Stryker Q2 2025: Inari Acquisition Fuels 11.1% Sales Growth

Stryker Corp (SYK), a global leader in medical technologies, recently published its financial results for the second quarter of 2025. Today, we're examining its latest 10-Q filing to unpack the numbers, understand its major strategic moves, and see what they reveal about the company's health and direction.

For the quarter ending June 30, 2025, Stryker reported impressive top-line growth. Net sales climbed 11.1% to $6.02 billion, up from $5.42 billion in the same period last year. This performance builds on a strong start to the year, with six-month sales growing 11.5% to $11.89 billion.

The following flow diagram visualizes how the company's revenue breaks down and translates into profit for the second quarter.

Strategic Moves Reshape Segment Performance

Stryker's results are heavily influenced by a major acquisition and a significant divestiture, which led to diverging performance in its two primary business segments.

MedSurg and Neurotechnology: This segment, which includes products like surgical equipment, endoscopes, and neurovascular devices, was the primary growth engine.

• Sales surged 17.3% to $3.77 billion.
• A key driver was the February 2025 acquisition of Inari Medical, a company specializing in treatments for venous thromboembolism. This deal bolstered Stryker's Vascular business (formerly Neurovascular), which saw its sales leap an incredible 52.3% to $498 million.
• Other businesses in the segment, like Endoscopy (+17.1%) and Neuro Cranial (+19.8%), also posted strong double-digit growth.

Orthopaedics: This segment, focused on implants for hip and knee replacements and trauma surgeries, presents a more complex picture.

• Reported sales grew by a modest 2.0% to $2.25 billion.
• This figure is heavily skewed by the divestiture of its Spinal Implants business, which was completed in April 2025. As a result, revenue from this unit fell from $178 million in Q2 2024 to just $5 million this quarter.
• Excluding the divestiture, the segment's underlying business is much healthier. Trauma and Extremities grew 15.0%, and Hips grew 8.9%, indicating solid demand for its core orthopaedic products.

The Price of Growth: A Look at Profitability

While revenue growth is strong, Stryker’s profitability reflects the costs of its strategic initiatives. Net earnings for the quarter rose to $884 million, or $2.29 per share, from $825 million, or $2.14 per share, a year ago.

However, the company's operating income margin—a key measure of profitability from core operations—dipped from 19.4% to 18.5%. This pressure comes largely from costs associated with its aggressive acquisition strategy. For instance, selling, general, and administrative (SG&A) expenses rose to 34.5% of sales, partly due to a $139 million charge in the first half of the year for share-based awards for Inari employees that vested upon the acquisition.

To provide a clearer view of underlying performance, Stryker also reports adjusted figures, which exclude one-time items like acquisition costs and amortization. On this basis, the company's adjusted operating margin actually increased to 25.7% from 24.6% a year ago, signaling that the core business is becoming more efficient.

Looking Ahead

Stryker's second-quarter results paint a clear picture of a company in transformation. The $4.8 billion acquisition of Inari Medical is a significant investment in the high-growth vascular market, while the divestiture of the Spinal Implants business sharpens its focus on more profitable areas.

This strategy is fueling impressive sales growth but comes with the costs of integration and increased debt. To help fund the acquisition, the company issued senior notes totaling $3 billion in February. Looking forward, Stryker must navigate macroeconomic headwinds, including potential impacts from new tariffs mentioned in the filing, while successfully integrating its new assets. The key challenge will be to translate its top-line expansion into sustained, bottom-line profit growth.