Stryker Corporation

Welcome to the fourth quarter and full year 2025 Striker Earnings Call. My name is Leila, and I'll 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 8K filed today with the SEC. I will now turn the call over to Mr. Kevin Lobo, Chair and Chief Executive Officer. You may proceed, sir.

Welcome to Stryker's fourth quarter earnings call. Joining me today are Preston Wells, Stryker's CFO, and Jason Beach, Vice President of Finance and Investor Relations. For today's call, I'll provide opening comments followed by Jason with the trends we saw during the quarter and some product updates. Preston will then provide additional details regarding our results and guidance before opening the call to Q&A. Our 2025 results were outstanding for both Q4 and the full year across all key financial metrics. Against double-digit comparatives from the prior year, organic sales growth was 11% for Q4 and 10.3% for the full year, surpassing $25 billion in sales. Globally, for the full year, our neurocranial, endoscopy, instruments, and trauma extremities businesses all delivered double-digit organic sales growth, demonstrating continued robust demand across our product portfolios. Full year U.S. organic sales growth was an impressive 11.2%, and international organic sales growth was 7.5%. International results were led by strong performances in our emerging markets, South Korea, and Japan. These countries and our other international markets continue to represent significant growth opportunities for us, and we look forward to launching products internationally that have already demonstrated success in the United States. We also had excellent earnings and cashflow performance in 2025. While managing tariff headwinds, our teams delivered a second consecutive year of at least 100 basis points of adjusted operating margin expansion. This performance demonstrates strong operational execution and earnings power that we have been building up over time. Preston will cover cashflow, which was also a standout for us in 2025. Overall, our financial results reflect the durability of our high-growth offense with the following structural components. Exceptional talent and culture, active M&A, a steady cadence of product launches, and systematic specialization by creating new business units and splitting sales forces. The new smart care business unit within medical combines Vocera and Care AI, and we have split multiple sales forces in the past two years. One example is the new breast care sales force within endoscopy that launched at the beginning of 2025 and has contributed to their terrific growth. We have momentum entering 2026 and expect to continue delivering growth at the high end of MedTech, which is reflected in our full year 2026 guidance. Our financial position remains strong, providing firepower to execute on M&A in 2026. I would like to thank our teams for another terrific year, fueled by their commitment to our mission and unwavering dedication to our customers. With that, I'll now turn the call over to Jason.

Thanks, Kevin. My comments today will focus on providing an update on the current environment, as well as a few other highlights. Procedural volumes remain healthy in the fourth quarter, and we continue to expect the markets will remain strong in 2026, underscored by the continued adoption of robotic-assisted surgery, favorable demographics, and durable demand for our capital products. Our US capital-related businesses delivered robust performance in the quarter, helping to drive double-digit organic sales growth for Q4 in our instruments, medical, and endoscopy divisions. Hospital CapEx budgets remain healthy, and our capital order book continues to be elevated as we enter 2026. Next, powered by Mako 4, we delivered a stunning quarter and year of Mako installations with yet another record quarter, both in the US and worldwide. Our install base now includes more than 3000 Mako systems worldwide. Alongside our record number of installations, we also continue to see steady increases in utilization bolstering our number one position in US knees and hips. As we exited the year, over two thirds of our knees and over one third of our hips were performed on Mako in the US. Globally, utilization rates were approximately 50% for knees and over 20% for hips. We have significant momentum heading into 2026 and continue to receive very positive feedback on the latest Mako applications, including advanced primary with revision hip, spine, as well as shoulder, which will launch on Mako 4 mid-year. Finally, Inari, which is now known as our peripheral vascular business, had a strong finish to the year, highlighted by robust procedural growth in the high teens that was partially offset by the stocking, which will be minimal in Q1. We are set up for success in 2026 as the business approaches its one year anniversary as a part of Stryker. As a reminder, peripheral vascular is reported as part of our vascular division results. With that, I will now turn the call over to Preston.