Philip Chickering

Philip Chickering asked for quantification of the Stelara impact in Q4 2025 to model gross profit growth excluding this factor. He also inquired about the expected acute and chronic growth rates for 2026 and whether margins, excluding Stelara, would change compared to prior years.

Answer

EVP and CFO Meenal Sethna confirmed that the Stelara headwind in Q4 2025 was in line with expectations, around $20 million, impacting gross profit by over 100 basis points. President and CEO John Rademacher projected mid-single-digit growth for acute therapies and high single-digit to low double-digit growth for chronic therapies in 2026, despite Stelara headwinds. He noted that profit contributions for acute therapies are expected to be consistent, but a faster growth in chronic therapies might put some pressure on overall gross margin percentage.

Philip Chickering requested quantification of the Stelara impact in Q4 2025 to model gross profit growth excluding this factor. He also asked for the 2026 growth outlook for acute and chronic therapies and whether segment margins, excluding Stelara, are expected to change from prior years.

Answer

EVP and CFO Meenal Sethna confirmed that the Stelara headwind in Q4 2025 patterned as expected, with approximately a $20 million impact, representing over a 100 basis point impact to gross profit. President and CEO John Rademacher projected mid-single-digit growth for acute therapies and high single-digit to low double-digit growth for chronic therapies in 2026, despite Stelara headwinds. He noted that profit contributions for acute therapies are expected to be consistent, but the faster growth of chronic therapies will put some pressure on the overall gross margin percentage.

Philip Chickering asked if the strong ortho growth in Q3 was due to core market share gains or a pull-forward of demand related to healthcare exchange uncertainties. He also inquired about hospital feedback regarding CapEx plans amidst uncertainties.

Answer

Kevin Lobo (Chair and CEO, Stryker) stated that the ortho growth is seen as core market growth, not a pull-forward, driven by robust demand and Stryker's faster-than-market growth. He noted that surgeons do not express anxiety about a falloff in procedures. Jason Beach (VP of Finance and Investor Relations, Stryker) added that hospitals view Stryker's capital equipment as 'moneymakers' and that the CapEx environment remains strong, especially for smaller capital tied to procedures. Kevin Lobo further emphasized that hospitals have budgets and plans for capital purchases, with orders rarely canceled.

Philip Chickering asked if the strong ortho growth was due to core market share gains or a pull-forward of demand from healthcare exchange uncertainties. He also inquired about hospital CapEx feedback regarding uncertainties for next year.

Answer

Kevin Lobo, Chair and Chief Executive Officer, viewed the ortho growth as core market share gains, not pull-forward demand, driven by robust rates and outperforming the market. Jason Beach, Vice President of Finance and Investor Relations, and Kevin Lobo stated that the hospital CapEx environment remains strong, with hospitals having budgets and plans to purchase Stryker's capital equipment, which are rarely canceled, despite external uncertainties.