Report Date: Thursday, July 30, 2026, after market close (call to follow)
Stryker heads into its second-quarter report as a "show-me" story. Q1 2026 was disrupted by a cybersecurity incident first identified on March 11, 2026, which the company has said had a material impact on its operations, with resulting impact to the Company's financial results for the first quarter of 2026. Despite that, management stated it believes that the incident has not had, and is not reasonably likely to have, a material impact on the Company's 2026 full-year guidance, and confirmed it is fully operational across its global manufacturing network and commercial, ordering and distribution systems have been restored as of early April.
That reaffirmation — and the promise of a Q2/second-half recovery — is exactly what the market will be checking on Wednesday.
Stock performance: SYK sold off sharply after the Q1 print (from the mid-$300s to a 52-week low near $282-295 in early-to-mid May) on the earnings miss, but has since staged a strong recovery, closing around $350 on July 29, within striking distance of pre-selloff levels but still below its 52-week high near $405.
Q1 2026 results were messy by design of the cyber event: - Reported net sales rose 2.6% to $6.0 billion; organic sales growth was just 2.4% (1.9% U.S., 3.9% international), well below Stryker's normal high-single/double-digit cadence. - Reported EPS was $1.93 (+14.2% YoY, aided by lower impairments/one-timers), but adjusted EPS fell 8.5% YoY to $2.60, missing consensus (~$2.98) by roughly 13-15%. - Adjusted gross margin compressed 190bps to 63.6% and adjusted operating margin fell 180bps to 21.1%, reflecting lost manufacturing absorption related to the cyber incident as well as tariffs and increased interest expense, partially offset by our ongoing focus on operational excellence. - Management described the impact as highly variable by business line: Businesses supporting procedures that could be deferred or rescheduled such as Hips and Knees experience different timing effects compared to those supporting more urgent or non-deferrable procedures, such as trauma and vascular.
Crucially, management was explicit that demand, not the top-line miss, was the real signal: we did not see a pause in orders. We definitely had a pause in shipments because we obviously couldn't make product for almost 3 weeks... there's no way we'd be reaffirming our full year guidance if we suddenly felt there was some kind of slowdown in orders. The company also disclosed our best ever Q1 for Mako installations both in the U.S. and internationally, with high and increasing utilization rates across the globe, and Kevin Lobo noted the recovery effort actually strengthened customer relationships: if anything, they feel better about our resilience through this process. So I think the Stryker brand is stronger than ever.
Despite the Q1 miss, Stryker reaffirmed full-year 2026 guidance: organic sales growth of 8.0%–9.5% and adjusted EPS of $14.90–$15.10, with management flagging that the cadence of our sales momentum that occurs through the rest of the year is expected to reflect the catch-up of revenue recognition in Q2, while the rescheduling of certain delayed procedures and the fulfillment of customer orders impacted by production shutdowns will be delayed into the second half of the year.
1. Cadence of the cyber-related revenue recovery. Management guided that Q2 would capture much of the deferred revenue recognition (particularly in Orthopaedics, where product was implanted but not yet booked), while make-to-order MedSurg capital equipment (Medical, Endoscopy) recovery skews more to Q3/Q4. Watch whether Q2 organic growth actually approaches or exceeds the ~10.5% implied full-year run-rate, and whether commentary still points to further catch-up in H2 — that would confirm no demand was permanently lost. CFO Preston Wells noted: In limited cases involving emergent or non-elective care, we expect to offset any permanently lost sales through the strength of our continued commercial execution.
2. Margin trajectory. Q1 adjusted operating margin fell 180bps YoY on lost absorption and tariffs. Management maintained that full-year margin expectations were unchanged and that the long-term target — a minimum of 150 basis points of operating margin expansion over 2026–2028 — remains intact, an acceleration from the prior plan's ~30bps/year pace. Tariffs remain a headwind concentrated in H1 2026, so Q2 margin performance (and any updated tariff commentary) will be closely watched as a leading indicator of H2 flow-through.
3. Segment reporting under the new structure. Stryker recast its segments in Q1 2026, folding Mako/enabling technologies together with Orthopaedic Instruments into a new "Ortho Tech" business, and moving Neuro Cranial into Instruments. Watch for the first full quarter of clean comparisons under this structure, and whether Ortho Tech (which now carries Mako pull-through) shows the growth acceleration management has promised.
4. Product launch cadence. Several launches are set to be more meaningful in H2 2026 and into 2027: full Mako Shoulder availability on the Mako 4 platform (mid-2026), the handheld Mako RPS robotics system (early traction in ASCs), Pangea trauma system's recent European approval, Incompass Total Ankle pending PROPHECY guide clearance, and continued Triathlon Gold and LIFEPAK 35 ramps. Any updated timing here matters for the 2H acceleration thesis.
5. M&A/capital deployment. Stryker closed its acquisition of Amplitude Vascular Systems (AVS) in early May 2026, adding an intravascular lithotripsy platform to the Peripheral Vascular (Inari) franchise — management signaled this is a step toward building a broader cardiovascular presence and that more deals should follow, noting the company ended Q1 at ~2.1x gross debt/EBITDA with firepower to do more acquisitions and an expectation to be active in M&A going through the end of this year and into next year. Listen for updated Inari integration commentary (Q1 language suggested the difficult "Strykerization" of the sales force is largely behind them) and any new deal announcements.
6. Macro/geopolitical noise. Q1 flagged a modest Middle East conflict drag on international growth and incremental tariff-driven input cost inflation; management said they are "not seeing any GLP-1 impact whatsoever" on procedure volumes — worth reconfirming given ongoing investor sensitivity to that theme.
Stryker's setup into Q2 is unusual: a company with a strong multi-year track record (management has cited ~10% organic CAGR and double-digit adjusted EPS growth in recent years) coming off a rare, cyber-driven miss that it has characterized as a timing issue rather than a demand issue. The bar for Q2 is high — consensus already bakes in a sharp reacceleration to ~9% organic growth and low-double-digit EPS growth — so the market's focus will be less on the headline beat/miss and more on (1) whether the recovery cadence tracks management's script, (2) margin progress against the 150bps/3-year target, and (3) reaffirmation (or refinement) of full-year guidance of 8.0%–9.5% organic sales growth and $14.90–$15.10 adjusted EPS. A clean beat-and-raise, or even an in-line quarter with confident H2 commentary, would likely be read as validating the "no permanent share loss" narrative; another shortfall or cautious tone on margin recovery would reignite concerns that surfaced after the Q1 print.