Stryker Corporation — Income Statement, Cash Flows & Balance Sheet

Is Stryker profitable?

Stryker delivered strong revenue growth and improved operating income, though a much higher tax rate held back net earnings growth.

Revenue grew at a double-digit pace and operating income surged, partly because 2024 was dragged down by nearly $1 billion in goodwill impairments (primarily on the Spinal Implants business) that did not repeat at the same scale in 2025. However, Stryker's effective tax rate jumped from 14.3% to 28.1% — largely due to a one-time tax cost from transferring intellectual property between tax jurisdictions — which significantly muted the bottom-line benefit of the stronger operating performance.

Acquisition-related costs are a meaningful drag that investors should look through to assess the underlying business.

Stryker's $4.8 billion acquisition of Inari Medical in early 2025 brought with it sizable one-time costs — including a required accounting adjustment that temporarily inflated cost of sales and a $139M charge for Inari employee stock awards that vested at closing. These items are real cash costs but do not reflect the ongoing profitability of the combined business.

Where does Stryker's revenue come from?

MedSurg and Neurotechnology is the larger and faster-growing segment, with Vascular standing out as the star performer after the Inari acquisition.

MedSurg and Neurotechnology is now Stryker's clear growth engine, and the Vascular jump is almost entirely explained by the addition of Inari's venous thromboembolism products. On the Orthopaedics side, the Spinal Implants decline is not a sign of weakness — Stryker deliberately sold that business in April 2025. Stripping out Spinal Implants, the rest of Orthopaedics (Knees, Hips, Trauma) grew at a healthy mid-single-digit pace.

Does Stryker generate cash?

Stryker is a strong cash generator, and free cash flow (operating cash minus capital spending) grew meaningfully year over year.

The underlying business throws off substantial cash, and free cash flow expanded nicely. The big story on cash allocation in 2025 was the Inari acquisition, which consumed nearly $5 billion. Stryker funded this largely through new debt issuances while still paying $1.28 billion in dividends — demonstrating confidence in its ongoing cash generation.

How strong is Stryker's balance sheet?

Debt rose significantly to fund the Inari deal, but Stryker's cash position and credit facilities provide a comfortable liquidity cushion.

Debt is elevated but manageable given Stryker's cash flow profile. The company holds over $4 billion in cash, has a $3 billion revolving credit facility (undrawn at year-end), and its nearest large debt maturity is $1 billion due in March 2026. One watchpoint: goodwill and intangibles now total roughly $25 billion — more than half of total assets — reflecting years of acquisitions, so the balance sheet's strength ultimately depends on those acquired businesses performing as expected.