Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ABOUT STRYKER

Stryker is a global leader in medical technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology, Orthopaedics and Spine that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually.

We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine. MedSurg and Neurotechnology products include surgical equipment and navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment and intensive care disposable products (Medical), minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke (Neurovascular), a comprehensive line of products for traditional brain and open skull based surgical procedures; orthobiologic and biosurgery products, including synthetic bone grafts and vertebral augmentation products (Neuro Cranial). Orthopaedics and Spine products consist primarily of implants used in hip and knee joint replacements and trauma and extremity surgeries, and cervical, thoracolumbar and interbody systems used in spinal injury, deformity and degenerative therapies.

Overview of the Three and Nine Months

In the three months 2024 we achieved sales growth of 11.9% from 2023. Excluding the impact of acquisitions and divestitures, sales grew 11.5% in constant currency. We reported operating income margin of 19.7%, net earnings of $834 and net earnings per diluted share of $2.16. Excluding the impact of certain items,

adjusted operating income margin(1) increased by 130 basis points to 24.7%, with adjusted net earnings(1) of $1,107 and adjusted net earnings per diluted share(1) of $2.87, an increase of 16.7% from 2023.

In the nine months 2024 we achieved sales growth of 10.1% from 2023. Excluding the impact of acquisitions and divestitures, sales grew 10.2% in constant currency. We reported operating income margin of 19.2%, net earnings of $2,447 and net earnings per diluted share of $6.35. Excluding the impact of certain items, adjusted operating income margin(1) increased by 70 basis points to 23.7%, with adjusted net earnings(1) of $3,154 and adjusted net earnings per diluted share(1) of $8.18, an increase of 14.6% from 2023.

Recent Developments

In the nine months 2024 we completed various acquisitions for total consideration of $1,598 in upfront payments, net of cash acquired, as well as $395 of contingent consideration if certain commercial or clinical milestones are achieved. Refer to Note 7 to our Consolidated Financial Statements for further information.

In September 2024 we issued $750 of 4.250% senior unsecured notes due September 11, 2029, €800 of 3.375% senior unsecured notes due September 11, 2032, $750 of 4.625% senior unsecured notes due September 11, 2034 and €600 of 3.625% senior unsecured notes due September 11, 2036. Refer to Note 8 to our Consolidated Financial Statements for further information.

(1) Refer to "Non-GAAP Financial Measures" for a discussion of non-GAAP financial measures used in this report and a reconciliation to the most directly comparable GAAP financial measure.

CONSOLIDATED RESULTS OF OPERATIONS
			Three Months																														Nine Months
															Percent Net Sales												Percentage																		Percent Net Sales												Percentage
			2024						2023						2024						2023						Change						2024						2023						2024						2023						Change
Net sales			$	5,494					$	4,909					100.0		%				100.0		%				11.9		%				$	16,159					$	14,683					100.0		%				100.0		%				10.1		%
Gross profit			3,517						3,158						64.0						64.3						11.4						10,266						9,355						63.5						63.7						9.7
Research, development and engineering expenses			377						353						6.9						7.2						6.8						1,108						1,038						6.9						7.1						6.7
Selling, general and administrative expenses			1,896						1,710						34.5						34.8						10.9						5,583						5,200						34.6						35.4						7.4
Amortization of intangible assets			159						164						2.9						3.3						(3.0)						467						486						2.9						3.3						(3.9)
Other income (expense), net			(42)						(62)						(0.8)						(1.3)						(32.3)						(144)						(184)						(0.9)						(1.3)						(21.7)
Income taxes			209						177						nm						nm						18.1						517						425						nm						nm						21.6
Net earnings			$	834					$	692					15.2		%				14.1		%				20.5		%				$	2,447					$	2,022					15.1		%				13.8		%				21.0		%
Net earnings per diluted share			$	2.16					$	1.80																	20.0		%				$	6.35					$	5.27																	20.5		%
Adjusted net earnings per diluted share**(1)**			$	2.87					$	2.46																	16.7		%				$	8.18					$	7.14																	14.6		%

nm - not meaningful

Geographic and Segment Net Sales			Three Months																					Nine Months
															Percentage Change																					Percentage Change
			2024						2023						As Reported			Constant Currency						2024						2023						As Reported			Constant Currency
Geographic:
United States			$	4,109					$	3,678					11.7		%	11.7		%				$	12,070					$	10,901					10.7		%	10.7		%
International			1,385						1,231						12.5			13.0						4,089						3,782						8.1			10.1
Total			$	5,494					$	4,909					11.9		%	12.0		%				$	16,159					$	14,683					10.1		%	10.6		%
Segment:
MedSurg and Neurotechnology			$	3,224					$	2,859					12.8		%	12.9		%				$	9,340					$	8,409					11.1		%	11.5		%
Orthopaedics and Spine			2,270						2,050						10.7			10.8						6,819						6,274						8.7			9.2
Total			$	5,494					$	4,909					11.9		%	12.0		%				$	16,159					$	14,683					10.1		%	10.6		%

Dollar amounts are in millions except per share amounts or as otherwise specified.			10

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

Supplemental Net Sales Growth Information
			Three Months																																				Nine Months
															Percentage Change																																				Percentage Change
																								United States						International																														United States						International
			2024						2023						As Reported			Constant Currency						As Reported						As Reported			Constant Currency						2024						2023						As Reported			Constant Currency						As Reported						As Reported			Constant Currency
MedSurg and Neurotechnology:
Instruments			$	679					$	620					9.6		%	9.5		%				9.9		%				8.3		%	7.8		%				$	2,044					$	1,808					13.1		%	13.3		%				13.9		%				9.7		%	10.9		%
Endoscopy			837						746						12.2			12.5						11.3						16.6			18.1						2,383						2,166						10.0			10.5						10.2						9.1			11.6
Medical			938						798						17.6			17.7						18.6						12.7			13.2						2,710						2,417						12.1			12.3						15.7						(2.9)			(1.8)
Neurovascular			329						311						5.5			5.9						1.5						8.1			8.6						966						906						6.6			8.3						2.2						9.4			12.4
Neuro Cranial			441						384						15.0			15.0						16.2						9.4			9.6						1,237						1,112						11.3			11.7						11.4						10.7			12.9
			$	3,224					$	2,859					12.8		%	12.9		%				13.3		%				10.9		%	11.4		%				$	9,340					$	8,409					11.1		%	11.5		%				12.4		%				6.7		%	8.7		%
Orthopaedics and Spine:
Knees			$	570					$	515					10.6		%	10.7		%				8.4		%				17.1		%	17.4		%				$	1,760					$	1,643					7.1		%	7.7		%				6.0		%				10.2		%	12.2		%
Hips			420						362						15.9			16.2						10.9						24.8			25.3						1,241						1,130						9.9			10.9						7.3						14.4			17.3
Trauma and Extremities			849						752						12.8			12.6						12.9						12.6			12.0						2,511						2,287						9.8			10.0						10.8						7.1			7.8
Spine			304						291						4.6			4.4						3.5						7.5			6.8						911						871						4.6			4.8						3.9						6.5			7.3
Other			127						130						(2.4)			0.1						(0.6)						(6.1)			1.3						396						343						15.4			17.8						17.4						11.2			18.6
			$	2,270					$	2,050					10.7		%	10.8		%				9.2		%				14.4		%	14.8		%				$	6,819					$	6,274					8.7		%	9.2		%				8.3		%				9.7		%	11.6		%
Total			$	5,494					$	4,909					11.9		%	12.0		%				11.7		%				12.5		%	13.0		%				$	16,159					$	14,683					10.1		%	10.6		%				10.7		%				8.1		%	10.1		%

Note: Beginning in the first quarter 2024, a product line previously included in Instruments has been reclassified to Endoscopy to align with a change in our internal reporting structure. We have reflected this change in all historical periods presented.

Consolidated Net Sales

Consolidated net sales increased 11.9% in the three months 2024 as reported and 12.0% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.1%. Excluding the 0.5% impact of acquisitions and divestitures, net sales in constant currency increased by 10.3% from increased unit volume and 1.2% due to higher prices. The unit volume increase was due to higher product shipments across all MedSurg and Neurotechnology businesses and most Orthopaedics and Spine businesses.

Consolidated net sales increased 10.1% in the nine months 2024 as reported and 10.6% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%. Excluding the 0.4% impact of acquisitions and divestitures, net sales in constant currency increased by 9.2% from increased unit volume and 1.0% due to higher prices. The unit volume increase was due to higher product shipments across all MedSurg and Neurotechnology and Orthopaedics and Spine businesses.

MedSurg and Neurotechnology Net Sales

MedSurg and Neurotechnology net sales increased 12.8% in the three months 2024 as reported and 12.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.1%. Excluding the 0.2% impact of acquisitions and divestitures, net sales in constant currency increased by 11.0% from increased unit volume and 1.7% from higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses.

MedSurg and Neurotechnology net sales increased 11.1% in the nine months 2024 as reported and 11.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.4%. Excluding the 0.2% impact of acquisitions and divestitures, net sales in constant currency increased by 9.6% from increased unit volume and 1.7% from higher prices. The unit

volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses.

Orthopaedics and Spine Net Sales

Orthopaedics and Spine net sales increased 10.7% in the three months 2024 as reported and 10.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.1%. Excluding the 1.1% impact of acquisitions and divestitures, net sales in constant currency increased 9.3% from increased unit volume and 0.4% from higher prices. The unit volume increase was due to higher shipments across most Orthopaedics and Spine businesses.

Orthopaedics and Spine net sales increased 8.7% in the nine months 2024 as reported and 9.2% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%. Excluding the 0.6% impact of acquisitions and divestitures, net sales in constant currency increased 8.6% from increased unit volume. The unit volume increase was due to higher shipments across all Orthopaedics and Spine businesses.

Gross Profit

Gross profit was $3,517 and $3,158 in the three months 2024 and 2023. The key components of the change were:

			Gross Profit Percent Net Sales
Three Months 2023			64.3		%
Sales pricing			40 bps
Volume and mix			60 bps
Manufacturing and supply chain costs			(90) bps
Structural optimization and other special charges			20 bps
Inventory stepped up to fair value			(60) bps
Three Months 2024			64.0		%

Gross profit as a percentage of net sales in the three months 2024 remained relatively flat with 2023.

Gross profit was $10,266 and $9,355 in the nine months 2024 and 2023. The key components of the change were:

Dollar amounts are in millions except per share amounts or as otherwise specified.			11

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

			Gross Profit Percent Net Sales
Nine Months 2023			63.7		%
Sales pricing			40 bps
Volume and mix			60 bps
Manufacturing and supply chain costs			(70) bps
Structural optimization and other special charges			(20) bps
Inventory stepped up to fair value			(30) bps
Nine Months 2024			63.5		%

Gross profit as a percentage of net sales in the nine months 2024 remained relatively flat with 2023.

While segment mix was not a significant driver of the change in gross profit as a percent of net sales between the three and nine months 2024 and 2023, we generally expect segment mix to have an unfavorable impact for the foreseeable future as we anticipate more rapid sales growth in our lower gross margin MedSurg and Neurotechnology segment than our Orthopaedics and Spine segment.

Research, Development and Engineering Expenses

Research, development and engineering expenses increased $24 or 6.8% in the three months 2024 and decreased as a percentage of net sales to 6.9% from 7.2% in 2023, primarily due to lower product launch costs.

Research, development and engineering expenses increased $70 or 6.7% in the nine months 2024 and decreased as a percentage of net sales to 6.9% from 7.1% in 2023, primarily due to lower spend on medical device regulations in the European Union.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $186 or 10.9% in the three months 2024. As a percentage of net sales, expenses decreased to 34.5% from 34.8% in 2023, primarily due to continued spend discipline that was partially offset by higher acquisition-related costs.

Selling, general and administrative expenses increased $383 or 7.4% in the nine months 2024 and decreased as a percentage of net sales to 34.6% from 35.4% in 2023, primarily due to continued spend discipline and lower charges for structural optimization and certain legal matters, offset by higher acquisition-related costs.

Amortization of Intangible Assets

Amortization of intangible assets was $159 and $164 in the three months and $467 and $486 in the nine months 2024 and 2023. Refer to Note 7 to our Consolidated Financial Statements for further information.

Operating Income

Operating income was $1,085 and $931 in the three months 2024 and 2023. Operating income as a percentage of net sales in the three months 2024 increased to 19.7% from 19.0% in 2023. Refer to the discussion above for the primary drivers of the change.

Operating income was $3,108 and $2,631 in the nine months 2024 and 2023. Operating income as a percentage of net sales in the nine months 2024 increased to 19.2% from 17.9% in 2023. Refer to the discussion above for the primary drivers of the change.

MedSurg and Neurotechnology operating income as a percentage of net sales decreased to 28.7% in the three months 2024 from 30.0% in 2023. Orthopaedics and Spine operating income as a percentage of net sales increased to 28.3% in the three months 2024 from 24.3% in 2023. The key components of

the change were:

			Operating Income Percent Net Sales
			MedSurg and Neurotechnology			Orthopaedics and Spine
Three Months 2023			30.0		%	24.3		%
Sales pricing			120 bps			30 bps
Volume			340 bps			530 bps
Manufacturing and supply chain costs			(310) bps			180 bps
Research, development and engineering expenses			(80) bps			(30) bps
Selling, general and administrative expenses			(200) bps			(310) bps
Three Months 2024			28.7		%	28.3		%

The decrease in MedSurg and Neurotechnology operating income as a percentage of net sales for the three months was primarily driven by higher manufacturing and supply chain costs and higher selling, general and administrative expenses partially offset by higher unit volumes and higher prices.

The increase in Orthopaedics and Spine operating income as a percentage of net sales for the three months was primarily driven by higher unit volumes and lower manufacturing and supply chain costs partially offset by higher selling, general and administrative expenses.

MedSurg and Neurotechnology operating income as a percentage of net sales increased to 27.7% in the nine months 2024 from 26.9% in 2023. Orthopaedics and Spine operating income as a percentage of net sales increased to 28.2% in the nine months 2024 from 27.1% in 2023. The key components of the change were:

			Operating Income Percent Net Sales
			MedSurg and Neurotechnology			Orthopaedics and Spine
Nine Months 2023			26.9		%	27.1		%
Sales pricing			130 bps			0 bps
Volume			320 bps			450 bps
Manufacturing and supply chain costs			(80) bps			(40) bps
Research, development and engineering expenses			(90) bps			(60) bps
Selling, general and administrative expenses			(200) bps			(240) bps
Nine Months 2024			27.7		%	28.2		%

The increase in MedSurg and Neurotechnology operating income as a percentage of net sales for the nine months was primarily driven by higher unit volumes and higher prices partially offset by higher selling, general and administrative expenses.

The increase in Orthopaedics and Spine operating income as a percentage of net sales for the nine months was primarily driven by higher sales volume partially offset by higher selling, general and administrative expenses.

Dollar amounts are in millions except per share amounts or as otherwise specified.			12

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

Other Income (Expense), Net

Other income (expense), net was ($42) and ($62) in the three months and ($144) and ($184) in the nine months 2024 and 2023. The decrease in net expense in the three and nine months 2024 compared to 2023 was primarily due to higher interest income in 2024.

Income Taxes

Our effective tax rates were 20.0% and 17.4% in the three and nine months 2024 and 20.4% and 17.4% in the three and nine months 2023. The effective tax rates for the three and nine months 2024 and 2023 reflect the continued lower effective income tax rates as a result of our European operations and certain discrete tax items. The Organisation for Economic Cooperation and Development (OECD), which represents a coalition of member countries, has put forth two proposed base erosion and profit shifting frameworks that revise the existing profit allocation and nexus rules (Pillar One) and ensure a minimal level of taxation (Pillar Two). On December 12, 2022 the European Union member states agreed to implement the Inclusive Framework’s global corporate minimum tax rate of 15%, and various countries within and outside the European Union have either enacted or proposed new tax laws implementing Pillar Two in 2024. The OECD continues to release additional guidance and we anticipate more countries will enact similar tax laws. Some of the new tax laws are effective in 2024 while others will be effective in future years. These tax law changes and any additional contemplated tax law changes could increase tax expense in future periods.

Net Earnings

Net earnings increased to $834 or $2.16 per diluted share in the three months 2024 from $692 or $1.80 per diluted share in 2023. Net earnings increased to $2,447 or $6.35 per diluted share in the nine months 2024 from $2,022 or $5.27 per diluted share in 2023. Refer to the discussion above for the primary drivers of the change.

Non-GAAP Financial Measures

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; adjusted selling, general and administrative expenses; adjusted research, development and engineering expenses; adjusted operating income; adjusted other income (expense), net; adjusted income taxes; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share (Diluted EPS). We believe these non-GAAP financial measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures. To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates, acquisitions and divestitures, which affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year and prior year results at the same foreign currency exchange rates excluding the impact of acquisitions and divestitures. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. The income tax effect of each adjustment was determined based on the tax effect of the jurisdiction in which the related pre-tax adjustment was recorded. These adjustments are irregular in timing and may not be indicative of our past and future performance. The following are examples of the types of adjustments that may be included in a period:

1.Acquisition and integration-related costs. Costs related to integrating recently acquired businesses (e.g., costs associated with the termination of sales relationships, employee retention and workforce reductions, manufacturing integration costs and other integration-related activities), changes in the fair value of contingent consideration, amortization of inventory stepped-up to fair value, specific costs (e.g., deal costs and costs associated with legal entity rationalization) related to the consummation of the acquisition process and legal entity rationalization and acquisition-related tax items.

2.Amortization of purchased intangible assets. Periodic amortization expense related to purchased intangible assets.

3.Structural optimization and other special charges. Costs associated with employee retention and workforce reductions, the closure or transfer of manufacturing and other facilities (e.g., site closure costs, contract termination costs and redundant employee costs during the work transfers), product line exits (primarily inventory, long-lived

Dollar amounts are in millions except per share amounts or as otherwise specified.			13

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

asset and specifically-identified intangible asset write-offs), certain long-lived and intangible asset write-offs and impairments and other charges.

4.Medical device regulations. Costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the new medical device reporting regulations and other requirements of the European Union.

5.Recall-related matters. Changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve the Rejuvenate, LFIT V40, Wright legacy hip products and other product recalls.

6.Regulatory and legal matters. Changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

7.Tax matters. Impact of accounting for certain significant and discrete tax items.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, research, development and engineering expenses, operating income, other income (expense), net, income taxes, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures at the end of the discussion of Consolidated Results of

Operations below. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The weighted-average diluted shares outstanding used in the calculation of adjusted net earnings per diluted share are the same as those used in the calculation of reported net earnings per diluted share for the respective period.

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2024			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	3,517		$	1,896		$	377		$	1,085		$	(42)		$	209		$	834		20.0		%	$	2.16
Reported percent net sales			64.0		%	34.5		%	6.9		%	19.7		%	(0.8)		%	nm			15.2		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			29			—			—			29			—			7			22			0.2			0.06
Other acquisition and integration-related (a)			—			(48)			—			48			—			11			37			0.3			0.10
Amortization of purchased intangible assets			—			—			—			159			—			32			127			0.7			0.32
Structural optimization and other special charges (b)			(2)			(26)			—			24			—			4			20			—			0.05
Medical device regulations (c)			—			—			(13)			13			—			2			11			0.1			0.03
Recall-related matters (d)			—			—			—			—			—			—			—			—			—
Regulatory and legal matters (e)			—			1			—			(1)			—			—			(1)			—			—
Tax matters (f)			—			—			—			—			—			(57)			57			(5.5)			0.15
Adjusted			$	3,544		$	1,823		$	364		$	1,357		$	(42)		$	208		$	1,107		15.8		%	$	2.87
Adjusted percent net sales			64.5		%	33.2		%	6.6		%	24.7		%	(0.8)		%	nm			20.1		%

Dollar amounts are in millions except per share amounts or as otherwise specified.			14

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

Three Months 2023			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	3,158		$	1,710		$	353		$	931		$	(62)		$	177		$	692		20.4		%	$	1.80
Reported percent net sales			64.3		%	34.8		%	7.2		%	19.0		%	(1.3)		%	nm			14.1		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			—			—			—			—			—			—			—			—			—
Other acquisition and integration-related (a)			—			1			—			(1)			—			(28)			27			(3.1)			0.07
Amortization of purchased intangible assets			—			—			—			164			—			36			128			1.6			0.34
Structural optimization and other special charges (b)			19			(9)			—			28			—			7			21			0.3			0.06
Medical device regulations (c)			1			—			(18)			19			—			4			15			0.2			0.04
Recall-related matters (d)			—			(9)			—			9			—			2			7			0.1			0.01
Regulatory and legal matters (e)			—			1			—			(1)			—			1			(2)			0.1			—
Tax matters (f)			—			—			—			—			1			(55)			56			(6.4)			0.14
Adjusted			$	3,178		$	1,694		$	335		$	1,149		$	(61)		$	144		$	944		13.2		%	$	2.46
Adjusted percent net sales			64.7		%	34.5		%	6.8		%	23.4		%	(1.2)		%	nm			19.2		%

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:

			Three Months
			2024						2023
Termination of sales relationships			$	—					$	2
Employee retention and workforce reductions			13						3
Changes in the fair value of contingent consideration			2						(4)
Manufacturing integration costs			1						—
Stock compensation payments upon a change in control			22						—
Other integration-related activities			10						(2)
Adjustments to Operating Income			$	48					$	(1)
Charges for acquisition-related tax provisions			—						(28)
Other income taxes related to acquisition and integration-related costs			11						—
Adjustments to Income Taxes			$	11					$	(28)
Adjustments to Net Earnings			$	37					$	27

(b) Structural optimization and other special charges represent the costs associated with:

			Three Months
			2024						2023
Employee retention and workforce reductions			$	12					$	(5)
Closure/transfer of manufacturing and other facilities			2						12
Product line exits			4						7
Certain long-lived and intangible asset write-offs and impairments			12						9
Termination of sales relationships in certain countries			6						—
Other charges			(12)						5
Adjustments to Operating Income			$	24					$	28
Adjustments to Income Taxes			$	4					$	7
Adjustments to Net Earnings			$	20					$	21

(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.

(d) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.

(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

(f) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:

			Three Months
			2024						2023
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions			$	(47)					$	(44)
Other tax matters			(10)						(11)
Adjustments to Income Taxes			$	(57)					$	(55)
Charges / benefits for certain tax audit settlements			—						1
Adjustments to Other Income (Expense), Net			$	—					$	1
Adjustments to Net Earnings			$	57					$	56

Dollar amounts are in millions except per share amounts or as otherwise specified.			15

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

Nine Months 2024			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	10,266		$	5,583		$	1,108		$	3,108		$	(144)		$	517		$	2,447		17.4		%	$	6.35
Reported percent net sales			63.5		%	34.6		%	6.9		%	19.2		%	(0.9)		%	nm			15.1		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			38			—			—			38			—			9			29			0.3			0.08
Other acquisition and integration-related (a)			—			(49)			—			49			—			14			35			0.2			0.09
Amortization of purchased intangible assets			—			—			—			467			—			96			371			1.0			0.96
Structural optimization and other special charges (b)			41			(72)			—			113			—			24			89			0.2			0.23
Medical device regulations (c)			5			—			(36)			41			—			9			32			0.1			0.08
Recall-related matters (d)			11			(11)			—			22			—			5			17			0.1			0.04
Regulatory and legal matters (e)			—			1			—			(1)			—			—			(1)			—			—
Tax matters (f)			—			—			—			—			(1)			(136)			135			(4.7)			0.35
Adjusted			$	10,361		$	5,452		$	1,072		$	3,837		$	(145)		$	538		$	3,154		14.6		%	$	8.18
Adjusted percent net sales			64.1		%	33.7		%	6.6		%	23.7		%	(0.9)		%	nm			19.5		%

Nine Months 2023			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	9,355		$	5,200		$	1,038		$	2,631		$	(184)		$	425		$	2,022		17.4		%	$	5.27
Reported percent net sales			63.7		%	35.4		%	7.1		%	17.9		%	(1.3)		%	nm			13.8		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			—			—			—			—			—			—			—			—			—
Other acquisition and integration-related (a)			—			(7)			—			7			—			(25)			32			(1.0)			0.08
Amortization of purchased intangible assets			—			—			—			486			—			104			382			1.5			1.00
Structural optimization and other special charges (b)			30			(112)			—			142			—			32			110			0.5			0.29
Medical device regulations (c)			1			—			(73)			74			—			17			57			0.3			0.15
Recall-related matters (d)			—			(12)			—			12			—			3			9			—			0.02
Regulatory and legal matters (e)			—			(19)			—			19			—			4			15			—			0.04
Tax matters (f)			—			—			—			—			(8)			(121)			113			(4.9)			0.29
Adjusted			$	9,386		$	5,050		$	965		$	3,371		$	(192)		$	439		$	2,740		13.8		%	$	7.14
Adjusted percent net sales			63.9		%	34.4		%	6.6		%	23.0		%	(1.3)		%	nm			18.7		%

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:

			Nine Months
			2024						2023
Termination of sales relationships			$	3					$	2
Employee retention and workforce reductions			17						3
Changes in the fair value of contingent consideration			(12)						(7)
Manufacturing integration costs			2						2
Stock compensation payments upon a change in control			22						—
Other integration-related activities			17						7
Adjustments to Operating Income			$	49					$	7
Charges for acquisition-related tax provisions			—						(28)
Other income taxes related to acquisition and integration-related costs			14						3
Adjustments to Income Taxes			$	14					$	(25)
Adjustments to Net Earnings			$	35					$	32

(b) Structural optimization and other special charges represent the costs associated with:

			Nine Months
			2024						2023
Employee retention and workforce reductions			$	14					$	63
Closure/transfer of manufacturing and other facilities			18						36
Product line exits			19						16
Certain long-lived and intangible asset write-offs and impairments			22						12
Termination of sales relationships in certain countries			7						—
Other charges			33						15
Adjustments to Operating Income			$	113					$	142
Adjustments to Income Taxes			$	24					$	32
Adjustments to Net Earnings			$	89					$	110

(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.

(d) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.

(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

Dollar amounts are in millions except per share amounts or as otherwise specified.			16

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

(f) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:

			Nine Months
			2024						2023
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions			$	(141)					$	(138)
Certain tax audit settlements			(2)						24
Other tax matters			7						(7)
Adjustments to Income Taxes			$	(136)					$	(121)
Charges / benefits for certain tax audit settlements			(1)						(9)
Other tax related adjustments			—						1
Adjustments to Other Income (Expense), Net			$	(1)					$	(8)
Adjustments to Net Earnings			$	135					$	113

FINANCIAL CONDITION AND LIQUIDITY

			Nine Months
Net cash provided by (used in):			2024						2023
Operating activities			$	2,311					$	2,183
Investing activities			(2,697)						(810)
Financing activities			1,269						(1,308)
Effect of exchange rate changes			(4)						(49)
Change in cash and cash equivalents			$	879					$	16

Operating Activities

Cash provided by operating activities was $2,311 and $2,183 in the nine months 2024 and 2023. The increase was primarily due to higher net earnings partially offset by the timing of payments and collections in working capital accounts.

Investing Activities

Cash used in investing activities was $2,697 and $810 in the nine months 2024 and 2023. The nine months 2024 included cash paid for various acquisitions and purchases of short-term investments partially offset by proceeds from the settlement of certain foreign currency forward contracts designated as net investment hedges. The nine months 2023 included cash paid for the Cerus acquisition. Refer to Notes 4 and 7 to our Consolidated Financial Statements for further information on derivative instruments and acquisitions.

Financing Activities

Cash provided by financing activities was $1,269 in the nine months 2024 and cash used in financing activities was $1,308 in the nine months 2023. In 2024, cash provided was primarily driven by proceeds from the issuance of various senior unsecured notes as described in Note 8 to our Consolidated Financial Statements. This was partially offset by the repayment of maturing senior unsecured notes, dividend payments and cash paid for taxes on withheld shares. Cash used in 2023 was primarily driven by dividend payments, repayment of the term loan used to fund the acquisition of Vocera and cash paid for taxes on withheld shares, partially offset by proceeds from the issuance of €500 of floating rate senior notes.

We did not repurchase any shares in the nine months 2024 and 2023.

Liquidity

Cash, cash equivalents, short-term investments and marketable securities were $4,684 and $3,053 on September 30, 2024 and December 31, 2023. Current assets exceeded current liabilities by $7,004 and $4,597 on September 30, 2024 and December 31, 2023. We anticipate being able to support our short-term liquidity and operating needs from a variety of sources including cash from operations, commercial paper and existing credit lines.

We have raised funds in the capital markets and have accessed the credit markets in the past and may continue to do so from time-to-time. We continue to have strong investment-grade short-term and long-term debt ratings that we believe should enable us to refinance our debt as needed.

Our cash, cash equivalents, short-term investments and marketable securities held in locations outside the United States was 14% on September 30, 2024 compared to 25% on December 31, 2023.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for 2023, except as follows.

We test goodwill annually for impairment at October 31 or whenever events or circumstances indicate that goodwill may be impaired. When it is unlikely that goodwill of a reporting unit is impaired, we perform a qualitative assessment that may be periodically supplemented with a corroborative quantitative analysis.

During 2022 we recognized a goodwill impairment charge of $216 for the Spine reporting unit. Due to the impairment charge in 2022, we performed a quantitative impairment test for our Spine reporting unit at October 31, 2023 and determined that its fair value exceeded its carrying amount by 10% and no additional impairment charges were recorded.

The Spine business’s operating results continue to be affected by inflationary pressures and the competitive environment. These inputs were included in the updated projections used in our annual long-range financial plan, which was approved during the third quarter 2024. Additionally, it is likely we will reorganize our Spine reporting unit during the fourth quarter 2024 to separate the spine enabling technologies portfolio (Enabling Technologies) from the spinal implant portfolio (Core Spine). While changes in reporting units are accounted for on a prospective basis, they may be an indicator that goodwill of a reporting unit is potentially impaired. As a result of these factors, we performed a quantitative impairment test of the Spine reporting unit at September 30, 2024. The outcome of the impairment test was that the fair value of the Spine reporting unit exceeded its carrying amount by 9% and we did not record any impairment charges during the quarter ended September 30, 2024. Goodwill attributable to the Spine reporting unit was approximately $1.0 billion at September 30, 2024.

In our quantitative impairment test, the fair value of the Spine reporting unit was determined using a discounted cash flow analysis, which is a form of the income approach. Significant inputs to the analysis included assumptions for future revenue growth, operating margin and the rate used to discount the estimated future cash flows to their present value based on the reporting unit’s estimated weighted average cost of capital. Our assumptions for revenue growth and operating margin considered several operating factors, including surgery volumes, increased costs and our competitive environment. We believe our estimates are appropriate based upon current and anticipated future market conditions and the best information available at the impairment assessment date. However, future impairment charges could be required if our Spine reporting unit does not

Dollar amounts are in millions except per share amounts or as otherwise specified.			17

STRYKER CORPORATION						2024 Third Quarter Form 10-Q

achieve its cash flow, revenue and profitability projections or if there is an increase in the weighted average cost of capital.

The assumptions used in the discounted cash flow analysis are subject to inherent uncertainties and subjectivity. The use of different assumptions, estimates or judgments with respect to the estimation of future cash flows and the determination of the discount rate used to reduce such estimated future cash flows to their net present value could materially affect the determination of any impairment charges. Hypothetical changes in our estimates of the discount rate, long-term revenue growth and long-term operating margin would result in impairment charges as follows:

Change in selected assumption			Percentage decline in fair value			Impairment charge
100 bps increase in discount rate			16		%	$	150
100 bps decrease in long-term revenue growth			11			50
100 bps decrease in long-term operating margin			6			—

During the fourth quarter 2024, it is likely we will reorganize certain of our reporting units, including the Spine reporting unit. Upon a reorganization of our reporting units, the assets (including goodwill) and liabilities will be reassigned to the new reporting units and we will perform a goodwill impairment test immediately before and after the reorganization. We estimate that approximately $265 of goodwill will be assigned to the Core Spine reporting unit upon a reorganization and we expect that a material portion of this balance could be impaired.

Historical impairment assessments for our other reporting units have indicated that their implied fair values exceed their respective carrying amounts by at least 100%. We have not identified any factors in 2024 that would lead us to believe that those reporting units are at risk of a goodwill impairment.

New Accounting Pronouncements Not Yet Adopted

Refer to Note 1 to our Consolidated Financial Statements for information.

Guarantees and Other Off-Balance Sheet Arrangements

We do not have guarantees or other off-balance sheet financing arrangements, including variable interest entities, of a magnitude that we believe could have a material impact on our financial condition or liquidity.

OTHER MATTERS

Legal and Regulatory Matters

We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of our business, including proceedings related to product, labor, intellectual property and other matters. Refer to Note 6 to our Consolidated Financial Statements for further information.

FORWARD-LOOKING STATEMENTS

This report contains statements that are not historical facts and are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current projections about operations, industry conditions, financial condition and liquidity. Words that identify forward-looking statements include, without limitation, words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," "goal," "strategy" and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or our businesses. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any

underlying assumptions, are forward-looking statements. Those statements are not guarantees and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from these forward-looking statements, historical experience or our present expectations. Some important factors that could cause our actual results to differ from our expectations in any forward-looking statements include the risks discussed in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for 2023. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and accompanying notes to our Consolidated Financial Statements in our Annual Report on Form 10-K for 2023. While we believe that the assumptions underlying such forward-looking statements are reasonable, there can be no assurance that future events or developments will not cause such statements to be inaccurate. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement. We expressly disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.