Stryker Caps Strong 2025 with Record Robotics Growth, Eyes Further Expansion Amid Tariff Headwinds
Stryker Corporation (NYSE: SYK) closed a powerful fiscal 2025, showcasing resilience and strategic execution that delivered double-digit growth across key metrics. During its fourth-quarter and full-year earnings presentation, company leadership painted a picture of an organization firing on all cylinders, even as it prepares to navigate fresh macroeconomic challenges in the coming year.
"Our performance in 2025 was outstanding, reflecting robust demand across our diverse portfolio," stated Chair and CEO Kevin Lobo. The numbers back his assessment: full-year organic sales surged 10.3%, pushing total revenue past the $25 billion milestone. The fourth quarter was particularly strong, with organic growth hitting 11%. Geographically, the U.S. market led with 11.2% growth, while international sales grew 7.5%, powered by emerging markets and established regions like Japan and South Korea.
The standout story, however, was the continued meteoric rise of surgical robotics. The company announced a "yet another record quarter" for installations of its Mako robotic-arm assisted surgery systems, pushing the global installed base beyond 3,000 units. More critically, utilization rates are climbing sharply. In the U.S., over two-thirds of knee procedures and more than one-third of hip procedures were performed using Mako by the end of 2025. "We see no inherent ceiling for robotics adoption," Lobo remarked, suggesting the technology is on a path to becoming the standard of care in joint replacement.
Financial health remained robust. CFO Preston Wells reported full-year adjusted earnings per share (EPS) of $13.63, an 11.8% increase from 2024. The company also generated a formidable $5 billion in cash from operations. Perhaps most telling for investors, Stryker achieved a second consecutive year of at least 100 basis points of adjusted operating margin expansion, a signal of improving operational efficiency and pricing power.
Looking ahead to 2026, Stryker provided guidance for organic net sales growth between 8% and 9.5%, with adjusted EPS projected in the range of $14.90 to $15.10. This outlook comes with a notable caveat: an expected $400 million headwind from tariffs, with approximately $200 million of that being incremental new pressure in the first half of the year. Lobo, however, was undeterred, pointing to the "margin muscle" the company has built to absorb such costs while continuing its expansion trajectory.
The company also highlighted its growth strategy, which hinges on specialization—such as splitting sales forces into focused units—and a steady diet of "tuck-in" acquisitions. Lobo confirmed the M&A pipeline remains "very healthy." In a leadership shift aimed at future-proofing the organization, Spencer Stiles was elevated to President and COO in December, a move Lobo said will allow him to dedicate more time to operational strategy and emerging technologies like AI.
Market Voices:
"These numbers are a masterclass in execution," said David Chen, a portfolio manager at Horizon Health Capital. "Hitting margin targets while absorbing tariffs and still investing heavily in growth areas like robotics shows a business with exceptional discipline. The guidance suggests they see the underlying demand story remaining intact."
"The robotics narrative is compelling, but let's not ignore the soft spots," countered Maya Rodriguez, an independent equity analyst known for her bearish takes on medtech valuations. "Foot and ankle was 'soft,' and they're leaning on a new product launch to fix it. The 'high teens' growth in vascular is good, but stocking effects are a classic way to mask slowing underlying demand. At this valuation, perfection is priced in, and this report isn't perfect."
"As a former OR nurse, the utilization stats are what matter," shared Dr. Arjun Mehta, a practicing orthopedic surgeon. "Moving from robots being a novelty to being used in over 50% of knee cases globally in a few short years is a seismic shift. It locks in Stryker's ecosystem for years to come and creates a powerful recurring revenue stream from instruments and implants."