Report date: July 30, 2026, after the close
Conference call: 4:30 p.m. ET
Central question: Did Stryker recover enough of the first-quarter cyber disruption to preserve its full-year growth and margin plan?
Stryker enters Q2 with an unusually wide gap between its underlying business momentum and its reported year-to-date results.
The March cyberattack disrupted manufacturing, shipping and revenue recognition late in Q1. Consequently, first-quarter organic sales grew only 2.4%, adjusted operating margin contracted 180 basis points to 21.1%, and adjusted EPS declined 8.5% to $2.60. Nevertheless, management maintained its 2026 outlook for 8.0%-9.5% organic sales growth and $14.90-$15.10 of adjusted EPS, arguing that most of the affected revenue should be recovered during the remainder of the year. (sec.gov)
Q2 is therefore less about a conventional quarterly beat and more about validating that recovery thesis. The best result would combine:
Published estimates vary slightly by provider:
| Metric | Q2 consensus | Q2 2025 | Implied growth |
|---|---|---|---|
| Revenue | $6.56-$6.58B | $6.02B | Approximately 9% |
| Adjusted EPS | $3.46-$3.49 | $3.13 | Approximately 11% |
| FY2026 revenue | $27.22B | $25.12B | 8.4% |
| FY2026 adjusted EPS | $14.98 | $13.63 | 9.9% |
Zacks' current estimates are $6.56 billion of revenue and $3.46 of adjusted EPS, while MarketBeat shows $6.58 billion and $3.49. The full-year EPS consensus is essentially at the midpoint of Stryker's $14.90-$15.10 guidance range. (stage.zacks.com)
That creates an important asymmetry: simply reaffirming guidance may be sufficient operationally, but it may not constitute a positive earnings catalyst unless the quarterly recovery is convincing.
Management previously divided the disruption into three broad categories:
This distinction matters. A strong Q2 driven primarily by accounting catch-up is less valuable than one that also demonstrates normal underlying demand. Investors should look for management to quantify, or at least characterize:
At a May investor conference, management said it was on track with its Q2 plan and comfortable with then-current consensus. It also said orders continued to outpace shipments and that the capital backlog was still building. That raises the bar against a merely acceptable quarter.
Reported revenue near consensus would represent approximately 9% growth, but the organic figure and its composition will be more informative.
A high-quality result would show:
The first-quarter comparison was heavily distorted: organic growth was only 0.9% in MedSurg and Neurotechnology and 4.1% in Orthopaedics. Q2 should look much closer to Stryker's normal high-single- to low-double-digit profile. If consolidated organic growth remains materially below the full-year range, the burden placed on Q3 and Q4 would become uncomfortable.
Q1 adjusted gross margin fell 190 basis points to 63.6%, reflecting lost manufacturing absorption and tariffs. Adjusted operating margin declined to 21.1% from 22.9%.
Q2 faces a demanding comparison: adjusted operating margin was 25.7% in Q2 2025. Investors should not necessarily require full year-over-year expansion, given lingering absorption costs and tariffs, but the margin should recover sharply from Q1.
Key questions include:
A revenue beat accompanied by weak incremental margins would be lower quality because it could indicate that the recovery is proving more expensive than anticipated.
The current guide calls for:
Because Q1 adjusted EPS was only $2.60, consensus assumes a substantial acceleration over the final three quarters. Reaffirming the guide is therefore necessary, but the language around it will matter.
The strongest message would be that Stryker remains positioned for the upper half of both ranges while retaining upside from tariff relief or stronger-than-expected recovery. A technically unchanged guide accompanied by repeated references to second-half timing would be less reassuring.
Orthopaedics should recover faster than some MedSurg capital businesses because much of its inventory is consigned at customer sites. Q1 also featured record Mako installations despite the disruption.
Areas to watch:
Stryker moved Mako RPS from limited release to a full U.S. commercial launch on July 16. That timing means little direct Q2 revenue contribution, but commentary on orders, trials and customer conversion could influence second-half expectations. The system targets surgeons and sites that want robotic assistance with a more familiar handheld workflow, potentially broadening Mako's addressable market. (stryker.com)
Investor interpretation: Strong Knee growth plus elevated Mako placements would support the view that robotics continues to drive implant share gains. Weak implant growth despite record installations would raise questions about utilization or competitive response.
Endoscopy and Medical are the businesses most likely to remain affected by the interruption because they contain more made-to-order capital equipment. Management has added production shifts in areas such as hospital beds, but some recovery was always expected in Q3 and Q4 rather than Q2.
Watch for:
A growing backlog is positive for demand but negative if it reflects continued inability to ship. Ideally, Stryker will report both healthy orders and improving backlog conversion.
Vascular remained one of Stryker's fastest-growing businesses in Q1. Management has indicated that the initial commercial disruption following the Inari acquisition—particularly sales-force attrition—is largely behind it.
Investors should focus on:
Stryker completed the AVS acquisition on May 7 for approximately $435 million upfront plus as much as $400 million in milestones. AVS is developing an intravascular lithotripsy platform, so the near-term focus is likely regulatory and pipeline progress rather than material Q2 sales.
Stryker ended Q1 with approximately $2.9 billion of cash and marketable securities and roughly $14.7 billion of debt after repaying $1 billion of notes. The company continues to characterize M&A as its first use of capital.
Relevant questions include:
Cash from operations was $581 million in Q1, but the quarter included unusual working-capital effects. First-half cash flow and inventory levels should help determine whether the recovery is translating into cash rather than merely reported revenue.
SYK closed July 29 at approximately $351, roughly flat year to date but more than 20% above its early-May low. At current consensus, the stock trades around:
That valuation is below where a fully de-risked, consistently compounding Stryker can trade, but it is not distressed. The recent rebound suggests investors already expect a meaningful Q2 recovery. A modest beat with unchanged guidance may therefore produce a muted reaction; a miss or another recovery delay would likely be treated more harshly.
Q2 is a credibility quarter. Stryker does not need to recover every dollar affected by the cyberattack immediately, but it needs to demonstrate that the disruption was temporary, the operating system is functioning normally, and the remaining recovery can occur without sacrificing margins or overloading Q4.
The most important number may not be the headline EPS. It will be the combination of organic growth, adjusted operating margin and management's description of what remains to be recovered. If those three elements are strong, the long-term case—above-market growth driven by Mako, Trauma, Vascular, capital equipment and disciplined M&A—should reassert itself. If they are weak, investors will question whether the 2026 guidance is a realistic operating plan or simply a back-end-loaded target.