margin expansion. Adjusted other income and expense of $101 million was $5 million lower than in 2025. We continue to expect our full-year 2026 adjusted other income and expense to be approximately $420 million The second quarter had an adjusted effective tax rate of 16.5%, reflecting the impact of geographic mix, and certain discrete tax items. For 2026, we continue to expect our full year effective tax rate to be in the range of 15% to 16%. Turning to cash. Ended the second quarter with approximately $3.5 billion of cash and marketable securities, and year to date cash from operations of $1.8 billion supported by a strong balance sheet and robust cash flows, we remain focused on M and A opportunities to drive top line growth as our primary capital allocation priority. Additionally, considering our elevated level of cash flow generation, and recent valuation compression across the medtech sector, we plan to resume share repurchases this quarter. And now I will discuss our full-year 2026 guidance. Considering our year to date results, our presence in attractive end markets largely supporting acute and emergent procedures and durable demand for our capital products, we are narrowing our full year guidance and now expect organic net sales growth to be in the range of 8.3% to 9.3% and adjusted net earnings per share to be in the range of $14.95 to $15.10 Our full year sales guidance reflects a modestly positive pricing impact Additionally, should rates hold near current levels, we anticipate a slightly favorable impact to both sales and earnings per share. With that, I will now open up the call for Q&A. Operator: At this time, we will open the floor for questions. You may remove yourself at any time by pressing star 5 again. We would like to remind callers to please limit themselves to 1 question and 1 follow-up question so we can accommodate as many participants as possible. Our first question will come from Joanne with Citibank. Your line is open. Please go ahead. Joanne Wuensch: Good afternoon, and thank you so much for taking the question. I actually have a lot. I am curious for guidance, the updated guidance, what your thought process was in narrowing it, particularly lowering the top end of the range. Which leads me to my second question of how you are thinking about revenue growth in the back half of the year. And then I am just going to go real straight into this. EPS you had a really nice beat in the quarter versus what we were looking for. But it does not look like it is flowing through for the full year guidance, and I am curious why. Thank you. Preston Wells: Hi, Joanne. I will take the first part of your question and then the EPS question, then we will have Kevin jump in on how we are thinking about sales from a remainder of the year perspective. So from top line guidance standpoint, really, we have half the year done, Obviously, we are coming out of the cyber event that impacted Q1. We have seen the momentum and the recovery starting to come back in Q2. And we have a good ways to go in the second half in terms of continuing that momentum to deliver on the guidance range. And quite frankly, when we look at what is left to do with the rest of the year and where we are with our products and with the markets right now, we felt like it was a prudent range to be in the $8.3% to 9.3%. Just looking at it in totality. Kevin A. Lobo: And so Kevin can talk a little bit about the revenue piece. A little bit in just a second. Let me just address your EPS question. So from an EPS standpoint, when we look at the beat in the quarter, it is driven partially by the tariff refunds that are happening that happened in the quarter. But as a reminder, when we talked about the first quarter earnings, and those were obviously well below ex expectations driven by the cyber event. There are costs that are coming through from a cyber perspective, both with loss absorption from manufacturing as well as R&D or our IT costs that we have that we that we are planning for as we come through the remediation that will offset that benefit. So when you look at it on a half year basis, it actually you can see those offsets are already happening. Preston Wells: Yeah. And related to your question about lowering the top end, Joanne, Preston's point, half the year is already done. Kevin A. Lobo: As we look at the production that we have to just the building of all of the capital equipment that is required. We have the orders. To really drive very high growth. it is just how fast can we actually make everything to deliver. I would say our ability to beat the top end would be hinging on 2 factors. 1 is the market would have to be strong in procedures. We expect it to be consistent. If it improves a little bit, that obviously gives us a tailwind. And then if we can ramp our products and including some of the new products that we are launching, ahead of what we are projecting right now, then that could cause us to actually raise on the top end. But right now, this is the best visibility that we have. With what we know now. Obviously, at the end of Q3, we will update our guidance and if things improve on a faster trajectory, then we could look to maybe move it up. But at this point, this is the best visibility that we have. And, honestly, on a $25 billion business, if you are growing at around the 9% range, it is still a pretty good year given that we were knocked out for almost an entire month. Thank you. Operator: Your next question will come from Robbie Marcus with JPMorgan. Your line is open. Please go ahead. Robert Justin Marcus: 2 for me. 1, Kevin, you know, 1 of the things or Preston, whoever wants to take it, 1 of the things we are all trying to figure out is what is underlying and what is catch up from first quarter I know you had talked to some of the capital being more second half weighted. The quarter was in line with expectations with some puts and takes, vascular being 1 of them. Hips being another, medical being on the plus side, How should we think about what is underlying and normal trend versus where you saw the recapture from first quarter? And if you are able to quantify anything, that would be helpful. And then I have a follow-up after. Thanks. Preston Wells: Yeah. So thanks, David. As we talked about really in the first the first quarter call, remember, we talked about the variability of the different businesses that we have. So it is hard to really pin down. Okay. This is specifically underlying versus catch up. I mean, there are some areas that was a little bit easier where there is just some catch up revenue to bulk. I would say for the most part, what we are seeing is we are seeing continued momentum across all of our businesses. We see really strong demand for our capital products. I think that is the 1 where we will see a more significant uptick in the second half of the year based on what Kevin talked about earlier with production ramping. Really getting ourselves back online to be able to produce at a faster rate to support the volumes that we have. So, really, I would say what you see really in the second quarter is primarily just the momentum of the underlying business primarily with a few other elements that are kind of maybe coming into play here and there throughout that business. Kevin A. Lobo: And the only thing I would add, Robbie, is we always have variability in our quarters given the range of businesses that we have. Would tell you peripheral vascular was certainly not something we were expecting. That supply disruption was acute, and we took the pain. But overall, we hit the number that we were aiming for. In the quarter, because we had some out performances in endoscopy and medical and even within medical, our bed business we have tremendous number of orders that we have a big job to catch up to deliver. So that actually was not a very strong performer in spite of medical's overall terrific growth. And it is not because we do not have the demand. it is just because making beds takes time. And we were out of production for a long period of time. So that is 1 particular product that we have a lot of catch up to do But there is a lot of noise underneath these numbers, but overall, business performed very well. The demand is still strong. And you are going to see a little bit of volatility across our businesses probably in Q3, Q4, but we feel good about the overall health of our businesses. And they are going to recover at kind of different points of time. And even the procedures, right, Rescheduling procedures was very, very hard. You know, no 1's ever gone through at least this kind of an event that we went through. And so it has created a little bit of inconsistency. across our businesses. But overall, for the full year, we are feeling really good. About our business. Robert Justin Marcus: Great. And 1 quick follow-up. Kevin, 1 of the things everybody's been concerned about, and you kinda touched on this, but I would love a little more color. Just the backdrop of slowing or stable procedure volumes. We have had a lot of mix data points. And the current and future state of the CapEx environment. Would love to get your thoughts on both of those. Thanks. Kevin A. Lobo: Yeah. Well, I think we have sort of talked about them in Nick's remarks. Look. We see the procedure environment as healthy in the businesses where we operate. We see the demand for procedures is strong. it is healthy. it is stable. it is whatever adjective you want to use. We do not see issues with the procedures that we play in. And capital, I would say, is very strong. If I look at our backlog, we have an elevated backlog We had a record month of Mako sales. We are just not seeing any issues related to capital equipment. We did see, and we have commented on this even in the last quarter, a slight slowdown in Europe related to procedures, but certainly not in the United States and not in the other markets around. Operator: Our next question will come from Larry Biegelsen with Wells Fargo. Your line is open. Please go ahead. Larry Biegelsen: Good afternoon. Thanks for taking the question. Kevin, just a follow-up on the revenue guidance. The organic growth needs to be about 11%, I think, in the second half. To reach the midpoint of the guidance. So is there any more color you can provide on what is driving your confidence to be able to recapture the lost sales to achieve that and, of course, offset the vascular supply issue you had. And just remind us of why you expect more catch up in the second half in the second quarter. I think that is just been a lingering question investors have had. Kevin A. Lobo: Listen. We lowered the bottom end of our range. That should give you some idea. We are not going to lower the bottom end of our sorry, We raise the bottom end of our sales guidance from 8% to 8.3%. Right? So if you are raising that, that means you really do not see a risk of us being able to deliver at the lower end. And that raising is based on just tremendous orders for our capital and that is just execution. All we have to do is make the products, and ship the products, and we can see the production ramp now that our plants have been operating pretty consistently since April 1. And so that visibility is very clear on the capital side. Even on the procedure side, so the small capital, we do have orders for small capital. We have pretty good visibility into those orders. And surgery schedules, and our business is feeling really healthy. So that 11%, we feel very, very confident. Delivering. Other otherwise, we would not have raised the lower end of our sales guidance. Larry Biegelsen: Any color just on how to think about the catch up in Q3 versus Q4? Thanks for taking the questions. Preston Wells: No. I think, again, like we said before, we are going to see that happening at different paces and different times. And part of it is, as Kevin said, the ramping up of production for those capital products that we can get those out the door. So I think you are going to see kind of a steady cadence across both quarters as we go forward. Operator: Your next question will come from Ryan Zimmerman with BTIG. Your line is open. Please go ahead. Ryan Benjamin Zimmerman: Thank you. Thanks for taking the questions. Preston, just you have talked enough about the top line, I think, with the questions. But can you spend a little bit on margins and the EPS guide for the second half of the year? If I look at kind of how the Street is thinking about Q3 to Q4, what is it that is going to drive maybe lower EPS in fourth quarter, which is kind of what the Street is assuming to get to the guidance. Is there additional expenses that are needed Is there a margin impact when you think about kind of the excess production that you are going to do that we need to consider, just help us think through the cadence there on the margin and P&L for the EPS guide. Thank you. Preston Wells: Sure. So first of all, we are still committed to what we talked about last year, which is our 150 basis points over the course of 3 years. So that is still our commitment. I think we have demonstrated the ability over the last couple of years to drive op margin. We are gonna continue to do that So teams are fast at work on continuing to find ways to get better from an efficiency and productivity standpoint. So that is the underlying kind of focus of the organization. We do have this year several moving you know, larger moving parts. So, obviously, with the cyber events, we have manufacturing shut down for some period of time, and so you have lost absorption and idle costs that are sitting there that we have to recover from. We also have a lot of work ahead of us in terms of the remediation and stabilization from cybersecurity perspective. So there is money that is going to be spent throughout the year to Support those 2 activities that are really related to the cyber event itself. In addition, we know that there are some pressures on some different areas around oil, and other raw materials that we are managing in this overall environment as well. that is offset by what I talked about before in the tariff refund piece of it. So we have a lot of moving parts with a lot of different items that are happening from a macro perspective that we are managing. So I think it is those elements that are still kind of what is left us with a little bit wider of a guide On the EPS side. But at the same time, we feel really good about being able to fall in that range. And certainly, as Kevin mentioned before, you know, as sales are delivering, the more we can do and deliver on the top line. That will we expect that to fall through EPS as well as we go. So it is really just managing those big macro items throughout the rest of the year is what we are going to be wrestling with. Ryan Benjamin Zimmerman: Okay. Very helpful. And then, Kevin, 1 for you. You know, we have seen physician reimbursement on large joint replacement come down over the last 10, 15 years. Pretty steadily. But this year, Medicare took a pretty big swing as much as 20-plus percent on knees, hips, shoulders, etcetera. I am just wondering if you have any thoughts on what the orthopedic industry is doing to maybe push back on this or whether you think this has any impact in future years on knee and hip replacement on the on the physician side? Kevin A. Lobo: Yeah. Listen. We the proposed rules are always, it is a sticker shock, but this has been going on ever since I have been at Stryker. For 15 years. See the proposed rules come out. They create noise, and then the normal course of everybody voicing their opinions and ends up getting to a reasonable place. And I do not assume that it will be any different this time. What you are seeing, of course, is, you know, there are shifting of site of care. Within orthopedic procedures. That is going to continue, but I question. And, frankly, for Stryker, that is a good thing. Because we like the ASC as a place where we can win not just in hips and knees, but across our entire portfolio And so that trend, I think, will continue. Related to reimbursement pressures. But the demand for joint replacement procedures is unabated Every day, 12 thousand people are turning 65. there is more and more people being active. So I do not see that changing, that dynamic changing, and I think the physicians will do fine. They are needed. And their voice will be heard. Operator: Your next question will come from Travis Steed with Bank of America. Your line is open. Please go ahead. Travis Lee Steed: Hey, thanks for the question. I wanted to push a little bit more on the U.S. Ortho numbers especially the U.S. hip number. Hard for us to see the underlying growth there. But I know it was a little lighter than I think some expected. So I do not know if anything on share shifts to the market and U.S. hips and knees that took some of the upside away this quarter? Preston Wells: Travis, in terms of U.S. hips, nothing that we would point to in terms of major share shifts or changes there. I think the 1 thing I would point out is, again, the delivery of the number this year was against a pretty large prior year comparable. So we had 8% growth last year in that space. So just it is really just a comparable. I think as we look at any of our numbers orthopedics, we always say, you know, 1 quarter does not make a trend. And so I think that is true here. So nothing major has changed in terms of anything that we have seen in from an underlying market conditions standpoint. Travis Lee Steed: Okay. And maybe a little more color on the Inari supply disruption. What exactly happened? Is it just the Inari business or other parts of vascular certain products? Does that is there a catch up in Q3 assumed in the guide? Or is there some lingering impact? I know you said manageable by the end of Q3. Curious how it works out on the numbers for Q3. Kevin A. Lobo: Yeah. The supply disruption, I am not going to get into the details of what it was, but let's just say it did cause a significant backorder specific to 1 plant in the Inari business. Which frankly makes virtually most of the products other than third-party products. A factor for us. So had an issue with that plant. That created the back order. The back order is pretty elevated right now. And we it will work down to a manageable level by the end of the quarter. We still look we do expect the business to grow in Q3 and to grow in Q4, but it is going to take a little time for that to build. So because of the backorder situation. So we finally got the Salesforce stabilized. We are feeling really good about things, and then we had this hiccup. And then, unfortunately, when we do acquisitions, we have felt this pain before with some of our other deals in the past, and obviously moving into our Stryker Salesforce and now into our Stryker manufacturing systems that we have experienced this. We did this with Sage. it is happened to us with Mako. it is happened to us We do not obviously enjoy it, but we do love the market. And we do love the products that they have, the pipeline that they have, and we will be back and it will just take us a little bit of time to dig out from under this backorder situation. Operator: Your next question will come from Vik Chopra with BMO Capital Markets. Your line is open. Please go ahead. Analyst: Kevin, you characterized the second half outlook as strong. I am just curious what key assumptions are embedded in the back half regarding volume growth, capital conversion and backlog realization? And then I had a quick follow-up, please. Preston Wells: Hey, Vijay. I will take that 1. In terms of the back half of the year, you know, we are not gonna give all the specifics in terms of what we are expecting across each 1 of those elements that you laid out. But what I can tell you is when we exited this quarter, the momentum that we see really on across the business. So even just from a procedural standpoint, as well as the capital the capital business And the way we look at the capital business, in particular, is looking at the order book, looking at how that is. I have mentioned even some of the products that are driving it. For medical, but we see that really across all of our capital businesses. And so it is really our ability to capitalize on that through the production ramp that Kevin's talking about. Is what gives us a lot of confidence in being able to deliver on the capital side. And the same thing on the procedural side, which really just continuing to run the offense behind Mako on the joint replacement side. And, obviously, with RPS hitting full launch as well, I think those are the things that we really believe in that are gonna help drive both sides of those businesses. Analyst: Great. And then just for my follow-up, you know, if you could just talk about the early feedback on Mako RPS. And how we should think about the ramp and impact in 2026. Thank you. Kevin A. Lobo: Yeah. Listen. We were in limited launch for the second quarter, and the feedback has been really outstanding. it is really easy to use. The surgeons really enjoy the experience. The haptics surprises them. Frankly, how you can do that in a handheld robot. So we are getting really great feedback, and now we are gonna move on to the full launch. There are there is a subset of surgeons that are not ready to move all the way to Mako. Who are only pinched in doing total knees, especially in the ASC. That this is gonna be a beautiful fit for. We have already had some conversions, but it is been small for now. But we are planning to really ramp this up and excited about this. Operator: Your next question will come from Matthew O'Brien with Piper Sandler. Your line is open. Please go ahead. Matthew Oliver O'Brien: Afternoon. Thanks for taking the question. Kevin or Preston, I hate to keep harping on this, this back half because I think everybody is really nervous now about your ability to hit the back half numbers. But you keep talking about this production ramp. Our facilities being able to meet this sizable ramp in the back half. Young know, I am no manufacturing expert. By any means, but are there any factors that potentially could impact your ability to make enough product? It seems like primarily in med surg. To be able to deliver a significant ramp in Q3 and Q4. It seems like it is a little bit more even in Q3 than we are accustomed to. Be able to get to the full year guidance because I think that is what everybody's really worried about. Kevin A. Lobo: Yeah. Listen. We are we are not worried. I mean, the guidance that we are giving is based on what we know We know how many shifts to run. We these are products that we they are not new products we are making. These are products that we know how to make. And that we have made in the past. So based on adding shifts and being able to plan for this, we feel really comfortable with the guide that we are giving to you. Obviously, we are gonna try to make even more if we can, but we are we are we are setting the guidance in a place we feel very comfortable being able to deliver. The orders are already there. So demand is not the problem. As it relates to capital equipment. it is really just being able to fulfill those demands and could we have an issue here or there? it is always possible. We think we have accounted for that. In the guidance that we have provided. Young know, we have a habit of hitting the numbers that we provide to you and potentially beating the numbers that we provide to you, and this is no different. When we give this guide, it is we give this guide with great confidence in our team's ability to deliver that. These are businesses we know. These are products that we know. Our plants are fully operational. After the cyber event. And so we have added shifts here and there. Those shifts are not performing well. And based on that, we have we have laid out our guidance for the year. Matthew Oliver O'Brien: Got it. And then just a follow-up on the peripheral vascular. I know you have the sales force in place, and then you have this hopefully short term supply issue. that is space, though, I mean, those procedures, they cannot be delayed. So just want to hear a little bit more about your confidence in and reenergizing and reaccelerating growth in that franchise. Getting through the supply issue? Do you think it is something where you could lose some share durably, or is it something where you can recover based on your early experience with that business? Thanks. Kevin A. Lobo: Yeah. Young are right. We did lose sales. I think I said that in my opening comments that we those are procedures you do not it is not like capital equipment. That you so we did lose business because those cases are emergent. We did prioritize our products. We had allocation process. As you can imagine. So we kept our highest volume, most loyal customers we kept them happy. And then the customers that ordered sort of smaller amounts, and we let of that business go because we had to. But we have a fully ramped up Salesforce, and that is something that we had not had in the past year. We have gone through a lot of turmoil with the signing of non competes and a lot of Salesforce turnover. We now have a very stable and hungry Salesforce, and they are going back on offense. And as this back order starts to come down, which had already, you know, starting to, I think we are gonna be in great position to recapture some of that business from those other accounts and actually fortify ourselves. So we are feeling pretty good about our ability to recover. We have great products in this business. We have a great brand. In this business, and, and we will be back. Operator: Your next question will come from Vijay Kumar with Evercore ISI. Your line is open. Please go ahead. Vijay Muniyappa Kumar: Hi, thanks for taking my question. I guess 1 on, you get asked on capital deployment and M&A historically. But curious given where the stock is, Kevin, and you guys just put up great numbers. Is there a bias towards share repo? I know you mentioned on the call. Maybe talk about the opportunity that you see you know, and what is the size that we could, think of from a share repo perspective? Thanks. Preston Wells: Thanks, Vijay. The as we look to think about our capital deployment, strategy, I mean, really, nothing major has changed. I mean, the m and a continues to be our number 1 priority, and our plan is to continue to find those opportunities that are gonna drive future growth. So that is first and foremost. What we have seen, though, as we continue to grow and scale, and continue to focus on delivering more efficient cash flows, it has given us the ability to try to return shareholder value in a few different ways. And so as a result, that is why we are talking now about potentially going back and doing share buybacks. And so we are looking at doing some more some of that in the second half of this year really focused on trying to just continue to use cash in a really efficient way. In terms of size and of what that could look like, we do have already approved from a prior approval by the board about a billion dollars available for us. I am not saying that is what we are going to do, but that is what we have available. And it is something that we are gonna take a look at. it is going to be really on deal flow and timing of that deal flow from an m and a standpoint. As well as what the current valuation is of our share. So those are going to be some of the elements to determine when we go out and do something and how much we do. But really, it does not mean that our focus and our number 1 priority is not changing from m and a, but we will also supplement it with some share buybacks this year. Vijay Muniyappa Kumar: that is helpful. And, Kevin, maybe 1 on backlog and orders. Any elongation of backlog or cancellations just given some of these concerns from cautious comments from hospitals. If you could comment on backlog and order book, that will be helpful. Kevin A. Lobo: Yeah. Look. As we mentioned earlier, we have an elevated backlog. As we exit the quarter. We have seen zero cancellations in our books, and our teams know how to deal with slight delays when we have issues with manufacturing, and our customers order a lot quite a bit in advance, or we are able to meter that. But thus far, we have not seen really any cancellations. And feel really good about the capital business. And getting back to your first question on cash flow, because you, Vijay, were 1 that used to challenge us a lot, if I remember 10 years ago, in cash flow. If you look at the amount of cash flow we generate now versus 6 years ago when we stopped doing share buybacks. We can now start to do some level of buybacks and still have huge amount of firepower to do acquisitions. So we still have a very, very robust pipeline of deals We are very disciplined, so we will pass if the price is not right. On deals. But we are going to execute m and a. No question about it. But given the sheer size of our cash flow, we can also start to do opportunistic share buybacks. And given where the price of stock is, we are going to start to do that. Operator: Your next question will come from Patrick Wood with UBS. Your line is open. Please go ahead. Patrick Wood: Amazing. Thank you so much. I will just ask the 2 upfront if I can. First 1, it is an area that does not get a lot of questions, but curious about SmartCare and the Smart Hospital that you guys pushed out. Vocera is obviously growing very strongly in the background. How the feedback to that has been and vision for that. So that is 1. And then the second is, obviously, business is very strong. I know that it is a slow tanker moving into the ASC that is been happening for very long time and over years. But have you seen any pickup of that in late? It just looks some of the data that we see that ASC volume shift seems to have picked up this year a little bit more. Curious if you are seeing that. Thanks. Kevin A. Lobo: Yeah. First, on SmartCare, super excited about the creation of the business unit. it is a new business unit that is started beginning of this year. The tech stack has been modernized, which took us a little bit of time. Everything's cloud-based. care.ai was already modern. Vocera, we had to kind of upgrade the tech stack. The orders were very strong in SmartCare. So we are expecting a really big second half of sales growth so big because the orders have really, really picked up since we have created the business unit, integrated the tech stack, we are getting great feedback from our hospital customers, and I am expecting a very strong second half of the year and future related to SmartCare. So bullish on SmartCare. On the ASC trend, it is more of the same, honestly. it is just that the limiting factor right now is construction of ASCs. And that just takes time. But every single hospital system you talk to are looking at doing that. You look at our hip and knee business, it is now in the high-teens percent. Pushing 20 percent of the procedures now being done in ASCs. And if you remember before COVID, it was 5%. So that is a pretty significant ramp, but it is steady. it is it is not gonna sort of inflect. I think it will just continue to be kind of on the current trajectory just based on construction. Of ASCs and or re rebuilding and renovations. Those just those things just take time. And we get to be on the front end of those with our communications business with booms and lights and we actually help customers design ASCs with our with our architects that are part communications business in Dallas. So we have pretty good line of sight into the trend on ASCs. I think just steady growth And now you are starting to hear even in Europe and other countries, they are starting to have an interest, and I think that trend will actually start to pick up around the world as well. it is very early there, though. Operator: Your next question will come from Richard Newitter with Truist. Your line is open. Please go ahead. Analyst: Hi. This is actually David here for Richard. Thanks for taking the question. I want to kind of pivot to IVL in Amplitude, the PV and Inari market? Could you talk about, I guess, timing of some of the clinical trials there and when you expect to come to market? And then just overall, what the market growth that you see kind of from a procedure perspective, I think, a couple of quarters ago, you said mid to high teens. Is that still the case? And then just finally, 1 of the things that we have heard about IVL, is that it brings pull through to other kind of coronary products. So given that hypothesis, how do we think about, you know, your desire to kind of build out that portfolio even more or even quicker than maybe FDA approval? Thanks. Kevin A. Lobo: Yeah. Okay. Well, thanks. there is a lot in that question. So look, we are excited about the AVS acquisition. The first product, the IVL, the first indication is going to be above the knee. And that will drop right into our peripheral vascular Salesforce. The feedback from our customers has been really positive. They love the method of action, the way the product performs. At least from what they have heard and what they have seen, the ones participating in the clinical trial. So we are we have submitted. We do not know when it will be approved, but there is a chance that we will start to be selling that product before the end of this year. We will keep you posted as we hear from the FDA on that. And we have commenced a trial on coronary indication. That trial will take a little while, so we will keep you posted on that, but it is certainly not something you can think about in the next 6 months to a year. it is gonna take longer than that. And then as you know, we never just do 1 thing. When we buy something, as we have done with Enari, we follow on with ADS, and we are gonna we will continue to look for other technologies to broaden the call point and the products that serve those call that is the Stryker offense. We have done that. Young have seen us do that. Repeatedly with neurovascular. We started with the Boston Scientific business, and then we quickly followed up with SURPASS and cons Concentric and so that is our offense. So we will continue to do that, but these products kind of stand on their own. They are they are very it is a it is a very compelling treatment area, huge demand, We will start to size the demand and the opportunity as those products come to market rather than spend time today. But we are very excited about the technology Feedback from surgeons has been incredible. And I am looking forward to getting those on the market. Operator: Your next question will come from Matthew Charles Taylor with Jefferies. Your line is open. Please go ahead. Matthew Charles Taylor: Hi. Thanks for taking the question. Guess I was hoping you could discuss the results in Q2 and the recovery going forward in terms of the 3 buckets that you had talked about before with revenue recognition, some catch up in procedures, and then the capital that you have been talking about a lot on this call. So could you be specific at all in Q2 in terms of how much rev rec or procedural recovery helped? And then, you know, which of those buckets, presumably the last 2, are gonna contribute the most in the second half? Preston Wells: Yeah. So as I mentioned before, really, the rev rec piece we would have seen, we did not we did not quantify that specifically certainly, that would have been a little a small piece of what happened in Q2. You are right. The last 2 buckets are the largest, particularly around the capital side of things. And so that, you will really see, as we talked about before, ramping in Q3 and q '4. So I would say we expected to see that. We have not quantified any of those pieces. Again, because across all our various businesses, it is a little bit different how they are all interacting. But the way to probably to think about it is the rev rec piece is done. And you really start to see the capital components of that and the rescheduling of procedures More so in Q3, Q4. Matthew Charles Taylor: Okay. Great. Thank you very much. Operator: Your next question will come from Matthew Blackman with TD Cowen. Your line is open. Please go ahead. Analyst: Good afternoon, everybody. Thank you for taking my questions. I have got 2. Both are Inari-related. I will just throw them out upfront. Maybe just to start quickly, Preston, just hoping for a little bit more color on Inari supply shortfall? How much of an organic drag was it? Our math says could have been 50 to 75 basis points. Is that sort of roughly the right ballpark as we think about the impact in the second quarter? And then, Kevin, I was hoping you could give us a bigger picture state of the union on mechanical thrombectomy market, maybe in 2 parts? What does the market look like today? it is harder for us to get a feel for the underlying market trajectory, and there are a few crosscurrents. You have a supply headwind to work through, your biggest competitor is in the throes of an integration. There are emerging players coming. But there is also a bevy of supportive data out there and still coming. So the real question is, how do you think about a sustainable market growth rate over the next couple of years? And could that growth step higher over time? And then the quick follow-up there is, how do you position mechanical thrombectomy and IVL when you have it later this year perhaps at the peripheral vascular call point? Is there an opportunity to cross sell? And are we underappreciating that aspect of these assets? Thank you, and sorry for throwing that all out there at once. Preston Wells: Yeah. That was a lot. I will let Preston start, and then I will finish. Yeah. I will take I will take the easy 1. You are in the ballpark. On the impact. The financial impact you stated was you are in the ballpark. Kevin A. Lobo: Look. As it relates to the market, this is a market that has huge potential to grow. it is kind of like if you think about neurovascular, the Mr. Clean study that happened, kind of created a big step up in the overall market demand. The equivalent of that is a PEERLESS II study that we just finished enrolling 1.2 thousand patients. We just finished enrolling. It takes roughly a year to do the data readouts on all the processing and everything. So that will come out sometime mid-next year. mid next year. And I think that will lift the entire market because this is really a high powered very, very important clinical trial, the most important. Mean, there are we have some other trials going on, but this is by far I would call it, the seminal trial within peripheral vascular that will really hopefully blow the market open. There are some new competitors. They tend to be more in just the aspiration portion of the market. As you know, it already has a full suite of products which includes a clot retriever, as well as the flow retriever and so it is particularly a full product portfolio. But I would say that is gonna be the biggest catalyst for the market to grow. And we are looking forward to that, that data readout. and that being published in the middle of next year. But, meanwhile, the market's still a good market even today. Our problems are internal to us. We will get those problems resolved. We will get back to the double digit growth, as we rectify our supply chain challenges. Analyst: Great. Thank you. Operator: Your next question will come from Caitlin Roberts with Canaccord Genuity. Your line is open. Please go ahead. Analyst: Hi. Thanks for taking the questions. Maybe just 2 for me. On the innovation front, you called out some recent product launches earlier in the call. Just wondering if the manufacturing disruption is impacting the timing or pace of any of the recent or upcoming launches. And just some more color on RPS. what is the site mix been between ASCs versus hospitals? And has the convert been more existing Mako surgeons adding to their capabilities with RPS, or have you been converting new to Stryker surgeons? Kevin A. Lobo: Yeah. Listen. it is really it is really early in the RPS days is what I would tell you. And we have done both hospital as well as ASCs. But it is been very early. We focused actually more on competitive users than we have existing Stryker users. that is been very intentional. And so that we are gonna continue to push probably much more on the competitive front in the early days and then eventually obviously, reach out to the Stryker surgeon. that is typically what we do. As it relates to ramping new products, I would tell you that probably Triathlon Gold is the 1 that is just a little bit slower out of the gates than we would like. Just because we lost production for a few weeks. But the demand for triathlon gold is very good, and we are ramping the production. But that is probably the 1 Of course, if you close your plants for a few weeks, weeks, sorry, that is gonna delay, you know, your ability to get the sets out as-- and instruments and everything out as fast as you would like. But nothing in a material way. So we are we are really excited. If I think about something like total ankle, with prophecy, we did not have the prophecy planning and guides approved. So we were all kind of on only a limited launch anyway. And so that production really was not hurt as much. So it kind of varies by product. But now that we have all our plants humming, we do have a lot of new products coming scaling in the second half and in the case of Sonopet launching. In the second half. And that is gonna be an extra catalyst to help propel our growth. Operator: There are no further questions. I will turn the call over to Kevin A. Lobo for closing remarks. Kevin A. Lobo: Well, thank you all for joining our call. As you can see, we have definitely fought back from the cyber event, delivered an overall growth that was in line with what we planned. And we have narrowed our guidance where we feel like we can deliver a very strong year for Stryker, and we look forward to sharing our Q3 results with you in October. Thank you. Before you buy stock in Stryker, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Stryker wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* Now, it’s worth noting Stock Advisor’s total average return is 889% — a market-crushing outperformance compared to 203% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of July 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Stryker (SYK) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Stryker Corporation SYK reported second-quarter 2026 adjusted earnings of $3.69 per share, up 17.9% year over year. The figure beat the Zacks Consensus Estimate of $3.46 by 6.6%. GAAP EPS was $3.30, up 44.1% from the year-ago quarter’s level. Revenues rose 9.4% to $6.59 billion and topped the consensus mark of $6.56 billion by 0.5%. Organic sales advanced 9%, supported by stronger capital deliveries, recovering production and broad demand across the portfolio. Despite better-than-expected sales and EPS, Stryker tightened its sales and EPS guidance, likely leading to a decline of 7.8% in share price during after-hours trading yesterday. Year to date, the company’s shares have lost 1% compared with the industry’s decline of 16.1%. The S&P 500 Index has increased 6.7% in the same time frame. Image Source: Zacks Investment Research The quarter marked a sharp recovery from the cybersecurity disruption that constrained production in the first quarter. Management said plants had returned to consistent operation, allowing Stryker to rebuild output and fulfill more capital orders. U.S. sales increased 8.9% to $4.96 billion, while international sales climbed 11.0% to $1.63 billion. International growth was led by Australia, New Zealand, Germany, Canada, South Korea, Japan, India and Brazil. MedSurg and Neurotechnology sales increased 9.7% to $3.63 billion, with organic growth of 9.2%. Medical was the strongest major business, rising 13.4% to $1.12 billion, aided by demand for preoperative skin-preparation products, powered cots, LIFEPAK 35, ProCuity beds and Smart Care offerings. Endoscopy sales advanced 11.7% to $1 billion, while Instruments rose 9.3% to $1 billion. Vascular sales declined 0.7% to $496 million because of a supply disruption at an Inari manufacturing site, which created back orders and lost sales. Management expects Vascular back orders to fall to a manageable level by the end of the third quarter. A stabilized sales force and improving product availability are expected to support a return to growth during the second half. Orthopaedics sales grew 9.1% to $2.96 billion, with organic growth of 8.7%. Trauma and Extremities led the segment with an 11.9% increase to $1.07 billion, reflecting strength in trauma and upper-extremity products. Ortho Tech sales rose 10.3% to $717 million on robust Mako installations. Knees increased 8.4% to $693 million, while Hips improved 2.9% to $479 million. Management also highlighted record second-quarter Mako installations and rising utilization across the installed base. The company moved Mako RPS into full commercial launch in the United States. Other product catalysts include Triathlon Gold, the Incompass Total Ankle Replacement System and the planned launch of the SONOPET 3 Ultrasonic Aspirator. Adjusted gross profit totaled $4.35 billion in the second quarter, up 10.6% from the year-ago quarter’s level. Adjusted gross margin expanded 60 basis points to 66.0%, aided by favorable tariff effects, business mix and cost discipline. Research, development and engineering expenses increased 6.6% year over year to $434 million. Selling, general and administrative expenses rose 7.2% to $2.23 billion. Total operating expenses were $2.84 billion, up 4.1% from the prior-year quarter’s level. Adjusted operating income increased 17.0% to $1.81 billion. Adjusted operating margin improved 170 basis points to 27.4%, reflecting gross margin gains and lower adjusted selling, general and administrative expenses as a percentage of sales. The margin performance was notable, given continuing cybersecurity remediation expenses, lost manufacturing absorption and raw-material pressures. Management remains committed to its multiyear operating-margin expansion plan. Stryker exited the second quarter with cash and cash equivalents of $3.39 billion compared with $2.88 billion at the end of the first quarter of 2026. Cumulative net cash provided by operating activities totaled $1.84 billion compared with $1.36 billion a year ago. Management continues to prioritize acquisitions but plans to resume share repurchases in the third quarter. Stryker has about $1 billion remaining under an existing board authorization, with the timing and scale dependent on deal flow and valuation. Capital demand remained healthy, with an elevated backlog and no order cancellations reported at quarter-end. Strong orders across Mako, beds and Smart Care provide visibility into second-half deliveries. Stryker now expects full-year organic sales growth of 8.3-9.3% compared with its earlier guidance of 8.0-9.5%. Adjusted earnings are projected between $14.95 and $15.10 per share versus the prior projection of $14.90 to $15.10. The outlook assumes a modestly positive pricing contribution and slightly favorable foreign-currency effects if rates remain near current levels. Management expects the second half to benefit from capital backlog conversion, production ramp-up, procedure rescheduling and new product launches. Stryker Corporation price-consensus-eps-surprise-chart | Stryker Corporation Quote Stryker delivered a strong second quarter, with both earnings and sales beating their respective Zacks Consensus Estimate. The quarterly outperformance reflects a solid recovery from the first-quarter cybersecurity disruption. Broad-based strength across MedSurg, Neurotechnology and Orthopaedics, coupled with improving production and healthy hospital capital spending, drove the performance. Management tightened its full-year organic growth outlook, signaling confidence in continued operational recovery, which may get partially offset by a temporary supply disruption within the Inari peripheral vascular business. Stryker expects this momentum to strengthen through the second half of 2026, supported by an elevated capital equipment backlog, record Mako installations, expanding robotic surgery adoption and a steady cadence of new product launches, including Mako RPS, Triathlon Gold and Pangea. Strategic acquisitions remain a key growth pillar. The integration of Inari expands Stryker's presence in mechanical thrombectomy, while the Amplitude Vascular Systems acquisition broadens its cardiovascular portfolio, reducing reliance on orthopaedics and enhancing long-term diversification. However, execution risks tied to production ramp-up, the temporary Inari supply disruption, cybersecurity remediation costs and macro pressures such as raw material inflation are likely to persist. Nevertheless, diversified end markets, resilient procedural demand and disciplined capital deployment position Stryker for sustained growth beyond 2026. Stryker has a Zacks Rank #3 (Hold) at present. Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. West Pharmaceutical reported second-quarter 2026 adjusted EPS of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%. West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.4%. McKesson reported a fourth-quarter fiscal 2026 adjusted EPS of $11.69, which beat the Zacks Consensus Estimate by 1.1%. Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%. McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.1%. Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%. Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stryker Corporation (SYK) : Free Stock Analysis Report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report McKesson Corporation (MCK) : Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Stryker (SYK) came out with quarterly earnings of $3.69 per share, beating the Zacks Consensus Estimate of $3.46 per share. This compares to earnings of $3.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.65%. A quarter ago, it was expected that this medical device maker would post earnings of $2.98 per share when it actually produced earnings of $2.6, delivering a surprise of -12.75%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Stryker, which belongs to the Zacks Medical - Products industry, posted revenues of $6.59 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.48%. This compares to year-ago revenues of $6.02 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Stryker shares have added about 0.2% since the beginning of the year versus the S&P 500's gain of 6.9%. While Stryker has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Stryker was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.73 on $6.72 billion in revenues for the coming quarter and $14.99 on $27.22 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Agilent Technologies (A), another stock in the same industry, has yet to report results for the quarter ended July 2026. The results are expected to be released on August 26. This scientific instrument maker is expected to post quarterly earnings of $1.48 per share in its upcoming report, which represents a year-over-year change of +8%. The consensus EPS estimate for the quarter has been revised 0.3% higher over the last 30 days to the current level. Agilent Technologies' revenues are expected to be $1.84 billion, up 6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stryker Corporation (SYK) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research