Stryker at Bank of America 2025 Healthcare Conference: Strategic Growth and Innovation

On Tuesday, 13 May 2025, Stryker Corporation (NYSE:SYK) participated in the Bank of America 2025 Healthcare Conference, unveiling a robust strategic outlook. The company, led by CFO Preston Wells and VP of Finance and IR Jason Beach, reported significant Q1 revenue growth alongside plans for continued innovation and strategic acquisitions. Despite challenges like tariffs and supply chain issues, Stryker remains optimistic about its growth trajectory.

Key Takeaways

• Stryker reported an 11.1% revenue growth in Q1, driven by strong procedural growth and a solid order book.
• The company is managing tariff impacts effectively, reducing potential costs from $200 million to between $25 million and $50 million.
• The integration of Inari Medical is expected to be accretive to growth with $100 million in synergies.
• Stryker is committed to a 30 basis point annual profitability improvement and a multi-year growth strategy.
• New product launches, including Mako Spine and Mako Shoulder, are planned for 2026.

Financial Results

• Revenue Growth: Stryker achieved an 11.1% increase in Q1 revenue.
• Tariffs: Initially expected to impact $200 million, changes in China tariffs could reduce this to $25 million-$50 million.
• Profitability: The company is on track for a 200 basis point improvement over two years, with a commitment to at least 30 basis points annually thereafter.
• Pricing: Positive pricing strategies are being implemented across the company.
• Inari Medical: The acquisition is progressing well, expected to boost growth without operating margin dilution.

Operational Updates

• Commercial Model: Stryker’s success is attributed to its specialized sales, marketing, and R&D teams.
• M&A Activity: The acquisition of Inari Medical and the divestiture of the Spine business are key components of their growth strategy.
• Supply Chain: Medical surgical supply issues are expected to ease in the latter half of the year, with no impact on the LP35 defibrillator launch.
• Product Launches: The LP35 defibrillator and the 1788 camera are performing well, with the Mako platform continuing to drive growth.

Future Outlook

• Growth Strategy: Focus on top-line growth through a differentiated commercial strategy, M&A, and strategic capital allocation.
• Tariff Mitigation: Implementing dual sourcing and changing trading lanes to mitigate tariff impacts.
• Margin Expansion: Continues to aim for a 30 basis point annual improvement.
• New Products: Launch of Mako Spine and Mako Shoulder scheduled for 2026.
• Recession Planning: Strategies include working with customers to ensure profitability from procedures.

Q&A Highlights

• Tariffs: Potential impact reduced to $25 million-$50 million due to changes in China tariffs.
• Pricing Strategy: Successful implementation of value-based pricing.
• Supply Chain: No changes in production locations despite challenges.
• M&A and Margins: Focus on driving profitable growth, offsetting any margin dilution from acquisitions.

In conclusion, Stryker’s presentation at the conference highlighted its strategic focus on growth and innovation. For a detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - Bank of America 2025 Healthcare Conference:

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Travis Steed, the Bank of America Medical Device Analyst and continuing our day of med tech conversations. Next up, we’ve got Stryker Corporation, Preston Wells, newly appointed CFO, and Jason Beach, VP of Finance and IR. Welcome. Thanks for joining Yeah,

Preston Wells, CFO, Stryker: thanks for having us.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: So Preston, maybe I’ll start out in a new CFO. You’ve been a Stryker a while. Investors have known you for a while in your former roles, and it seems like it’s a pretty seamless transition. And anything likely changing in your mind or, you know, doing anything differently at Stryker?

Preston Wells, CFO, Stryker: No. First of all, thanks for having us. You know, I would say it has been pretty seamless, I’ve had the fortune obviously, of being a Stryker for the last ten years. So a part of the agenda already in terms of our focus areas. And really, as we think about who we are as a company, it’s still gonna be a focus on on driving our top line growth through our differentiated strategy from a commercial perspective and M and A, and so really capital allocation will be a big part of what I’m focused on.

And then also driving our profitability story. You know, we talked about a couple of years ago, we committed to a 200 basis point improvement over the next two years, which would been last year and this year, And we’re still setting on that journey and expecting to get there by the end of this year, and obviously looking to develop a muscle that will continue forward.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Good. And just bigger picture, you guys, we used to think of Stryker as a mid single digit grower, moved up to high single digits. Now you’re flirting with that double digit range. As I’ve been covering you guys, it’s been a gradual progression of acceleration in the top line. There’s probably been some mix shift going on, but just think about high level.

How do you fundamentally kind of energized the growth rate at Stryker? And kind of what’s the secret sauce there?

Preston Wells, CFO, Stryker: Yeah, the beautiful thing about it is we’re not overly reliant on any one product. We’re not overly reliant on any one part of the business. And so we’ve been able to really put in place a differentiated commercial model that allows us to be very focused in our specific categories that we play in. We have commercial model that sets up a sales force directly with a marketing team and an R and D team that really specializes in a particular part of our business. And so our goal is how do we continue to fuel that organization with new products, whether it’s through our own internal innovation or with our M and A strategy, and as we do so, really just infusing the whole group from a growth perspective.

And so we’ve been able to really kick start each one of those. So we’ve been fortunate enough to play in some categories that have been growing, but we’ve also been in some categories where we’ve been able to have good technology, like Amaco, that’s been able to drive a slower growing category to faster growth for us. So it’s really been a good model that we’ve been able to continue to drive. And like I said before, my goal is how do I make sure that we have the right capital allocation from a resource perspective so we continue that into the One other area I would just add, we recently closed our divestiture of our Spine business and the addition of Anari. So just again, adding a faster growing business in a faster growing segment as part of that overall focus that we have from a growth standpoint.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: So this is kind of like the new normal at Stryker, if you will?

Preston Wells, CFO, Stryker: We certainly hope so. It

Travis Steed, Bank of America Medical Device Analyst, Bank of America: seems like the bar is actually a little higher now just to bring a new product in

Preston Wells, CFO, Stryker: and new acquisition We’re very competitive, so it certainly fits with our nature. Yeah, actually, we continue to strive to do better than we did the previous year if we can.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: And then a question I get a lot is the execution at Stryker is always consistent. It doesn’t matter how crazy the world gets. We may worry about you guys, and next thing you know, it’s like, well, you guys are okay. It’s nonstop. It’s like, no matter what happens, you guys seem to figure it out, execute it.

What is it at Stryker that’s kind of allowed you to kind of keep that execution and stability of this business?

Preston Wells, CFO, Stryker: Yeah, I would say a couple of things. I think number one, I talked about our model. Our model is super focused at each category call point, so we spend a lot of time where other companies may not. And so it allows us to be really close to our customers. It allows us to really understand not only customer needs, but how those needs may change given a dynamic situation.

So I think our operating model certainly helps us. We have a great talent offense. We continue to develop leaders who are coming into these various businesses, and they’ve either grown up through Stryker or come into Stryker and learned and are then contributing as leaders of these different business units. And then the last part is I think we play in some categories that are really important, and they’re really important not only in terms of the public and health, but also for a lot of the hospital systems that we support. They’re profitable procedures that help drive growth for those hospitals.

So when you see times that are a little bit turbulent or there might be capital pullbacks in a broader sense, we still have parts of our business and majority of our business that are supporting procedures that are really important and profitable to the hospital system. And so they get prioritized in a lot of these crazy environments. It was interesting, Glenn, who’s our outgoing CFO, giving me a hard time. My first earnings call was with all these tariffs happening, and I had to remind him that my first earnings call as an investor relations was when COVID kicked off. So it’s been pretty much just ongoing changes that have happened, and we’ve been able to just work through all of those changing environments.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Paul, since you guys just reported Q1, it was 11.1% revenue growth in the quarter, I think even on a tough comp, I don’t if there’s anything, when you think about the quarter, how it played out, anything you wanted to kind of highlight, make sure you get clarity on?

Preston Wells, CFO, Stryker: No, mean, listen, I think all of our businesses are really continuing strong momentum. We’re seeing really strong procedural growth. That showed up as we look at our orthopedics business and both our hip and knee business is really outperforming the market in the quarter, as well as our trauma and extremities business, which has really accelerated behind Pangaea on the core trauma side. And then even in the capital environment, you know, we still see a really, really strong order book. We’ve seen strong capital pull through on a lot of those products, and quite frankly, a very healthy environment for us right now that, again, given some of the dynamics that are in the marketplace, we’re still able to see

Travis Steed, Bank of America Medical Device Analyst, Bank of America: a pretty strong pathway forward. On the tariffs, called out $200,000,000 You’re offsetting it. It’s been some news that maybe helps that over the weekend. How should we think about the China news over the weekend?

Preston Wells, CFO, Stryker: Yeah, it’s interesting. I think it’s just another case in point that things are changing pretty rapidly. Mean, here we are two weeks out from our earnings call. There’s already a big change. So when we think about China in terms of our overall business impact, the total business from a top line perspective, not that big, call it 2% to 3% of our total business that way.

Obviously, we do some sourcing from China as we think about raw materials that are coming from different places. But given the magnitude, 140%, one hundred and twenty five %, it did have an impact that was part of that $200,000,000 So with the changes, and we’re still working through it, and we’re still working through what it means from a mitigation standpoint, but we’re in that, call it, dollars 25,000,000 to $50,000,000 range that would impact that. Bring our number from 200 down 25,000,000 to $50,000,000

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay. So that $25,000,000 to $50,000,000 benefit, how much of that, and how do think about reinvesting that versus letting it flow through? Because you weren’t going to raise the EPS guide this quarter.

Preston Wells, CFO, Stryker: Right. So it’s something that we’re looking at. And again, I think part of what we’re trying to understand is where the dynamics are. If you remember, our $200,000,000 did not include the ninety day pause, the original ninety day pause. And so we have to really think about what happens, call it, in another forty to forty five days, what happens there in terms of some of those reciprocal tariffs coming back.

And, again, part of our mitigation factor would be how do we how do we offset that as well. And then thinking about is the is the ninety day pause on China truly ninety days, or will that be something that that’s ongoing? So we’re really looking at making sure that we’ve got the right mitigating factors in place to handle kind of all of those different scenarios. Certainly, as the year progresses, our expectation, as it is every year, we’re raising top line, we want to be raising the bottom as well. So we’ll look to see how much of that favorability we’ll be able to pass through, just depending on what the other dynamics happen

Travis Steed, Bank of America Medical Device Analyst, Bank of America: you think about, who knows what kind of we’re going to be annualizing for a full year at this point, but how are you thinking about potentially mitigation factors into ’twenty six? And also just the mindset of, Hey, at Stryker, we want to expand margins. We want to grow earnings double digits. That mindset, no matter what really happens in the macro.

Preston Wells, CFO, Stryker: Yeah, so first of all, that is the mindset. You know, I think when we guided at Analyst Day a couple of years ago, we wanted to get to this 200 basis point starting point and then at least 30 basis points of probability improvement every year thereafter. That’s still our expectation. And quite frankly, it’s something that we’re looking at how do we continue to grow that even more over time. So that’s the starting point.

As we think about where tariffs are and the annualization of tariffs, to your point, it’s still a moving target. We don’t quite know where we are. So a lot of the mitigation factors that we are putting in place are really what I would call hygiene type things. There are things that we’re looking at in terms of where we have dual sourcing and that we’re able to change some of the trading lanes that we have to get a more favorable tariff impact from that. We’re looking at elements around how we’re thinking about what’s included in the tariff and the impact from that standpoint.

And so there are things that, quite frankly, that we should be doing anyway and that aren’t having long term impact as we think about our overall supply chain model or financial model. So we haven’t made any decisions and, quite frankly, haven’t really even spoken about anything with regards to moving manufacturing, changing where we produce certain products, things like that. Those are all longer term decisions that, quite frankly, we need to get ourselves into a bit more of a stable environment in terms of what is going be the end game. And then if there are requirements or things that we need to change as a result of that, that’s when we would take

Jason Beach, VP of Finance and IR, Stryker: a look

Preston Wells, CFO, Stryker: at more longer term impacts.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: We move into another inflationary environment, like you think about what are some of the things you learned in 2022 that maybe you could implement this time faster? Just like, is Stryker kind of better positioned today to respond to inflation? How are you thinking about that?

Preston Wells, CFO, Stryker: Yeah, 100%. I think we learned And this is part of our profitability journey as well. And so within our supply chain and manufacturing areas, we learned a lot about how to deal with some pretty inflationary areas. And so as a result of that, we are well positioned to handle some of that now.

It doesn’t mean we won’t have any impact, but certainly being able to address where our products are coming from, how they’re coming in, what the costing of that is. And we’ve seen some of that even with some of the tariff actions, so some of the raw materials coming out of a place like China, you started to see suppliers already start asking for pricing. And so those are elements we were able to mitigate with some of those strategies that we would use if we get entered into another highly inflationary environment. So clearly, we’ve taken some of those lessons on the cost side of things. I think the other element that we’ve learned is around pricing.

If we think about where pricing was for our company entering into COVID, it was minimal to down. We really weren’t getting much out of any part of the business, and in the orthopedics business, we were losing quite a bit. And so as we saw last year, we see even at this first quarter, we’re posting positive price across the company, and so we’ve really learned from a pricing perspective as well how to go out and try to drive that also. So I think those two things would help us react a bit quicker than we certainly saw during the other period.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Where are you seeing the best places in your business to take price? Is it easier to take price now than it was three or four years ago? And is this pricing sustainable?

Preston Wells, CFO, Stryker: Yeah, so I wouldn’t say it’s easier, right? I think we’re still in a marketplace where there’s constant negotiation and constant discussion. And so I think for us, what we’ve just learned, how to do it a little better. We’ve learned how to put the right pricing behind the value that we bring with our products. And certainly, we bifurcate our business into orthopedics and med surg, on the orthopedic side, we certainly are having a lot more pricing pressure.

You’ve got three or four major competitors that are in that space. You’ve got most of your business that’s contracted over certain periods of time. But we have been able to mitigate some of the price. So where we maybe saw two to three points of price erosion every year, we’re starting to see that tail off to be a bit flat or down one versus down two or three. So that has been an area just through contracting and through the shift to the ASC that certainly helped us in that space.

On the MedSurg side, we see a bit more opportunity to price behind the products and services that we bring, and so that’s an area which, even in this last quarter, we were able to drive positive pricing in that business, and again, I think it is a sustainable model. Will we always go price positive as a company? I don’t know that we’ll always do that every quarter, but we’ll certainly be better than what we were historically. That’s helpful.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: The capital environment comes up a lot. I’m curious what you’re seeing. And we see the numbers reported revenue, that’s kind of like delayed. We don’t see the orders and the backlog and all that that you can see. So just can you shed any light on kind of like the leading indicators in your capital business at this point?

Preston Wells, CFO, Stryker: Yeah, absolutely. So when I think about our capital business, we do take orders in advance. So anywhere from three to six months on some of the faster moving items to even a year to a year longer on some of the longer lead items, like our booms and lights. And right now, our order book is strong as it’s been. I mean, we continue to see orders ramping up throughout the quarter.

It’s something that we pay a lot of attention to and understanding kind of where that spread is of orders versus sales. And quite frankly, it has stayed very, very strong, and it gives us that leading indicator gives us a really good sense of where we’re going be for at least the next few quarters. And then in our conversations with our customers, we’re not seeing that slow down at this point in terms of what their expectations are. And that probably gets back to what I’d mentioned earlier is that when we think about the products we’re supporting even with our capital, that it really does create an opportunity for hospitals to prioritize and to where they’re going get profitability.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: What are you seeing? Like, when you compare this to like 2022, like I was guilty thinking your business was slow. You remember?

Preston Wells, CFO, Stryker: I do. I was wrong.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: But just like, you guys never slowed. Is this environment better than 2022? Any corollaries?

Preston Wells, CFO, Stryker: I would tell you it’s different than 2020 And there’s a couple of things. And I actually think it’s maybe even different better a little bit in the sense that, remember in 2022, it was kind of coming out of this period of complete unknown, right? We went from an environment in 2020 where it was like, we’re never going do another procedure again to, oh my gosh, how am going to pay for these procedures? Because the inflationary element had gotten so out of control. And if you think about what a hospital was dealing with, they were dealing with higher prices maybe coming from suppliers.

They were dealing with the nursing shortage. They were dealing with higher prices for labor. They were dealing with a lot of uncertainty. Right now, I mean, if we’re talking about legislation that gets passed or cuts that are made, it’ll be pretty certain what it is. And so, again, I think they’ll create more certainty and then hospitals can react to what they need to do at that point in time.

None it is it all creates a little bit of uncertainty, but I think better now than maybe what it was when there was just a lot more of different parts that were moving that were uncertain.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: How do you think about managing the business? Like, let’s say we do go into a recession, are there levers you can pull on just helping customers finance products? Anything you think about how Stryker’s positioned if we go into recession somewhere around?

Preston Wells, CFO, Stryker: Yeah, I think same things that we would do, like we did even during ’twenty two, is really we look at the strength of our business. We look at the different opportunities we have to sell capital. We do have different opportunities to sell it either direct or through financing. Same thing on Mako. We look at direct and financing.

And then again, part of what’s important for our implants is they do drive profits, and so really just making sure that we are working with our customers to make sure that they’re getting those procedures That’s helpful.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: I did want to touch on a few other businesses and product And I’ll start with the one that the medical surgical, the med tech or the surgical supply issue in the quarter. Like what exactly was the supply issue? Is it more on you or more on your suppliers? Just like trying to think about like what happened in the quarter and then kind of the pathway to get it mitigated.

Preston Wells, CFO, Stryker: Yeah, couple of things. So one, we haven’t characterized all the specifics of it, certainly in between ourselves and our suppliers in terms of what’s happening there. And I think a couple of clarifications as well. It’s mostly on our OUS business, so it really impacted the growth of our medical business, OUS. Quite frankly, we expect that to continue a little bit through second quarter and start to alleviate in the back half of the year.

We really see that return to growth. The other clarification is it does not impact LP35. So LP35, the new defibrillator launch that we’re having, is still progressing really well in The U. S. Strong order book, strong sales.

I think Jason mentioned it on the call that it was meaningful to our sales growth the quarter and will continue to be, as we think about, a multiyear rollout of that product. We then will start our rollout of it in the regions outside The United States in the coming year as well, and so we’ll really see that be a multiyear tailwind for So really, just contained to the OUS market.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay. The LifePack, the installed base, think you’ve called it over 100,000 units installed globally, That’s a global number, right? It is. What’s the of The US, OUS We

Jason Beach, VP of Finance and IR, Stryker: have not dimensionalized US versus OUS, though it is heavier in The US for sure.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay. Any way to think about the one, you know, are we going to start to see an inflection in The US, you know, medical growth rate because of LifePAC? And internationally, you know, when are we going to start to see that show up more in the growth rates?

Jason Beach, VP of Finance and IR, Stryker: Yeah, no, I think as you go throughout this year, right, we talked about a robust order book specifically in The US, you’ll start to see that ramp as we go throughout 2025. And, you know, as we mentioned on the call, we’ll start getting outside of The US as we get to the end of this year and start to see an impact there as well.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay. And then Endo, the seventeen eighty eight camera, like in a year or two, you’ve always said year three is the big year, the Yeah,

Preston Wells, CFO, Stryker: that’s right.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: So it seems like pretty good outlook there on the camera.

Preston Wells, CFO, Stryker: Yeah, look, we’re pleased with where we are. You know, the thing about these products, these small capital products that we have, you know, you are talking about, you anywhere from three to five year cycles on these products. And so, you know, when we have these launches, there’s a lot of, you know, tailwind that’s behind the first few years. And so we’re expecting, you know, another year of good growth this year and then even, you know, even bigger for $17.88 next year.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay, that’s helpful. Then on the Pangaea play, wanted to touch on Pangaea as It’s taking some time to kind of build sets there. Are you kind of through that process now? Are we going to start to see some of the momentum in that business show up?

Preston Wells, CFO, Stryker: Yeah, I mean, think we’ve already started to see it. I think this is a huge launch for us. We’ve been very good in nailing, not as good in plating, and this really gives us a really competitive offering and is allowing us to go out and earn some share. And so you see that in the core trauma numbers. If I think about our trauma and extremities performance in the quarter, you know, it really is you know, that growth was really driven by both core trauma and upper extremities and core trauma on the back of Pangaea really starting to go.

So there’s still some more growth to happen in terms of building sets and getting sets out to our customers, and that’s even in The US. We’re just getting ready to start our launches outside The US, which will again contribute even more to that core trauma growth that’s driving the overall TV And

Travis Steed, Bank of America Medical Device Analyst, Bank of America: then Mako, you’ve had record placements for many quarters in

Preston Wells, CFO, Stryker: a row now. How sustainable is that? I always like when Jason says we have record number of Mako places, because that means in six to nine months’ time, when we get those Makos fully utilized, it usually leads to hip and knee share gains that we’ve had. And so I really think that it’s something that we’ve continued to do. We continue to build out Mako.

We recently launched Mako four. We’re adding different to that system, in particular, hip revision and complex hip application. And so what that’ll do is allow us to really have a robotic offering for a really, really difficult procedure. And by doing so, we’ll hopefully convert some additional business to even the primary hip as a result of surgeons starting to use the revision hip procedure as well. So I think by offering different procedures that are available on our Mako system and also spine and upper extremities as well for shoulder, it allows us to have a really differentiated offering that we can go out in the marketplace and continue to win with.

I think the other thing that can’t be overlooked is Mako’s been on the market for some time now in our major applications around total hip and total knee. And so we have a lot of good ten year data that we’re publishing around that, and I think that’s also helpful as we think about showing the benefit of what the system’s been able to do.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Do you think there’s going be synergies between launching shoulder, spine, and then you kind of drive even more knee volume through the makeup?

Preston Wells, CFO, Stryker: I think it has the potential to. I think the way that we’re thinking about the rollout of both spine and shoulder is on the back of this large install base that we already have, and so kind of building from the inside out. And in some cases where you do have some shoulder surgeons that are really primary shoulder, there’s an opportunity to start there and then move over to where hips and knees might be. But really, our plan and our goal is to leverage the base that we have

Travis Steed, Bank of America Medical Device Analyst, Bank of America: On shoulder, the shoulder business has been growing like 20% every quarter since you’ve acquired it, even before you acquired it, and I think now you’re number one share player in shoulder. Just like how incremental is the actual rollback gonna be to the business and the growth Yeah,

Preston Wells, CFO, Stryker: good question. So it’ll be different. So when we think about what Mako has been to hip and knee, it will be a little different to shoulder, right? Because we’re not running from a position of two or three to try to catch up. What it really will do, though, is it’ll do two things.

One, it’ll sustain where we are in terms of the number one share. I think the other thing it does is in a market like shoulder, which is really underpenetrated from a number of people that should be having the procedure, that are getting the procedure, it really allows us to continue to grow that expansion. If you think about where the market growth is coming from or where our growth is coming from, it’s coming from market. We continue to grow that market on top of being the number one share player.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay. When you just think about your pipeline in general and the of the durability of this growth, you guys have been through a super cycle, that’s what you called it. Just where are we in that super cycle? Is there going to be another super cycle coming? Is there enough behind this so we don’t have a cliff in the growth rates in some of these businesses?

Preston Wells, CFO, Stryker: Yeah, so I’ll lay out a couple of things, I know Jason will probably have a couple to add to that as well. But listen, the beauty of our products and the launches is they’re multi year. Just like you talked about even with 1788, which we talked a lot about two and three years ago, we’re still seeing the benefit from that. Something like Pangaea will be multiple years of benefit, even when we think about percuity. We talked about percuity several years ago, but that’s a seven to ten year cycle that you’re replacing capital on.

So all of these items will have multiple years of benefit that they’ll drive. In addition to that, you know, there are launches, even we’re just talking about Mako Spine and Mako Shoulder. Those will be things that really, in 2026, start to kick off in in in more full launch mode.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Mhmm.

Preston Wells, CFO, Stryker: You’ll have some other innovations that’ll be happening on some of our implant businesses, and then we have the continuous kind of incremental innovation that happens on our capital businesses as well. Then, you know, I think we have a lot of momentum behind the acquisitions that we’ve done.

Jason Beach, VP of Finance and IR, Stryker: Anything to add to maybe just one thing. First off, I think Kevin’s the master marketer when it comes to these terms. He’ll probably have another one here soon, but to Preston’s point on deals, as a reminder, we did seven acquisitions last year. So as you think about those gaining momentum throughout this year and into next year, there’s certainly going to be a tailwind to growth as You

Travis Steed, Bank of America Medical Device Analyst, Bank of America: guys have benefited a lot from like big shift, new products, revenue per product or whatever. Is something I think that’s probably driven my bad math, a couple points of growth even in some years? Is that sustainable going forward, do think? I think that’s

Preston Wells, CFO, Stryker: how we’ve always thought about it. When you launch the incremental innovation or any new innovation, you’re trying to price for that. That’s also part of the muscle that we develop from a pricing standpoint. So I think that’s something that we will continue to see as we launch new products. If we can drive the right differentiation from those products, from a benefits and feature standpoint, then we expect that we’ll be able to price them appropriately.

Okay.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: And then on M and A, how are you thinking about the environment? You did an acquisition earlier this year. Should we expect more in the near term coming up?

Preston Wells, CFO, Stryker: Yeah, listen, as we’ve talked about before, we’re still open to doing M and A. So obviously, we just closed the Inari deal, that’s in its early days of integration. We’re still in the integration phase for many of those acquisitions from last year. But like I’ve mentioned before, if we look at our model, we still have a lot of folks that are heavily involved in looking at their call point and where there’s opportunities from their call point to add additional products via M and A. You know, we’ll likely look at different type of tuck ins and elements that way that drive our growth.

But certainly, you know, the rest of this year and even beyond, we’ll continue to do M and A. That’s a big part of our growth strategy.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: How are you thinking about managing dilution on the margins front with acquisitions? Yeah, again, it’s

Preston Wells, CFO, Stryker: part of balancing scorecard that we’ve got, right? We obviously want to make sure we’re driving growth, but we’re driving profitable growth. So if we’re going to lose margin as a result of something that we’ve done from an M and A standpoint, we’ve got to go find it somewhere else. And so if we get back to what those drivers of that profitability are, so continuing to get consistent in our costs down from a manufacturing standpoint And being able to do that in a repeatable way allows us more flexibility. Certainly as we look at the elements beyond our commercial model and getting scale that way is also something that we’ll look.

So that’s shared services, that’s systems, that’s technology, really driving down costs and the quote unquote back office functions would be really another way. So as we look to really get better at those, it provides us more flexibility that if we do have some deals that are certainly dilutive from a profitability standpoint, until we can stand them up to be more profitable.

Jason Beach, VP of Finance and IR, Stryker: And Travis, I’d just add one other thing. I mean, we’ve proven that we can offset this dilution. If you think about the seven deals last year, majority of them actually came without margin dilution and still delivered the 100 basis points

Travis Steed, Bank of America Medical Device Analyst, Bank of America: last year. Yep. That’s a good point. On Inari, just think about the integration of that deal was the kind of the growth rate in the quarter kind of in line with plan, like how do expect that business to kind of grow over the next year and then once it goes organic as well?

Preston Wells, CFO, Stryker: Yeah. Yeah, so I mean, I think everybody was able to see the NRE growth rate prior to our acquisition of it. And so it’s certainly accretive to our business. And we expect it to stay there. And even if we can try to drive it faster, we will do that as well.

The integration’s gone well. It obviously was a short time to close, and so we closed the business. We appointed a leader of that business that came from one of our other Stryker businesses. So Tim Lanier left our Trauma and Extremities business and is now leading the Inari business. We’ve also started to infuse it with some other talent from inside Stryker, you have a nice balance of legacy Stryker and legacy Inari that’s able to drive that business.

I think the other thing that we’ve been able to do, done and Ari now would be our third or fourth larger scale in recent years, and so we’ve really been able to leverage the learnings from those deals, and each one has gotten a little better as we’ve gone through that process, and so we’ve been able to apply a lot of those learnings, not only from how we set up to go do the deal, but then also just from an integration standpoint. And so it’s allowing us to move a little bit faster and probably realize some of the benefits a little bit faster as well.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: And then meshing the Stryker and the NRI teams together has kind of been frictionless, if you will, or the culture

Preston Wells, CFO, Stryker: is Nothing’s without friction. But certainly, it has gone as expected. I mean, think you do any of these deals, you can expect a little bit of disruption to happen. I mean, there’s just the unknown sometimes, that creates that. But nothing to date that’s outside of any of the scope of what our expectations But

Travis Steed, Bank of America Medical Device Analyst, Bank of America: then the synergy side, like, I mean, our math was like $100,000,000 of synergies that you guys were going to get out of the business. Like, I don’t know how much of that’s G and A. Just like, how are you, now that you’ve, I guess you only see so much before you have an acquisition. So now that you’ve had the books open and you know the numbers, how are you feeling on the confidence of the synergies there?

Preston Wells, CFO, Stryker: We feel really good. Yeah, we feel really good. Like I said, I think this has so far gone to plan. I mean, is early, so I’ll caveat that. But certainly, what we’ve seen and what we think we can execute against, we feel really good against our deal model.

I

Jason Beach, VP of Finance and IR, Stryker: guess just to add to that, right, if you remember back in January, I guess, we said within Ari, there’d be zero to 20 basis points of op margin dilution. Obviously with our latest guide, we’ve said it’s zero. That also includes offsetting tariffs. So to press this point, we feel really good about the synergies.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Where are you finding the savings at?

Preston Wells, CFO, Stryker: Internally. They’re in lots of different places.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Lots of different And then I did want to give you, Jason, an opportunity just to make sure to comment on like the cadence of margins through the quarter growth. Anything like now you can look at street models, you know, kind of post quarter, anything you’d call out important for the year?

Jason Beach, VP of Finance and IR, Stryker: Yeah, I don’t think there’s anything that’s concerning from a street standpoint. You know, certainly as you think about op margin expansion, the one comment that we have made is, you know, you go back to last year, it was very much, I’ll say Q4 weighted in terms of getting the 100 basis points. That won’t be the case this year. It’ll be more evenly throughout the quarter. So, no, feel good about where things are at.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay. And then continued op margin expansion kind of beyond this year?

Preston Wells, CFO, Stryker: That’s the plan? That’s the plan. Great. Yeah, and certainly we have an Analyst Day in November, our goal is to, just like we’ve done in the previous ones, just update on our pathway forward that will include our expansion.

Travis Steed, Bank of America Medical Device Analyst, Bank of America: Okay, pretty similar kind of LRP timeline. It should the same kind of path you took on the LRP just past LRP. Probably do the same thing again?

Preston Wells, CFO, Stryker: Well, yeah. I mean, we’ll certainly from a planning standpoint, and then, yeah, we’ll we’ll communicate what our expectations are

Travis Steed, Bank of America Medical Device Analyst, Bank of America: in Alright. Perfect. That’s all I had. Thanks a lot.

Preston Wells, CFO, Stryker: Great. Thank Thanks,

Jason Beach, VP of Finance and IR, Stryker: Travis.

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