SYK · Q1 2026 Earnings

Cautious

Stryker Corporation

Reported April 30, 2026

30-second summary

A cyber incident late in Q1 distorted shipments and revenue recognition, dragging organic growth to 2.4% (vs. an FY guide of 8.0–9.5%) and adjusted EPS to $2.60 on $6.02B of revenue (+2.6% YoY). Management reaffirmed FY2026 organic and EPS guidance and framed the Q1 shortfall as deferred rather than lost, with catch-up loaded into H2 — though management explicitly declined to quantify the impact ("I can't give you any more breakout"). The quieter signal: three previously-disclosed FY metrics (other income/expense ~$420M, tax rate 15–16%, and the ~$400M tariff load) were not all re-disclosed this quarter — other income/expense and tax rate were reaffirmed in the transcript, while the ~$400M tariff figure dropped out.

Headline numbers

EPS

Q1 FY2026

$2.60

Revenue

Q1 FY2026

$6.02B

+2.6% YoY

Gross margin

Q1 FY2026

63.3%

Free cash flow

Q1 FY2026

$0.41B

Operating margin

Q1 FY2026

15.5%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$6.02B	+2.6%	$7.17B	-16.1%
EPS	$2.60	—	$4.47	-41.8%
Gross margin	63.3%	—	64.5%	-120bps
Operating margin	15.5%	—	25.2%	-970bps
Free cash flow	$0.41B	—	—	—

Guidance

Management reaffirmed full year 2026 organic sales growth and EPS guidance despite a cyber incident that reduced Q1 sales by ~3 percentage points, signaling confidence in recovery throughout the remainder of the year.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Other income and expense	FY 2026	approximately $420 million	Withdrawn — no replacement	—	Withdrawn
Effective tax rate	FY 2026	15% to 16%	Withdrawn — no replacement	—	Withdrawn
Tariff impacts	FY 2026	approximately $400 million	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Organic net sales growth (8.0% to 9.5%), Adjusted net earnings per diluted share ($14.90 to $15.10)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
MedSurg and Neurotechnology	$3.207B	+5.0%
Orthopaedics	$2.813B	+0.1%
Instruments	$0.92B	+9.9%
Endoscopy	$0.868B	+0.1%
Vascular	$0.517B	+27.5%
Trauma and Extremities	$1.035B	+9.5%
MedSurg and Neurotechnology organic growth	0.9%	—
Orthopaedics organic growth	4.1%	—

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
United States	$4.476B	+0.8%
International	$1.544B	+8.3%
Organic net sales growth	2.4%	—
Adjusted operating income margin	21.1%	—
Adjusted gross profit margin	63.6%	—
Operating cash flow	$581M	—

Management tone

Disclosure posture shifted toward deliberate restraint on segment-level commentary. Management opened with "This situation will not enable us to provide the normal level of detail or explanations that you are accustomed to hearing from us" — and Preston explicitly declined to break down segment-level sales results, saying "because their individual results this quarter are not indicative of the underlying market performance, I will not be going into detailed sales results by business." The signal isn't bad news being hidden; it's that the operational machinery that generates Stryker's normally tight sub-segment commentary was itself disrupted. That said, a withdrawn tariff line on the same print as a reaffirmed headline guide deserves more skepticism than management's framing invited.

Tariff language went qualitative. Last quarter tariffs were quantified at ~$400M with explicit H1-FY26 weighting. This quarter — the H1 quarter when the load was supposed to be heaviest — Preston referenced only "some anticipated improvements in the tariff outlook" without numbers, while noting tariffs were a contributor to the -190bps adjusted gross margin compression. The math isn't in the print, and that's the gap to watch on Q2.

Cyber incident framed as operational, not demand-related — and the Q&A evidence supports that. Management leaned hard on the demand-vs-shipment distinction: "Underlying demand across our businesses remain healthy in Q1, even as the cyber incident created operational disruption," paired with the BTIG exchange confirming no pause in orders, only a ~3-week pause in shipments. Mako had a record Q1 despite the disruption. The framing is credible on its face — but it shifts all the risk to H2 execution, where catch-up shipments, normal-cadence shipments, and the tariff load all converge.

EPS reaffirmation language is one of commitment, not conviction. This quarter's language is "We remain committed to meeting our full year guidance for organic sales growth and adjusted earnings per share as our underlying business momentum remains strong." "Committed to meeting" reads as the language of a target being defended, not a target being exceeded — appropriate given the Q1 distortion, but worth tracking against prior tone on Q2.

Recurring themes management leaned on this quarter:

Cyber incident recovery and operational resilienceMaintained full-year guidance despite Q1 disruptionUnderlying demand remains healthy across businessesProcedural volume strength and robotic surgery adoptionDifferential impact of incident across business models and supply chain flexibilityConfidence in catch-up sales realization through remainder of year

Risks management surfaced:

Cyber incident operational disruption impact on revenue recognition and manufacturing absorptionTariff headwinds impacting marginsInterest expense from 2025 debt issuanceGeopolitical risks in Middle East including Iran conflictWorking capital pressure from cyber incident impact on receivables and inventory timing

Q&A highlights

Robbie Marcus · JP Morgan

Asked about cadence of recovery through the rest of the year given the cyber disruption, how much upside was removed from guidance to reiterate it, and whether Stryker still expects to capture most of the upside.

Management explained recovery will be uneven across businesses due to different operating models. Orthopedic cases with consigned inventory will see revenue recognition catch-up in H2, while make-to-order products will recover throughout H2. They are focused on reconfirming full-year guidance and will reassess at Q2 earnings for potential upside.

Orthopedic revenue recognition items will be caught up in H2Some deferred procedures will bleed into Q3 and Q4Make-to-order products will recover in back half of yearManagement will reassess full-year guidance at Q2 earnings

Ryan Zimmerman · BTIG

Asked whether the Q1 order pause was due to inability to serve or demand reduction, and about the capital business health.

Management clarified there was no pause in orders, only a pause in shipments due to 3-week production shutdown. Hospital order book remains very healthy with no new demand dynamics. Mako had record Q1 and would have been higher without production disruption.

No pause in orders, only shipments paused for ~3 weeksHealthy hospital order book with no new demand dynamicsMako had record Q1Strong hospital balance sheets and continued product interest

David Roman · Goldman Sachs

Asked about Inari business trajectory one year post-acquisition, commercial and Salesforce challenges, and opportunity from AVS acquisition.

Management expressed excitement about Inari, noted management changes and strikerization mostly complete, indicated Salesforce challenges have faded. AVS acquisition in same call point with same sales positions will be a turbo booster. They expect clear sailing ahead and continue to seek innovation acceleration through acquisitions.

Inari management changes and strikerization mostly completeAVS in same call point as Inari, same sales positionsMarket has huge untreated patient populationPursuing both internal development and acquisition strategies for innovation

Travis Speed · Bank of America Global Research

Asked why Stryker is acquiring pre-commercial stage Amplitude in peripheral vascular, whether size of company changes risk tolerance, and whether to expect more early-stage deals.

Management clarified this is not pre-revenue years away; FDA approval expected before year-end with potential product sales before end of 2025. Focus is on business type (PMA products in PV space) not company size. They've done similar early-stage investments in neurovascular and are comfortable taking calculated risks for value-creating deals.

Potential FDA approval before end of 2025Product may be saleable before end of yearSimilar early-stage investment strategy used in neurovascularNot pre-revenue; very close to commercialization

Answers to last quarter's watch list

Q1 FY26 tariff absorption — The ~$400M FY tariff figure was not re-disclosed this quarter; management referenced "some anticipated improvements in the tariff outlook" qualitatively. Adjusted operating margin came in at 21.1% (-180bps YoY) — below the trajectory needed for FY +100bps expansion, though the cyber incident makes the print uninterpretable as a margin signal. The structural-margin claim is neither confirmed nor refuted; the test is pushed to Q2.

Not resolved

Encompass total ankle launch traction and Q2 FY26 CMS reimbursement impact — Not specifically called out; the company didn't disclose.

Continue monitoring

Mako shoulder launch mid-2026 — Reaffirmed for mid-year on Mako 4; already available on Mako 3. Management noted Mako had a record Q1 broadly.

Resolved positively

Whether FY26 organic guidance gets raised on the Q1 print — Guidance was reaffirmed, not raised. Management's Q&A language suggests any pre-incident upside has been absorbed into the existing range, and the next reassessment is at Q2. The path to a 10%+ outcome has narrowed materially.

Resolved negatively

Inari sales-force stabilization and end of destocking by end of Q1 FY26 — David Roman's Q&A drew the clearest answer: Inari management changes and "strikerization" mostly complete; Salesforce challenges have faded. Vascular grew +27.5% on the quarter against a still-favorable comp. The destocking chapter appears to be closing as projected.

Resolved positively

EU MedTech approval timing (Pangea, Insignia) — Pangea received European approval and will begin ramping in H2 FY26; LifePak 35 also approved in Europe. Production constraints from the cyber incident will delay the European ramp curve, but the approvals themselves are in hand.

Resolved positively

What to watch into next quarter

Whether the ~$400M FY tariff figure returns to disclosure on Q2 — silence on the most operationally consequential cost-line guide is the print's most concrete tell. Re-disclosure with the figure intact (or revised lower, consistent with the "improved outlook" framing) would validate the operational-only narrative; continued silence would suggest the cyber incident interacted with the H1-weighted tariff load in ways management isn't yet ready to quantify.

Q2 organic growth required to keep FY 8.0–9.5% in reach — with Q1 at 2.4% organic, Q2-Q4 must average roughly 10–11% organic to hit the FY midpoint. Watch whether Q2 organic clears 8% on its own (suggesting catch-up is concentrated in H2) or whether the recovery loads onto Q3 and Q4.

Adjusted operating margin recovery from Q1's 21.1% (-180bps YoY) — the FY +100bps expansion commitment requires meaningful Q2-Q4 average operating margin lift. Q2 needs to show clear sequential improvement; flat-to-modest expansion would put the structural-margin case under real pressure.

US organic growth recovery — US grew just +1.9% organic in Q1 against International's +3.9% organic. Watch whether US growth re-converges to mid-to-high single digits by Q2, which is the cleanest test of the "shipment timing, not demand destruction" thesis.

Vascular ex-Inari-comp organic — with Inari "strikerization" described as mostly complete, Q2 should show whether underlying Vascular procedural growth translates cleanly into reported numbers as the no-Inari comp base burns off.

Whether management restores normal segment-level disclosure on the Q2 print — the explicit restraint this quarter is justified by the cyber distortion; if the same restraint persists on Q2, that's a separate problem from the cyber incident itself.

Sources

Stryker Corporation, Q1 2026 Earnings Press Release (SEC EX-99.1): https://www.sec.gov/Archives/edgar/data/310764/000031076426000025/sykex991earningsq12026.htm
Stryker Corporation, Q1 2026 Earnings Call Transcript (April 30, 2026) — prepared remarks and Q&A.

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