Stryker Corporation

Welcome to the second quarter 2026 Stryker earnings call. My name is Megan 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 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 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 U.S. 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 Salesforce 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 backorder 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, 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 exit 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.

Thank you, 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 remain 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 US procedural environment remains stable. While there has been some commentary on softness and 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, and many more. Thank you. Thank you. 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've just moved to full commercial launch. Additionally, we recently received approval and have initiated a limited launch for our Pangea trauma plating system in Europe to be followed by a full commercial launch during the fourth quarter. Within instruments, we look forward to the upcoming launch of the Soniped 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.