Overview:
Reported earnings, while also down, did not concern Wall Street’s analyst corps who liked what they saw.
Saying “backlog is as high as it has ever been,” Stryker Corporation reported $5.8 billion in Q1 sales, up nearly 12% from 2024’s Q1 but lower operating profits at $837 million. Reported earnings, while also down, did not concern Wall Street’s analyst corps who liked what they saw, saying, to paraphrase one analyst: “Q1 2025 was a top, middle and bottom beat.”
Strong Procedure Volumes Drove Sales, But Profits Slipped
Kevin Lobo, chair and chief executive officer, Preston Wells, chief financial officer, and Jason Beach, vice president of finance and investor relations, shared Stryker’s 2025 first quarter earnings in a recent call.
“In the first quarter, we delivered robust organic sales growth of 10.1%, with double-digit growth in MedSurg and Neurotechnology and high single-digit growth in Orthopaedics, despite one less selling day and a 10% comparable from a year ago. This performance reflects the sustained demand across our product portfolio and our team’s vigorous commercial execution,” said Lobo.
He added that U.S. sales were very strong with double-digit organic growth in Trauma and Extremities, Neuro Cranial, Medical, Endoscopy and Instruments. The company also saw growth in its international business, especially in Australia, New Zealand, Japan and Europe.
Lobo also pointed to the acquisition of Inari Medical and the sale of their U.S. Spinal Implants business as having positive impact on revenue growth as well.
Stryker is now anticipating full year organic sales growth between 8.5% to 9.5%.
Beach added, “Mako continues to drive patient and customer interest, highlighted by our best ever Q1 for installations in the U.S. and worldwide, with high utilization rates across the globe. We continue to receive positive feedback on Mako Spine and Shoulder and remain on track for full U.S. commercial launch of Mako Spine in the second half of this year, and Mako Shoulder in the first quarter of 2026.”
Stryker recently launched its next-generation Mako 4 SmartRobotics system which features a larger monitor for improved visibility, and a smaller OR footprint for fast setup and transport.
Analysts Push for More Details on Tariff Impact and AdvaMed
Robert Marcus with JPMorgan asked how the company plans to offset the cost of the $200 million tariff price tag.
Wells said that it is important to note that the $200 million is based on what tariffs are currently in effect today and doesn’t include those paused for the 90 days.
When it comes to mitigating that cost, he said their strategy includes sales momentum and price and optimizing their supply chain.
Marcus also asked about the sustainability of the current growth in orthopedics.
Lobo said that there is still significant demand for their orthopedic products and that they expect the market to grow between 4% to 5%.
Travis Steed with Bank of America asked about the possibility of tariff exemptions for medical devices and Stryker’s relationship with AdvaMed.
Wells, “In terms of AdvaMed, I know there’s a lot of those conversations that are going on. As of right now, there really is no blanket exemption for medical devices.”
Danielle Antalffy with UBS raised concerns about the possibility of a recession and how recession-proof Stryker really is.
Lobo offered some reassurance, saying they haven’t been seeing any signs of that. He said, “So far, we’re not seeing any signs of slowdown. Our order book is really elevated. Our backlog is as high as it’s ever been.”
He explained that most of their procedures are urgent and not likely to be cancelled.
