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November 3, 2025 • 4 min read
Stryker Corp (SYK), a global heavyweight in the medical technology space, recently released its financial results for the third quarter of 2025. To understand the company's current health and strategic direction, let's dive into the numbers from its latest 10-Q filing with the SEC. The report reveals a company experiencing strong revenue growth, driven by strategic acquisitions and robust performance in key divisions, even as it navigates the costs associated with this expansion.
For the three months ending September 30, 2025, Stryker reported total revenue of $6.1 billion, a healthy increase from $5.5 billion in the same period last year. This top-line growth translated to a net income of $859 million, or $2.22 per diluted share.
The following flow diagram provides a visual breakdown of Stryker's quarterly income statement, illustrating how revenue is transformed into profit after accounting for various costs and expenses.
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In the chart, you may notice an "Unallocated" cost category. This represents costs of sales, amounting to $159 million, that are not assigned to a specific business segment in the company's internal reporting. These are typically corporate-level manufacturing or inventory-related costs that benefit the entire organization.
Stryker's performance is best understood by looking at its two primary business segments:
MedSurg and Neurotechnology: This powerhouse segment, which includes everything from surgical instruments and endoscopic systems to neurovascular products, was the primary growth engine. It generated $3.8 billion in revenue, a significant jump from the prior year. The division posted a strong operating income of $1.1 billion, achieving an impressive operating margin of 29.0%. A standout performer was the Vascular business, which saw revenues climb to $525 million from $329 million, largely fueled by the recent acquisition of Inari Medical, a company specializing in products for venous thromboembolism.
Orthopaedics: This segment, focused on implants for hip and knee replacements as well as trauma surgeries, delivered a more modest performance with $2.3 billion in revenue. However, its operating income grew to $649 million, and its operating margin improved to 28.8%. A notable change in this segment is the sharp decline in Spinal Implants revenue, which fell to just $6 million from $172 million a year ago. This is the result of a deliberate strategic move by Stryker to sell off a large portion of this business earlier in the year, allowing the company to refocus its orthopaedic portfolio.
While revenue surged, Stryker's overall operating margin saw a slight compression, declining to 18.7% from 19.7% in the third quarter of 2024. This was primarily driven by costs not allocated to the operating segments. Key factors include a $73 million charge for "Goodwill and other impairments" and an increase in the amortization of intangible assets, often associated with recent acquisitions. These expenses highlight the costs of integrating new businesses and re-evaluating assets as the company's portfolio evolves.
Despite these pressures, the company demonstrated discipline in its operating expenses. Selling, general, and administrative (SG&A) costs grew at a slower rate than sales, indicating effective cost management amidst the expansion.
Stryker's third-quarter results paint a picture of a company in dynamic transition. The strong revenue growth, particularly from its MedSurg and Neurotechnology division, underscores a successful strategy of expansion through targeted acquisitions. The divestiture of its Spinal Implants business further sharpens its focus. While the costs associated with these strategic moves have temporarily weighed on overall profitability, the underlying performance of its core businesses remains robust. Investors will be watching to see how efficiently Stryker integrates its new assets and leverages its refined portfolio to drive sustained, profitable growth in the competitive medical technology market.
Last updated: November 3, 2025