Stryker SYK · USD

SEGMENT AND GEOGRAPHIC DATAWe segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics which aligns to our internal reporting structure and how our Chief Operating Decision Maker (CODM) assesses performance and allocates resources. The CODM is the Chief Executive Officer. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results using segment operating income. The Corporate and Other category shown in the table below includes corporate and administration, corporate initiatives and share-based compensation, which includes compensation related to employee stock options, restricted stock units and performance stock unit grants and director stock options and restricted stock unit grants.

REVENUE RECOGNITIONWe disaggregate our net sales by business and geographic location for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors.Products and services are primarily transferred to customers at a point in time, with some transfers of services taking place over time. In 2025 less than 10% of our sales were recognized as services transferred over time. Refer to Note 1 for further discussion on our revenue recognition policies. Segment Net SalesMedSurg and Neurotechnology:202520242023Instruments$3,183$2,834$2,534Endoscopy3,8073,3893,068Medical4,2043,8523,459Vascular1,9681,3071,226Neuro Cranial2,4852,1361,876$15,647$13,518$12,163Orthopaedics:Knees$2,656$2,447$2,273Hips1,8651,7041,544Trauma and Extremities3,9483,5073,147Spinal Implants185707713Other815712658$9,469$9,077$8,335Total$25,116$22,595$20,498United States Net SalesMedSurg and Neurotechnology:202520242023Instruments$2,562$2,267$2,016Endoscopy3,1332,7922,513Medical3,5103,1912,785Vascular1,048506483Neuro Cranial2,0521,7611,531$12,305$10,517$9,328Orthopaedics:Knees$1,924$1,788$1,676Hips1,1371,059988Trauma and Extremities2,9262,5862,297Spinal Implants118489500Other596504468$6,701$6,426$5,929Total$19,006$16,943$15,257International Net SalesMedSurg and Neurotechnology:202520242023Instruments$621$567$518Endoscopy674597555Medical694661674Vascular920801743Neuro Cranial433375345$3,342$3,001$2,835Orthopaedics:Knees$732$659$597Hips728645556Trauma and Extremities1,022921850Spinal Implants67218213Other219208190$2,768$2,651$2,406Total$6,110$5,652$5,241MedSurg and NeurotechnologyMedSurg and Neurotechnology products include surgical equipment, patient and caregiver safety technologies, and navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment, intensive care disposable products, clinical communication and artificial intelligence-assisted virtual care platform technology (Medical), minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke and venous thromboembolism (Vascular) and a comprehensive line of products for traditional brain and open skull-based surgical procedures, orthobiologic and biosurgery products, including synthetic bone grafts and vertebral augmentation products (Neuro Cranial).

CONTINGENCIES AND COMMITMENTSWe are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor, tax, intellectual property and other matters, the most significant of which are more fully described below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings the claimants seek damages as well as other compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for certain claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, results of operations and cash flows.Previously we were contacted by the United States Securities and Exchange Commission (SEC), United States Department of Justice (DOJ) and certain other regulatory authorities regarding whether certain business activities in certain foreign countries violated provisions of the FCPA and analogous local laws. We have completed our investigation into these matters. During 2025 we were informed by the SEC and DOJ that each agency had closed its inquiry. We are currently responding to inquiries by certain foreign authorities arising in the normal course of business. We do not expect these matters to have a material effect, if any, on our financial statements.We have conducted voluntary recalls of certain products, including our Rejuvenate and ABG II Modular-Neck hip stems and certain lot-specific sizes and offsets of LFIT Anatomic CoCr V40 Femoral Heads.

DEBT AND CREDIT FACILITIESWe have lines of credit issued by various financial institutions that are available to fund our day-to-day operating needs. Certain of our credit facilities require us to comply with financial and other covenants. We were in compliance with all covenants on December 31, 2025.In February 2025 we entered into a new revolving credit agreement that replaces our previous agreement dated October 2021. The primary changes included increasing the aggregate principal amount of the facility by $750 to $3,000 and extending the maturity date to February 25, 2030. On December 31, 2025 there were no borrowings outstanding under our revolving credit facility or our commercial paper program which allows for maturities up to 397 days from the date of issuance. The maximum amount of our commercial paper that can be outstanding at any time is $3,000. In February 2025 we issued $500 of 4.550% senior unsecured notes due February 10, 2027, $700 of 4.700% senior unsecured notes due February 10, 2028, $800 of 4.850% senior unsecured notes due February 10, 2030 and $1,000 of 5.200% senior unsecured notes due February 10, 2035. In June 2025 we repaid $650 of 1.150% senior unsecured notes. In November 2025 we repaid $750 of 3.375% senior unsecured notes. The following table summarizes our total debt at December 31:Summary of Total DebtRateDue20252024Senior unsecured notes:1.150%June 15, 2025$—$6493.375%November 1, 2025—7503.500%March 15, 20261,0009984.550%February 10, 2027498—2.125%November 30, 20278817774.700%February 10, 2028697—3.650%March 7, 20285995984.850%December 8, 20285975963.375%December 11, 20287046210.750%March 1, 20299398284.250%September 11, 20297447434.850%February 10, 2030794—1.950%June 15, 20309959932.625%November 30, 20307596691.000%December 3, 20318767723.375%September 11, 20329348244.625%September 11, 20347417405.200%February 10, 2035990—3.625%September 11, 20366956134.100%April 1, 20433933934.375%May 15, 20443963964.625%March 15, 20469849842.900%June 15, 2050643643Other—10Total debt$15,859$13,597Less current maturities1,0001,409Total long-term debt$14,859$12,188Unamortized debt issuance costs$70$63Borrowing capacity on existing facilities$2,911$2,160Fair value of senior unsecured notes$15,344$12,780The fair value of the senior unsecured notes was estimated using quoted interest rates, maturities and amounts of borrowings based on quoted active market prices and yields that took into account the underlying terms of the debt instruments.

INCOME TAXES On January 1, 2025 we prospectively adopted ASU 2023-09 (Topic 740): Income Taxes: Improvements to Income Tax Disclosures which expands the existing rules on income tax disclosures. This update requires entities to disclose specific categories in the tax rate reconciliation, provide additional information for reconciling items that meet a quantitative threshold and disclose additional information about income taxes paid on an annual basis. In determining the reconciling items we considered the effect of tax rulings as part of the statutory tax rate.Our effective tax rate was 28.1%, 14.3% and 13.8% for 2025, 2024 and 2023. The effective income tax rate for 2025 increased from 2024 due to the 2025 tax effect of transfers of intellectual property between tax jurisdictions and the 2024 tax effect of the sale of the Spinal Implants business. The effective income tax rate for 2024 increased from 2023 due to the 2023 tax effect of transfers of intellectual property between tax jurisdictions offset by the 2024 tax effect of the sale of the Spinal Implants business. Effective Income Tax Rate Reconciliation2025AmountPercentUnited States federal statutory rate$94821.0%State and Local Income Taxes, Net of Federal Income Tax Effect(1)1733.8Foreign Tax EffectsIrelandStatutory tax rate difference(177)(3.9)Other170.4Puerto RicoStatutory tax rate difference(49)(1.1)Withholding Tax601.3Expiration of credits carryforward781.7Change in valuation allowance(78)(1.7)Other(4)(0.1)Other foreign jurisdictions200.4Effect of changes in tax laws or rates enacted in the current period——Effect of Cross-Border Tax LawsDirect foreign tax credits(90)(2.0)Global intangible low-taxed income701.6Tax CreditsResearch and development tax credits(53)(1.2)Changes in Valuation Allowances——Nontaxable or Nondeductible ItemsSpinal Implants divestiture(51)(1.1)Transfers of intellectual property4059.0Changes in unrecognized Tax Benefits170.4Other Adjustments(18)(0.4)Effective Tax Rate$1,26828.1%(1) State taxes in Pennsylvania, New York, Illinois, Florida, California, Michigan, Indiana, and Tennessee accounted for the majority (greater than 50%) of the tax effect in this category.Effective Income Tax Rate Reconciliation20242023United States federal statutory rate21.0%21.0%United States state and local income taxes, less federal deduction1.11.1Foreign income tax at rates other than 21%(4.1)(6.8)Tax related to repatriation of foreign earnings0.31.

ACQUISITIONSWe acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. Cash paid for acquisitions, net of cash acquired was $4,960 and $1,628 in 2025 and 2024.In February 2025 we completed the acquisition of Inari for $80 per share, or an aggregate purchase price of $4,810, net of cash acquired. Inari's product portfolio includes minimally invasive products for the treatment of venous thromboembolism. Inari is part of our Peripheral Vascular business within MedSurg and Neurotechnology. The purchase price allocation for Inari is based on preliminary valuations, primarily related to developed technologies and customer relationships. Goodwill attributable to the acquisition reflects the strategic benefits of expanding our market presence, diversifying our product portfolio and advancing innovations. This goodwill is not deductible for tax purposes. Share-based awards for Inari employees vested upon our acquisition and a charge of $139 was recorded in selling, general and administrative expenses in 2025.In 2024 we completed various acquisitions for total consideration that includes $1,628 in upfront payments, net of cash acquired, and $400 contingent upon the achievement of certain commercial or clinical milestones. The combined acquisition-date fair values of the contingent milestone payments totaled $208. The acquired companies expand the product portfolios of our Instruments, Endoscopy, Medical and Neuro Cranial businesses within MedSurg and Neurotechnology and our Trauma and Extremities and Joint Replacement businesses within Orthopaedics. Goodwill attributable to the acquisitions reflects the strategic benefits of expanding our market presence, diversifying our product portfolio and advancing innovations. This goodwill is not deductible for tax purposes.

Primary management responsibility for assessing, monitoring and managing our cybersecurity risks rests with our chief information security officer ("CISO"). Our current CISO has over 30 years of experience in information technology and cybersecurity in the United States military, retail and healthcare sectors and oversees our team of cybersecurity professionals. The CISO is regularly informed about recent developments in cybersecurity, including potential threats and innovative risk management techniques. The CISO implements and oversees processes for the regular monitoring of our information systems. We use various tools and methodologies to manage cybersecurity risk that are tested regularly. We also monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests and threat intelligence feeds. In addition, we engage third-party consultants to conduct annual cybersecurity assessments and to conduct audits for compliance with regulatory, Sarbanes-Oxley Act, Service Organization Control Type 2 and International Organization for Standardization standards. We also engage third parties to assess our cybersecurity maturity and risk management programs.We use a cross-departmental approach to addressing cybersecurity risk, with our cybersecurity, product security and legal teams presenting quarterly on key topics to a committee of leaders in technology, legal, finance, regulatory and corporate affairs functions. This leadership committee meets quarterly to ensure that we have input and oversight from critical stakeholders into our cybersecurity program and evolving issues.The CISO oversees a training and awareness program for employees to take part in protecting the Company against cybersecurity risks. We have implemented annual mandatory security education to help employees understand cybersecurity risks and comply with our cybersecurity policies. Additionally, we provide frequent communications around pertinent cybersecurity topics and policies to all employees. We also provide additional cybersecurity and data protection training to employees in certain roles. As part of our cybersecurity risk management program, we also conduct cybersecurity, data protection, and privacy assessments on all third parties who integrate with Stryker’s data, network, systems and products. We use a combination of internal and external tools to confirm that these third parties meet our security requirements.

CAPITAL STOCKThe aggregate number of shares of all classes of stock which we are authorized to issue is up to 1,000,500,000, divided into two classes consisting of 500,000 shares of $1 par value preferred stock and 1,000,000,000 shares of common stock with a par value of $0.10. No shares of preferred stock were outstanding on December 31, 2025.We made no repurchases of shares in 2025. The manner, timing and amount of repurchases are determined by management based on an evaluation of market conditions, stock price and other factors and are subject to regulatory considerations. Purchases are made from time-to-time in the open market, in privately negotiated transactions or otherwise. On December 31, 2025 the total dollar value of shares of our common stock that could be purchased under our authorized repurchase program was $1,033.Shares reserved for future compensation grants of our common stock were 31 million and 18 million on December 31, 2025 and 2024. Stock OptionsWe measure the cost of employee stock options based on the grant-date fair value and recognize that cost using the straight-line method over the period in which a recipient is required to provide services in exchange for the options, typically the vesting period. The weighted-average fair value per share of options is estimated on the date of grant using the Black-Scholes option pricing model. Option Value and Assumptions202520242023Weighted-average fair value per share$141.40$118.22$83.59Assumptions:Risk-free interest rate4.4%4.3%4.0%Expected dividend yield0.9%1.1%1.2%Expected stock price volatility29.1%29.9%29.0%Expected option life (years)6.46.36.2The risk-free interest rate for periods within the expected life of options granted is based on the United States Treasury yield curve in effect at the time of grant. Expected stock price volatility is based on the historical volatility of our stock. The expected option life, representing the period of time that options granted are expected to be outstanding, is based on historical option exercise and employee termination data. 2025 Stock Option ActivityShares (in millions)Weighted-AverageExercise PriceWeighted-AverageRemainingTerm (in years)AggregateIntrinsic ValueOutstanding January 110.8$214.87Granted1.0392.36Exercised(1.2)158.83Canceled or forfeited(0.2)313.05Outstanding December 3110.4$234.565.0$1,246.1Exercisable December 316.9$195.533.7$1,073.4Options expected to vest3.3$309.917.5$166.