Welcome to the fourth quarter and full year 2025 Stryker Earnings Call. My name is Layla, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Following the conference, we will conduct a question-and-answer session. This conference call is being recorded for replay purposes. Before we begin, I would like to remind you that the discussions during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. Also, the discussions will include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8-K filed today with the SEC. I will now turn the call over to Mr. Kevin Lobo, Chair and Chief Executive Officer. You may proceed, sir. Welcome to Stryker's fourth quarter earnings call. Joining me today are Preston Wells, Stryker's CFO, and Jason Beach, Vice President of Finance and Investor Relations. For today's call, I'll provide opening comments, followed by Jason with the trends we saw during the quarter and some product updates. Preston will then provide additional details regarding our results and guidance before opening the call to Q&A. Our 2025 results were outstanding for both Q4 and the full year across all key financial metrics. Against double-digit comparisons from the prior year, organic sales growth was 11% for Q4 and 10.3% for the full year, surpassing $25 billion in sales. Globally, for the full year, our Neurocranial, Endoscopy, Instruments, and Trauma and Extremities businesses all delivered double-digit organic sales growth, demonstrating continued robust demand across our product portfolio. Full-year U.S. organic sales growth was an impressive 11.2%, and international organic sales growth was 7.5%. International results were led by strong performances in our emerging markets, South Korea, and Japan. These countries and our other international markets continue to represent significant growth opportunities for us, and we look forward to launching products internationally that have already demonstrated success in the United States. We also had excellent earnings and cash flow performance in 2025. While managing tariff headwinds, our teams delivered a second consecutive year of at least 100 basis points of adjusted operating margin expansion. This performance demonstrates strong operational execution and earnings power that we have been building up over time. Preston will cover cash flow, which was also a standout for us in 2025. Overall, our financial results reflect the durability of our high-growth offense with the following structural components: exceptional talent and culture, active M&A, a steady cadence of product launches, and systematic specialization by creating new business units and splitting sales forces. The new SmartCare business unit within medical combines Vocera and care.ai, and we have split multiple sales forces in the past two years. One example is the new Breast Care sales force within Endoscopy that launched at the beginning of 2025 and has contributed to their terrific growth. We have momentum entering 2026 and expect to continue delivering growth at the high end of MedTech, which is reflected in our full-year 2026 guidance. Our financial position remains strong, providing firepower to execute on M&A in 2026. I would like to thank our teams for another terrific year fueled by their commitment to our mission and unwavering dedication to our customers. With that, I'll now turn the call over to Jason. Thanks, Kevin. My comments today will focus on providing an update on the current environment as well as a few other highlights. Procedural volumes remain healthy in the fourth quarter, and we continue to expect the markets will remain strong in 2026, underscored by the continued adoption of robotic-assisted surgery, favorable demographics, and durable demand for our capital products. Our U.S. capital-related businesses delivered robust performance in the quarter, helping to drive double-digit organic sales growth for Q4 in our Instruments, medical, and Endoscopy divisions. Hospital CapEx budgets remain healthy, and our capital order book continues to be elevated as we enter 2026. Next, powered by Mako 4, we delivered a stunning quarter and year of Mako installations with yet another record quarter both in the U.S. and worldwide. Our install base now includes more than 3,000 Mako systems worldwide. Alongside our record number of installations, we also continue to see steady increases in utilization, bolstering our number-one position in U.S. knees and hips. As we exited the year, over 2/3 of our knees and over 1/3 of our hips were performed on Mako in the U.S. Globally, utilization rates were approximately 50% for knees and over 20% for hips. We have significant momentum heading into 2026 and continue to receive very positive feedback on the latest Mako applications, including advanced primary with revision hip, spine, as well as shoulder, which will launch on Mako 4 mid-year. Finally, Inari, which is now known as our peripheral vascular business, had a strong finish to the year, highlighted by robust procedural growth in the high teens that was partially offset by the stocking, which will be minimal in Q1. We are set up for success in 2026 as the business approaches its one-year anniversary as a part of Stryker. As a reminder, Peripheral Vascular is reported as part of our vascular division results. With that, I will now turn the call over to Preston. Thanks, Jason. Today, I will focus my comments on fourth quarter financial results and the related drivers. Our detailed financial results have been provided in today's press release. Organic sales growth was 11% for the quarter compared to 10.2% in the fourth quarter of 2024, with the same number of selling days in both periods. Pricing had a slightly favorable impact, and additionally, foreign currency had a 1% favorable impact on sales. For the full year, our organic sales growth was 10.3% against a strong comparable of 10.2% in 2024. The impact from price was favorable by 0.4%, while foreign currency had a 0.5% favorable impact and 2025 had one fewer selling day than 2024. Our fourth quarter adjusted earnings per share of $4.47 was up 11.5% from the same quarter last year, driven by sales growth and operating margin expansion, partially offset by tariffs, higher interest expense, and a higher effective tax rate. Foreign currency translation had an unfavorable impact of $0.02. Our full-year adjusted earnings per share of $13.63 was up 11.8% from 2024, driven by our outstanding sales growth and a return to pre-COVID adjusted operating margins with a second consecutive year of at least 100 basis points of expansion. Our margin expansion included improvements in gross margin from business mix and cost improvements despite the impact of tariffs. For the year, foreign currency translation had a favorable impact of $0.01. Now I will provide some highlights around our quarterly segment performance. In the quarter, MedSurg and Neurotechnology had an exceptional organic sales growth of 12.6%, including U.S. Organic growth of 13% and international organic growth of 10.9%. Instruments had U.S. organic sales growth of 19.1%, with high teens growth from both our Orthopaedic Instruments and Surgical Technologies businesses. Performance was fueled by strong capital demand in power tools, Steri-Shield, smoke evacuation, and Neptune waste management. Endoscopy had U.S. organic sales growth of 11.1%, led by robust double-digit performances from our Sustainability and Sports Medicine businesses and high single-digit growth from our core Endoscopy portfolio. We continue to see strong demand for our Sports Medicine shoulder products and 1788 Platform. Medical had U.S. organic sales growth of 13.6% that included strong double-digit performances in Acute Care and Sage businesses. From a product perspective, Medical's fourth quarter growth was driven by LIFEPAK 35, ProCuity, Vocera, and Sage products. We do not expect the supply constraints we experienced in 2025 to negatively impact growth rates in 2026. Vascular had U.S. organic sales growth of 4.3%, reflecting a strong double-digit performance in our hemorrhagic business that was powered by the recent launch of our Surpass Elite flow-diverting stent. This performance was offset by competitive pressures in our ischemic business. As a reminder, Vascular's organic sales growth figures do not include our peripheral vascular business. And finally, Neurocranial had U.S. organic sales growth of 9.9%, led by an outstanding double-digit performance in our IVS business and near double-digit performance from our Craniomaxillofacial business. Internationally, MedSurg and Neurotechnology's organic sales growth was 10.9%, led by double-digit growth in our Endoscopy and Neurocranial businesses. Geographically, a slower capital environment in Europe during the quarter was offset by robust demand in other international markets, including very strong performances in Australia and New Zealand, our emerging markets, and South Korea. Orthopaedics had organic sales growth of 8.4%, including U.S. organic growth of 9.6% and international organic growth of 5.4%. Our U.S. knee business grew 7.6% organically, reflecting our market-leading position in robotic-assisted knee procedures and continued momentum from recent Mako installations. Our U.S. hips business grew 5.6% organically, highlighted by the enduring success of our Insignia hip stem and continuing adoption of our Mako robotic hip platform with expanded ability to address more difficult primary hip cases as well as hip revisions. Our U.S. Trauma and Extremities business grew 8.5% organically in the quarter, led by double-digit growth in our upper extremities business as our multi-year strong shoulder growth trajectory continued throughout the year. Additionally, our core trauma business had solid high single-digit growth against a very high prior year comparable. Core trauma's performance continues to be driven by Pangea, our differentiated plating portfolio, as well as our market-leading position in nailing. Our U.S. Other ortho business grew 28.7% organically, driven by robust installations in the quarter, led by momentum from the successful launch of Mako 4 in the U.S. Internationally, Orthopaedics had an organic growth of 5.4% against a double-digit comparable in the prior prior year. Growth was led by strong performances in Canada and many of our emerging markets. As a reminder, our international results include a nominal amount of spinal implant revenue because of previously accepted tenders that we are fulfilling before exiting those markets. Now I will focus on certain operating and non-operating highlights in the fourth quarter. Our adjusted gross margin of 65.2% was 10 basis points lower than the fourth quarter of 2024, reflecting the impact of tariffs that were mostly offset by business mix and cost improvements as we continue to optimize our supply chain and manufacturing processes. Our adjusted operating margin was 30.2% of sales, which was 100 basis points favorable to the fourth quarter of 2024, driven by lower adjusted SG&A as a percentage of sales, primarily due to our ongoing focus on operational excellence and margin expansion. Adjusted other income and expense of $107 million for the quarter was $56 million higher than 2024 due to increased interest expense from debt issuances early in the year and lower interest income. For 2026, we expect our full-year other income and expense to be approximately $420 million. The fourth quarter had an adjusted effective tax rate of 16.1%, reflecting the impact of geographic mix and certain discrete tax items. For 2026, we expect our full-year effective tax rate to be in the range of 15%-16%. Turning to cash flow, our year-to-date cash from operations was $5 billion, an increase of $802 million from 2024 that was primarily driven by higher earnings and year-over-year working capital improvements. As a result, we delivered free cash flow as a percentage of adjusted net earnings this year of 81% compared to 75% last year. Consistent with the long-range plan we presented at our investor day, we will continue to target a range of 70%-80% for free cash flow as a percentage of adjusted net earnings. Now I will provide full-year 2026 guidance. Given our strong exit from 2025, our presence in healthy end markets, sustained procedural volumes, and strong demand for our capital products, we expect 2026 organic net sales growth to be in the range of 8%-9.5% and adjusted net earnings per share to be in the range of $14.90-$15.10. Our full-year 2026 sales guidance includes a modestly positive impact from price. Additionally, if foreign exchange rates hold near year-to-date levels, we anticipate a slightly favorable impact on both sales and adjusted earnings per share. Compared to 2025, we will have the same number of selling days in each quarter during 2026. Finally, we expect the seasonality of our sales to be similar to 2025. In addition, we expect full-year tariff impacts to be approximately $400 million, which includes an incremental $200 million compared to 2025 that will be realized in the first half of the year. With that, I will now open up the call for Q&A. At this time, we will open the floor for questions. If you would like to ask a question, please press star five on your telephone keypad. You may remove yourself at any time by pressing star five again. We would like to remind callers to please limit themselves to one question and one follow-up question so we can accommodate as many participants as possible. We'll pause just a moment. Okay, our first question will come from Larry Biegelsen with Wells Fargo. Your line is now open. Please go ahead. Good afternoon. Thanks for taking the question and congratulations on a really strong end to the year and a strong 2025. Kevin, you're guiding to 8%-9.5% organic growth for 2026 versus 8%-9% to start last year. What's giving you the confidence to start this year slightly higher? And at the investor day in November, you seemed to believe it was possible to grow in 2026 10% given the market conditions at the time. Is that still the case? I had one follow-up. Thanks, Larry. As you saw, this is our fourth consecutive year of double-digit organic sales growth. At some point, you start to think maybe the comparatives will catch up to us. But given the order book, given the strength of the Mako performance we had in the fourth quarter, which of course then contributes to implant growth in the future, we really feel more positive, I'd say modestly more positive this year than we did one year ago, which gives us the confidence to start the year with that range, a little wider range, but a little on the higher end. And as I said at this call a year ago, 10% is certainly possible, but it does depend on a lot of things that are in the macro environment, procedure growth. But we do have a strong order book. We do feel good about procedures and certainly possible that we could do a fifth year in a row. That's helpful. And for my follow-up, Kevin, you elevated Spencer Stiles to president and chief operating officer in December. It's not the first time Stryker has had a president. I think Tim Scannell had that role until 2021. So can you please talk about why this was the right time for this change, what it means for Stryker, and perhaps what it means for you going forward? Thanks for taking the question. Yeah, yeah, thanks, Larry. As you know, we did it before. I think Spencer clearly is ready for a challenge. He's been a group president for some time now. It provides him really a tremendous platform to lead our global commercial organization. It also enables a cascade of other promotions, including Dylan Crotty, to head up Orthopaedics and then a ripple down throughout the organization. This is really a great chance for our fantastic leaders to assume more responsibility. I look forward to partnering with Spencer to lead the company as we continue to grow. $25 billion in sales and clearly with momentum behind us does enable us to have additional leaders running large businesses. Your next question will come from Robert Marcus with JP Morgan. Your line is now open. Please go ahead. Oh, great. Thanks for taking the questions. I'll add my congratulations on a nice quarter too for me. Maybe to build on Larry's question on just sort of the confidence going forward, clearly the capital equipment market ended on a really strong year in 2025. Kevin, how are you thinking about pricing both for your capital business and your implant business in 2026 and your expectations for the capital environment in 2026, U.S. and outside the U.S.? And then I have a follow-up. Yeah, hey, Robbie, just on the pricing piece of it, we've talked about pricing before. It's something that we certainly have been focused on the last few years. And I think you've seen that reflected in our price gains that we've been able to deliver over the last couple of years. And now, as we see the numbers, we're building price gains on top of price gains from before. And so we expect that to be something that continues into next year, just given the muscle that we've developed and the focus that we have. So if we think about 2026, we expect 2026 to look pretty similar from a price standpoint to 2025. Hey, Robbie, it's Jason. Just as it relates to kind of the overall capital environment, I mean, you said it well. We had a strong finish to the year if you think about our capital businesses. And then if you just consider similar to what I said in some of my prepared remarks, from an elevated backlog perspective, the environment's pretty good. And so we feel really good about the capital environment as we go into 2026. Great. Maybe looking at the quarter, there were a couple businesses that did particularly well. You mentioned Mako. The other number was particularly strong, as was Endoscopy and Instruments. And one that stood out on the opposite side or two, Trauma and Extremities and Vascular. I was hoping you could just give us a little more color, what happened there, is there stocking, destocking, and just a little more? Appreciate it. Thanks. Hey, well, that was a lot of questions, Robbie. So let me just say on the positive side, Endoscopy and Instruments and Mako were absolutely on fire at the end of the year. I mean, instruments included power tools as well as the products Preston mentioned in his remarks. Endoscopy was a really amazing performance if you think sports and Sustainability did well, but the camera is a few years into its launch. And unlike prior years, if you look at our prior launches, our growth would start to wane a little bit. Our camera is just phenomenal with fluorescence imaging, and we're continuing to sell that very, very well. And Mako was this transition to Mako 4 has been incredible. This is the first time we've had a change of the actual robot to a new robot since we bought Mako. To be honest, coming into the year, I wasn't sure how this new transition would go, and the team has done a phenomenal job. The extra application certainly helps. The feedback has been terrific. On the other side of the fence, I mean, I am still extremely bullish on Trauma and Extremities. We had a monster comp from the prior year because Pangea was really gaining steam. And we still don't have Pangea in Europe and some other markets. Shoulder continues to be on fire. Our foot and ankle business was a bit soft this year, and we are now launching a new total ankle called Incompass with much better reimbursement from CMS, which is pretty exciting. We won't see much of that impact in first quarter, but starting in second quarter, that'll start to really kick in. So I don't feel in any way, shape, or form as if that business is slowing down. It's just a question of comps. And over the course of the year, you're going to see them have another really strong year in 2026. On the vascular side, I think we commented that the ischemic sector has been tough for us. It's not just in the fourth quarter. That's been going on for the last couple of years. We did launch a new large bore catheter called Broadway. It's a 0.084 lumen. That was a big gap in our portfolio. That feedback has been very positive, but it's the early days of that launch in the U.S. And then we'll be launching that around the world. So I think over time, that'll start to improve somewhat. But our hemorrhagic business continues to be very strong. We are now the largest neurovascular player in the marketplace. We took over leadership roughly about a year ago and have continued to be the largest player. Your next question will come from Joanne Wuensch with Citi. Your line is now open. Please go ahead. Good afternoon, and thank you for the quarter. There's a number of bits and pieces of the competitive landscape that's changing for you, and I'd love to get some commentary or thoughts. The number being bought by Boston Scientific, J&J announcing the spinout of their ortho business. How do you think about either those moves specifically or just sort of generally on how the landscape may or may not be changing? Hey, Joanne, it's Jason. I'll take a run at this, but I would say first off, in terms of our strategy and how we go to market, absolutely no change. We have tremendous teams on both of those businesses and certainly like our chances here in 2026. Okay. My second question, not quite a follow-up, is there's a fair amount of concern about patient volumes sort of with changes in the Affordable Care Act coverage. Is there anything that you can comment on that or what you're seeing or what you expect for patient volumes throughout the year? Thank you. Yeah, Joanne, it's Jason again. What I would say is, as we ended the year and certainly starting off 2026, volumes continue to be robust. Tough to speculate, obviously, as you go into later in the year, but we continue to believe, as you think about the ortho markets, these are going to be mid-single-digit growing markets, and we're going to outperform the markets in 2026 just like we did last year. Your next question will come from Ryan Zimmerman with BTIG. Thank you. Let me echo the congratulations on the quarter of the year. This may be a little in the weeds, but there was actually a local coverage determination this morning around total joint arthroplasty and robotics, I think specifically with CGS. It wasn't very impactful, but it would appear to me that there's been some efforts to get incremental reimbursement for the use of robotics. I could be wrong in that assumption. In the response, some of the MACs argued that the evidence may not be sufficient to warrant this. I'm curious if you have any thoughts about what's going on here, whether this does create any risk in your view from payers, or alternatively, an opportunity to get incremental reimbursement for robotic usage, specifically for specific robotic systems in the market in Orthopaedics. Well, I'm not familiar with that particular case that you're citing, but what I can say is in other parts of the world, there is extra reimbursement for robotic procedures, whether it's in Japan or in other markets around the world. We have examples where we do get extra reimbursement. And we love the opportunity for that. In fact, in Australia, there are studies that have shown that Mako outperforms other robotic systems as well as navigation, as well as manual. So it kind of stands on its own in Australian data that has been peer-reviewed and published. So we love our chances of being able to demonstrate that data. We've been in the market for long enough now that the data is starting to come out and would support potentially extra reimbursements. I can't imagine or don't foresee any reduction in reimbursement. Certainly, you can see with the uptake of robotics and over 2/3 of our knees being done robotically, surgeons aren't going to be going backwards. It's only going to continue. Yeah. Okay. Fair enough, Kevin. I'll maybe zoom out a little bit then on operating margins and turn this to Preston. 150 basis points, I think, through 2028 was the target, Preston, at the analyst day not too long ago. As you sit here today, just given the performance that we have seen, how would you characterize that trajectory? How would you characterize your confidence to achieve that? I think if I look at kind of where numbers are, that was kind of in the range of possibilities. I think we are still kind of left wondering kind of the pace at which you may have achieved those targets. Thank you. Yeah, Ron, good question. So as we think about it, the confidence is the same. We gave you that guide for the next three years because we believe very much in the ability to go out and achieve it based on the activities and actions that we have going on internally, focused on operational excellence, particularly with areas like lean and other elements with regards to shared services and things of that nature. But when we think about what we gave you for 2026 here, we gave you a lot of the different pieces in terms of our overall growth and what we expect from an EPS standpoint. I think if you plug that in, you'll see it's a healthy margin that we're planning for 2026 that really leads you down that path for that expectation of delivering 150 and above potentially as we go through the next three years. Your next question will come from Travis Steed with Bank of America. Hey, congrats on a good quarter. I wanted to focus on MedSurg, kind of bigger picture. If you put the numbers against all the markets in med-tech, your MedSurg business actually is probably one of the fastest-growing MedTech markets at the moment. And just curious, what's driving that growth? How do you have the confidence to keep doing that longer term? It's just surprising how good the growth is in that MedSurg business. Yeah, I kind of alluded to some of that in my prepared remarks. And I think it's something that's not fully understood. First, it starts off with our tremendous market shares. So we have incredibly high market shares across our MedSurg portfolio, very strong position. We are constantly upgrading these products, launching next generations of each of these products. And then we fill in little acquisitions that are very fast-growing. If you remember acquisitions like NICO, that just continues to fuel extra growth of our NS business and on and on. And then we specialize sales forces and split sales forces continually. A couple of examples. We split our CMF sales force a couple of years ago into an oral maxillofacial sales force and a neuro sales force. We split our Sage sales force into an infection sales force and an injury sales force. And I can go on and on. We created a separate sales force for law enforcement within our emergency care business. So we don't talk about all these publicly for competitive reasons, but this is part of the offense: we bring those constant innovations, add in little tuck-in acquisitions, split sales forces, and then that just fuels continual growth. And we already have a number of sales force splits that we're contemplating for the next couple of years. We had the, if you think about the Vertos deal, that enabled us to add specialized pain salespeople because today the IVS business sells to interventional oncologists as well as pain docs. So that's really part of the formula, secret sauce, if you will. High market shares, continual internal innovation, constant tuck-ins, which enable us sometimes to even create separate business units. If you recall, we split surgical a while ago back in 2019, 2020 into Orthopaedic Instruments and Surgical Technologies. Surgical Technologies crossed $1 billion this year. It just would have never happened if we had not split the business units. Those are the kind of things we do in MedSurg, and it's totally continually sustainable. As you look over the last 5, 6, 7 years, this is our offense, and we expect that to continue going forward. That's helpful. And Kevin, how do you think about tuck-ins in 2026 or maybe a chunkier tuck-ins? And then Preston, how do you think about protecting margins with potential deals in 2026? Yeah, we have really a strong balance sheet right now. And so we're on offense right now looking at deals. The deal pipeline is very healthy with tuck-ins and even looking at other adjacencies as we always do. So we're excited about the potential to do acquisitions in 2026, but I'm not going to say more than that right now. Yeah, Travis, from a tuck-in standpoint, we've generally said that for tuck-in type deals, those are elements that we try to build into our margin expectations. As we do each of these deals, certainly it's something that we would communicate back to you all in terms of what our expectations are. Your next question will come from Vijay Kumar with Evercore ISI. Your line is now open. Hey, guys. Thank you for taking my question. Congrats on a nice sprint here. Kevin, maybe one on innovation for you. I think in the past, you've spoken about product supercycles. What are you excited about when you look at 2026? It feels like some of these supercycles were probably in second or third year. So what is incremental? What are you excited about? Yeah, thanks, Vijay. I'd say, look, there's a ton of innovation always going on in this company. And even if you think of something like ProCuity, that's in its whatever, third or fourth year, but it still beds our long-term cycle. That still behaves like a new product in our hands because it's just a long buying cycle. But we have a number of other exciting launches. We have the Mako RPS, the handheld robot. Initial cases started this month. They're going extremely well. That's a brand new segment for us between our manual power tools and Mako. We have the Vocera Sync Badge that launched towards the latter part of last year, which is getting tremendous feedback. We have all kinds of OptaBlate BVN and IVS, the Incompass Total Ankle, which I talked about. We have Artix, which is a new arterial product within Inari. I can go on and on. I could go on for another 10 minutes, but there aren't right now. This, let's say, the new power tool, the new camera. Those are sort of flagship products in the past that we would always focus on. But the reality is, as we become much more diversified, even those launches become a little bit less important to the overall company as the split of CMF is driving CMF to double-digit growth. And all these other tuck-ins like a NICO and all these little products contribute to really high growth. And then when you have those other new bigger platforms launched, that gives you just an extra jolt. But the fact that Endoscopy posted these kind of numbers with a camera that's almost three-four years into its cycle is really impressive. Of course, we do have 1788 in development, and you'll be hearing about that at the right time. But I would tell you, I feel great about the health of our R&D pipelines across the company. Yeah, that's helpful, Kevin. Maybe one follow-up on Inari. You did bring up some destocking. Just talk about visibility on what gives us the confidence, destocking, or any sales force disruption that perhaps impacted numbers here in Q4. Yeah, Vijay, it's Jason. As it relates to the sales disruption, I would tell you we're beyond that at this point. I even made the comment in my prepared remarks as it relates to destocking. Minimal in Q1. I will tell you, Q4, we had a little bit more destocking than maybe we anticipated. But good visibility as we move into 2026, knowing it'll be minimal in Q1. Then obviously, we start to get to organic growth rates as you get into late Q1 into Q2. Your next question will come from Matthew O'Brien with Piper Sandler. Thanks so much for taking the questions. I'd love to double-click a little bit on the Mako commentary, just given how strong it was. If you wouldn't mind talking a little bit about the U.S./OUS strength on the record placement side. And is it fair to think after a period of trialing with some competitive systems that it's kind of over in terms of some of that trialing or even thoughts about using something outside of Mako and that you guys are winning a disproportionate number of these RFPs? And I guess what I'm really trying to get at is the durability of your implant strength, which has been great for several years. And then I do have a follow-up. Yeah, thanks. Listen, Mako 4 has been an absolute home run. We already felt like we had the best robot on the market, and we've just only added to that with these additional applications. The feedback on revision hip, one surgeon actually told me he thought it was a cheat code for revisions. Those were his words. It just makes a very hard procedure very easy to do, providing tremendous value to the surgeon. So these extra applications make it totally compelling, a great investment for a hospital. I think we're in obviously a clear leading position. And there's still a lot of hospitals that only have one Mako, and they're starting to add more and more and more. I think we're up to 30%-40% now have more than one Mako, but every operating room for us is an opportunity for a Mako to be installed. We have clearly the wind at our backs on that. We're seeing it start to take off in international markets, Japan being the most important one where it took a while, first of all, to get the regulatory approval. They're obviously very data conscious there. But now Japan is really starting to take off. In fact, even other countries in Asia-Pacific are starting to really drive the incremental growth. We're very bullish on this. I think the shoulder is going to be really exciting when we bring that to the market. Our limited launch has been on the Mako 3 robot, but so that's why we're staying in a limited mode because we really want to get that on the Mako 4 robot, which again will be sometime in the middle of the year. Obviously, the shoulder business continues to grow exceptionally well without Mako. Again, hard procedure to do. Every time the harder the procedure is, the more Mako brings value. We're in the pole position, and we're going to continue to press our lead. Thanks for that. And then you mentioned RPS. Kevin, why go with an X-ray for the imaging versus CT, which has been so successful with traditional Mako? And how do we frame up how big that could be for you guys between ASCs, international, etc.? Thanks. Yeah, look, this is a really great solution for some surgeons that aren't ready to go through the change management of Mako. Mako requires a lot of change for the surgeon as well as for the staff. And if you think about this handheld, it really is very simple, very easy to use, doesn't require the surgeon to go through that type of transition. This launch is just for total knee. So if you want a robot that can do multiple applications, obviously, that's not possible with this. But if you think about in the ASC, some surgeons not wanting the complexity of Mako, I think it's just going to open up new customers for us that weren't ready for Mako, but want something better than using the manual Instruments and have the visualization. We're using the intellectual property from Mako to provide some haptic boundaries, and the feedback has been incredible. From the surgeons using it, this is easy to use. It provides tremendous value. I do believe this will be an extra accelerator for our knee business and something that will live between Mako as well as our manual Instruments. It will be sold by the same sales force that sells Mako. That positioning, it's really about meet the surgeons where they are and provide the value that they're looking for. Right now, we understand our customers very well, and we believe there is a home for this. It's under the Mako name, so you can believe we feel very good about the performance. We would never want to tarnish the performance of the Mako brand. We know this product can sing. Your next question will come from David Roman with Goldman Sachs. Thank you. Good afternoon, everybody. I wanted to maybe at the analyst meeting, you introduced, I think in video form, the form factor for a handheld version of Mako that I think you had planned to provide more details on over the course of this year. Maybe any latest thinking on your robotic strategy from a portfolio standpoint as you roll out Mako 4 and any updates you can provide on the handheld instrumentation? Yeah, I think I just mentioned that we've started cases on the handheld. They're going very well. It will be on display at Academy. So it'll be in the booth. You'll be able to see it. You'll be able to talk to our people about it. That's the coming out party for Mako RPS will be AAOS. It's not very far from now. So I'd say just stay tuned. You'll get the chance to really see it in full color. Okay. Maybe just a follow-up. As Spencer moves into the role as president and CEO, I think you kind of talked about this in Larry's question. But as he takes on perhaps more of some of the day-to-day operational responsibilities, Kevin, are there priorities where you can now allocate more time or that might require more of your focus, whether that's on the strategy, M&A, or long-term growth side of the business? Yeah. Obviously, when you have somebody in this role that can handle the overall commercial part of the business, it allows me, frankly, to spend more time with our operations team, spend more time with our, we have a brand new leader for information technology and AI. I really want to make sure we are an AI-forward company. We've done a terrific job on AI for customer solutions, but we really haven't made a lot of progress yet on productivity with AI. We've done a great job on lean and a much better job on inventory, but there's a lot of work we can do to drive productivity in AI. And I can now spend a bit more of my time engaging in those other parts of the business that in the past would sort of the gravitational pull would be towards the commercial size of the business. So I'm excited about the division of labor that we're going to have in this job and the freedom that it'll afford me to spend on these other areas. Of course, looking at adjacencies, BD will always be a big part of my job. But having Spencer involved in that as well will be terrific for when he's running Ortho Group, his head is down running ortho. For him to be able to have a little bit more bandwidth there together with me, I think will be excellent for Stryker. Your next question will come from Caitlin Roberts with Canaccord Genuity. Hi. Thanks so much for taking the questions and congrats on a great quarter. As you end the year, any update on the percentage of hips, knees, shoulders flowing through the ASC channel for you guys? Yeah, Caitlin, it's Jason. As you know, we did not disclose that in our prepared remarks. I think we've said recently that hips and knees are kind of in the high teens, and we've ticked up quarter after quarter in that environment. So very happy with the ASC performance. Great. And then just some more color on Triathlon Gold and if that has launched already? Yes, Triathlon Gold is in limited launch right now. Feedback is extremely positive. You can do it both cemented and cementless, which is a huge draw for surgeons. As you know, so many of our knees are now cementless. That percentage of cementless continues to grow. The ability to do both is really tremendous. That will also be on display at AAOS. You'll be able to see that and be able to interact with our people as they can explain that product to you. But we are extremely pleased with the design. Again, it's a limited launch. We always like when these implant launches; we tend to want to have a limited launch for the number of surgeons, make sure everything's going smoothly with the instrumentation and the actual performance. But so far, so good. This should be a winner for us. Your next question will come from Matt Miksic with Barclays. Hey, thanks so much for taking the question and congrats on a really, really impressive performance, everybody. So one on kind of growth and one on margins for Preston, if I could. So on the growth side, I was hoping you could maybe talk a little bit about the differences in the way the growth drivers in the U.S. and the growth drivers OUS. Obviously, U.S., you've got a bigger contribution of ASCs and maybe robots are making different kinds of contributions, different part of the life cycle in U.S. versus OUS. And then maybe just as part of that, I get the question sometimes about the recurring nature of your business. Some of the, I don't know if you've ever carved it out and talked about it, but there's clearly parts of the business rollout being one of them where it's a recurring model. Any color you can give us as to how big or important or where the strengths are there. As I mentioned, one quick follow-up for Preston. Thanks. Sure. I'll start with that question. The dynamics internationally are not different than the United States. We have premium products that we sell through specialized sales forces. The reason that we're experiencing higher growth in the U.S. right now versus these markets primarily is because of the timing of launches. So we get these approvals early in the U.S.. Europe, in particular, with EU MDR has been extremely frustrating, and it's taking us Insignia, Pangea. These LIFEPAK just got approved. These products aren't yet on the market, and they're really important products. And then Mako has taken longer for us to really get that going. And that's not unusual where these international markets tend to want to wait to see more data before they'll start to grow. But aside of the last two years, we had about five years in a row where international was growing faster than the U.S.. We've now stepped up our U.S. growth rate really significantly, but the opportunity in international is significant. And as these products do reach these markets, you should expect to see a pretty similar dynamic as to what you see in the United States. Now, obviously, pricing and margins can vary by country, some being as good as the U.S., some being a little less. But we don't see the growth opportunity being really much different outside the U.S. than it is in the United States. Matt, I'll take that. Can you get the recurring? Yeah, Matt, I'll take that. No, no problem. This is Jason. I think the way I would characterize that, and you've heard us kind of say this in the past, is 25%-ish of our revenue is capital-related. And of that split, 15% of the capital is more closely tied to procedure, so the smaller capital. And then the 10% revenue, the larger capital, so booms, lights, beds, etc. And then kind of that 75%, I would say, procedurally driven, whether it's recurring and disposables, the implants, etc. Got it. Thank you. And then for Preston, just there's a couple of questions on margins, but the one that we often wonder at this point in the year is, if you've got a range for the top line and a chance to beat the top end of the range, how should we think about the flex in the model if and possibly when you break through the higher end of the range? Thinking about OpEx investment versus drops to the bottom line. Thanks. Yeah, absolutely. So we have a range on the top, as you said. And certainly, as we deliver that, if we're able to deliver towards the top end of that range, it does drop some additional margin or additional profits down. But also remember, there's some costs that come with that in terms of obviously tariffs are fluctuating with our business, and then also just the investment that it takes for us to put back in to have those growth rates. So it's something that we balance as we look at the entirety of our P&L and obviously with both the growth rates, but then funding for future growth rates as well when we look at what we drop down from a margin standpoint. But I think you could look at this year as a good example, right? So we moved up our top line this year. We also moved up our bottom line this year. So that could be a good proxy for you to see that if we start moving the top line up, we're not going to just reinvest all of it. There will be an amount that we drop through. If we see some opportunities, we're always looking to sort of self-fund reinvestment. But this is a good—you could look at 2025 as a good proxy for what hopefully will happen in 2026. Your next question will come from Chris Pasquale with Nephron Research. Thanks. Then one on pricing and then one on Inari. So the pricing benefit you reported for MedSurg this quarter, I think, was the smallest we've seen since 2022. Was there anything sort of quirky about this quarter that drove that? And since MedSurg has been the primary driver of the net positive pricing across the broader business, are you expecting to see that go back up here as we go into 2026? Yeah. There was one deal in particular outside the U.S. that drove some negative pricing on the MedSurg side. But overall, the fundamentals still remain the same. And we would expect to continue to see a pretty steady cadence of price coming from that business in 2026. Okay. That's helpful. And then on Inari and the clinical pipeline there, we saw one competitor's pulmonary embolism trial read out back at TCT. We're going to see another one at ACC in late March. ClinicalTrials.gov right now has PEERLESS II wrapping up this year. Is that still accurate? And when should we expect to see your data? Hey, Chris, it's Jason. No, it's actually going to be closer to middle of next year in terms of results. Your next question will come from Danielle Antalffy with UBS. Hey, good afternoon, guys. Thanks so much for taking the question. Congrats on a really strong 2025. Just following up on, excuse me, Chris's question on pricing, just at a higher level, so I know you guys had talked about, broadly speaking, that you saw over the last two years, starting you're expecting that to wane. It sounds like that's reflected in guidance. But I'm just curious about how you're seeing potentially your hospital customers, ASC customers. Are they changing the way they're contracting at all or on price? I'm just curious because obviously one of the narratives is with ACA subsidies expiring, hospitals could be more constrained from a budget perspective. And as we move further away from the change in purchasing patterns during COVID. Thanks so much. Yeah, Danielle, thanks for the question. In terms of price, I mean, price has always been something that's been a negotiation in terms of where we've been trying to gain price. And it's something that we, quite frankly, have gotten better at as we've talked about over the last few years. And certainly, as we look at contracting, that's an element of where we've really improved over the last few years. And so I think our ability to go out and make sure that we are working those contracts appropriately across our entire book of business has really helped us in terms of that pricing element. And we expect that to continue into 2026. And as you said, it is built into what our expectations are from a top line and guidance standpoint. Yeah, I think overall, for the full year, you should expect a pricing result that's not that different than what we had in 2025. From quarter to quarter, it may move a little bit, but we expect something pretty similar in 2026 as we experience in 2025. Okay. Thank you. Your next question will come from Patrick Wood with Morgan Stanley. Beautiful. Thanks so much for the question. ASCs, obviously, we've all talked about hips and knees a fair bit, but CMS moved to the back end of last year to really delete all the rest of the inpatient-only list. It seems kind of clear where the direction is going. From your perspective, what are the implications for that, if any, with an Endoscopy and everything else? Is your share in some of these categories high enough that it's like, "Hey, it's just a change of site of care," or is this a marginal change that actually matters to the business? Yeah, I think you answered it well. Our high market share is just a new site for us. But I think what really can help us is, again, if they're to have new construction of ASCs, it just gives us, if new procedures are added and start being done in ASCs, procedures where we have implants, that only helps us to provide a more full offering to the ASC. We already have the broadest offering by far in the industry, which is why we win at a very high rate, new construction and big rebuilds of ASCs. So the more procedures that go, the more that we provide that full service. And they need financing for their capital equipment in these ASCs, unlike hospitals that have the capital balance sheets to be able to provide to buy capital. So we look forward to this change as things move to the ASC, which I think will continue. Clearly, you can see CMS is pushing it. We've seen this trend happening. Our sports business tends to be a big beneficiary, and they had an absolutely phenomenal year. Again, they continue to grow extremely well and benefit from this push to the ASC because if they're doing Orthopaedics, hips and knees, they always do sports as well. And they tend to be a big part of these contracts. So we look forward to the change of procedures moving to the ASC. And I think it only helps Stryker just given the breadth of our portfolio. That's great. And then just very quickly on the M&A side of things. If I remember correctly, when you guys did Inari, you sort of referenced it as part of maybe a launchpad or something to that degree. It was clear that that channel on vascular in general was something you wanted to continue to build out. Is that still the case? Would you look at things like calcium management and other things that are sort of ancillary to that? Is that still a key focus area or not so much? Yeah. Listen, whenever we buy a business that enters a space, we never are one and done. We're going to continue to build all around that business and fortify the PV business. And obviously, that links to a broader vascular set of customers that once we start to get to know a customer, we want to help solve their problems. So yes, that's now part of our acquisition set that previously wasn't the case. And then same thing with HIT. So we did Vocera, then we did care.ai. Don't be surprised if we do more acquisitions in the health IT space. So we're constantly on the hunt. Every time we buy something, it opens up new windows for us. And we are definitely looking at the broad universe in that vascular world. Your next question will come from Mike Matson with Needham & Company. Yeah. Thanks for taking my questions. Just a couple more on Mako. So with Mako 4, are you getting a pricing increase relative to the older version? And then similar question with, as you start to launch Mako Shoulder and Spine, are there—I seem to remember you talking about some upgrade fees the customer would have to pay even if they have an existing Mako system that they want to add that capability to. And are these things that could become meaningful drivers for that part of the business? Yeah. Listen, we're not going to get into pricing for competitive reasons. We're not going to disclose our pricing, at least for the base robot. But every time you have extra applications, you have to pay a software fee or license, if you will, to be able to use the new software. So if they buy the Mako 4 for knees and hips, but then they want to add shoulder, then there is a charge for that, a one-time charge upon the installation of that software. That's been consistent throughout our Mako approach. Okay. Got it. And then just on the tariff impact, the $200 million this year, last year, you said you would fully absorb that. Is that the case again this year? And is there any ability to mitigate any of the impact that the $200 million? Can that come down over time with mitigation efforts? Thanks. Yeah. So what you see with that 200 really is the net result of mitigation activities that we've been taking for the past year as this whole tariff item has really come to bear over the last year. So that is reflective of the annualization, really, of all the work and activity that's been done. And as you'll look at our guidance that we gave, you can see when you do the work around the margin pieces of it that we have, in fact, built that into our expectations. Yeah. A total of $400 million, and we're still driving margin expansion. We drove a significant amount this year, but $200 million. We've got another $200 million. And you'll do the math through your models. You'll see we're going to drive meaningful margin expense in the face of this extra $200 million. So our margin muscle is really good. This is not something I could have said seven, eight years ago. I think if we had had this level of tariffs, you would not be seeing us continue to drive expansion to the level that we are. So we have built some earnings power in our company. Your next question will come from Shagun Singh with RBC. Great. Thank you so much. One on Mako, you guys shared some metrics, 2/3, 1/3 of knees and hips on Mako, and then utilization rate, 50% and 20% respectively. Where do you think these metrics go over time, and what are the key drivers there? And then as we think about market penetration of recon robotics, anything you can share with respect to where we stand from a procedure and then a capital placement standpoint? Thank you for taking the question. Well, as it relates to robotics, I don't think there's any limit. I think robotics can become standard of care at some point in time. It's not like cementless, where I don't think cementless knees will get to 100 because of bone quality. In the case of robotics, I don't see a limit to how much can be done. And we're over 2/3 in the U.S. and over 1/3. And what I like is I see the hip starting to inflect upwards. So with the launch of Mako 4, the new software, it's called the 5.0 software for hip, which is really amazing for revisions. But once the surgeon starts to do it for revisions, they start to realize it could be very good for primaries also. So very bullish on that potential. Is there a second question, Shagun? No. Okay. Thank you. Your next question will come from Richard Newitter with Truist. Hi. Thanks for taking the question. I just wanted to go back to the price comments. I hear you loud and clear, Kevin. Your overall price assumption is not dramatically different from last year for 2026. But just within the components, I just want to kind of reconcile with some comments I think I've heard you make in the past between MedSurg and Ortho. And just tell me, if you can, if this is directionally correct. But my understanding was that MedSurg is over the long-range plan, I would presume in 2026 as well, about positive 100-200 basis points. And then your Ortho I think has tended to be in the - 1% to - 2% range. And maybe that's a little bit more towards the - 2% part of that range. Then you net those two out, and you're somewhere similar-ish to last year. Is that the right way to think about it? Sorry to get so specific, but I think it would be helpful to investors. Yeah. Look, I'm not going to be that specific. I think your outer ranges are probably a little bit high on both sides, on both the implant side as well as the MedSurg side. But MedSurg will be positive. The Orthopaedics will be slightly negative. And the two will net to something similar to what we experienced this year going forward. I'm not excited or worried at all about our price. We have a really good offense. We understand what happens quarter by quarter. We feel like we're in a pretty stable pricing environment. And keep in mind, these are just like-for-like products, right? So this does not include when we launch a new product, we obviously launch at a higher price. And those products don't show up in price for at least another year until at anniversaries. So I just want to make sure you remember that as well. Got it. And then maybe just on Triathlon Gold, this sounds like a pretty interesting incremental opportunity for you to kind of gain back some share in an area where you just didn't have a product. Could you just quantify kind of what percentage of the market this potentially just gives you re-access to and how we should think about that and if that's the right way to think about it? Yeah. Look, it's an important product that is actually premium priced versus a standard implant. It's roughly 5% of the market, but we didn't have an offering. So we would have Stryker loyal surgeons that would actually switch to a competitor to be able to do this if they had a metal-sensitive patient. And frankly, what my hope is, given that you can do this cementless, and if the product performs really well, that 5% might actually grow. It's not just for metal sensitivities. This is, let's call it, an advanced bearing implant. So I'm not going to promise that, but there is the potential for this to continue to grow and grow the market beyond 5% of the total implants. It's really a wonderful product. The feedback so far has been very positive. But it's roughly 5%. We were not playing at all. Stryker surgeons were not using our product. This was an important gap in our portfolio that we've now filled. Your next question will come from Jeff Johnson with Baird. Thank you. Good evening, guys. Preston, just one follow-up question. You pointed in your prepared remarks to softer capital environment in Europe. Could you flesh that out a little bit, number one? And number two, Kevin, you pointed to some of the challenges of the MDR stuff in Europe. Obviously, that's not new for you guys. Did that have any impact on the MedSurg business in Europe? And with the new proposals to simplify some of that MDR stuff, I know they're not going to vote on it in Europe until later this year, but could that accelerate some of your product approvals there? Thanks. Yeah. I'll take the second part of the question on EU MDR. Yeah, we're really excited. Europe has woken up to the reality that they are stunting innovation and not giving patients access to products in a timely manner. They, in many ways, overreacted to a couple of safety issues that had occurred in Europe. So we welcome the changes, and that will help us accelerate the launch of our products. It's frankly a little bit even more important on the implant side than it is on MedSurg side, with products like Insignia and Pangea taking longer to get to the market. But it affects the entire portfolio, not just for us, but for the entire industry. Yeah. Jeff, it's Jason on the capital environment in Europe. I'm not going to get overly specific here, but what I would say, like our capital businesses in the U.S., there are some quarter-to-quarter where you get ups and downs in the capital business just based on purchasing cycles. So as we move into 2026, look, the order book here is healthy, and I think we'll have a good 2026 there in Europe. Your next question will come from Matt Blackman with TD Cowen. Hi everyone. It's Drew Ranieri on for Matt. Just a couple of questions, one for Kevin and one for Preston. Kevin, you brought up the Breast Care opportunity. Now that you have a specialized sales force, can you just talk about what that might mean for the endo business? Are you going to be able to push more through your installed base, or is this about utilization? Yeah. So first of all, the Breast Care. Yeah. Thanks. First of all, the Breast Care sales force is within our Endoscopy business. So we were already calling on them, but we didn't have a focus. And the acquisition of MOLLI, the marker, in addition to NOVADAQ, the exoscope, in addition to the tissue from NOVADAQ, in addition to the Invuity retractors. The Invuity was bought by our Instruments business, but we moved it over to Endoscopy because it's absolutely perfect for those procedures, breast reconstruction procedures. So a combination of acquired products and obviously our internal products within Endoscopy created enough of a basket to have a dedicated sales force. It was really successful in year one. And yes, we look to continue to expand within Breast Care. We could potentially do additional acquisitions to fill out the bag, continue to add more specialized salespeople. But this is what we do at Stryker. We did this in GI. If you recall, when we launched Neptune S, we created a GI sales force. We did the acquisition of The POM, the mask, procedural specific mask as well to add into that sales force. We do this all the time in our MedSurg businesses. It's part of the fuel for growth. And that's why we stay so high in our growth rates is we just don't sit still. We either bring in these tuck-in acquisitions, cobble them together, create a specialized sales force. And then at some point, if we do a big enough deal, we could create a separate business unit as we've done with SmartCare and as we've done with other business units in the past. Thanks. And appreciate that. And maybe Preston on the free cash flow, really great growth this year. I hear you on the conversion range, but can you just maybe talk about what you're expecting for CapEx? It was flat year-over-year. Expecting in 2026? Like a holdback on spending. Yeah. For 2026, what you're expecting more for free cash flow and CapEx? Yeah. So from a free cash flow standpoint, as I said before, I mean, we're still going to target in that same range of 70-80. That's been the range that we've been targeting for the last few years. We feel like that's a good place for us where we can balance investment with also obviously being more productive from a cash perspective. When it comes to capital, I mean, really, our capital focus is around how do we support growth? So whether that's investments we're making in our plants or obviously investments we're making in our IT systems for infrastructure as well in terms of how we're running our businesses. So there's really no change in our overall approach that we're thinking about from a cash flow standpoint. We are looking at how do we improve areas like working capital, which give us even more flexibility from a cash standpoint as we move forward. Your next question will come from Jayson Bedford with Raymond James. Jayson? Jayson, your line is open. Please feel free to proceed. Well, we have no further questions after Jayson, so I'll now hand the call over to Kevin Lobo for closing remarks. Thank you all for joining our call. As you can see, we have strong momentum entering 2026, and we look forward to sharing our first quarter results with you in April. Thank you. This concludes the fourth quarter and full year 2025 Stryker earnings call. You may now disconnect.