By the numbers
Q2 revenue: $5.42 billion
8.5% increase year over year
Net income: $825 million
11.8% increase year over year
Stryker set another record in the second quarter for installations of its Mako orthopedic robot, ahead of two planned launches of spine and shoulder features later this year.
“As you’ve seen, quarter after quarter, our Mako installations are very high. That leads to future strong demand for hips and knees,” Stryker CEO Kevin Lobo told investors on Tuesday.
This is the third quarter in a row where management has noted record installations, BTIG analyst Ryan Zimmerman said in a research note.
The results drove more than 14% sales growth in Stryker’s “other orthopedics” segment to $136 million.
Stryker also announced on Tuesday that it received FDA clearance for new software for its Q Guidance System for spine surgeries. The technology provides auditory and sensory alerts when a surgeon approaches planned anatomical boundaries during a procedure. It also includes a feature called Copilot, which stops automatically when it reaches a planned depth during a surgery, to help with screw placement.
Stryker expects to launch Mako Spine in the fourth quarter and Mako Shoulder by the end of the year. They’re not expected to contribute much to sales in 2024, but will have more of an impact in 2025, J.P. Morgan analyst Robbie Marcus wrote in a research note.
Zimmer Biomet received FDA clearance for a shoulder feature for its Rosa surgical robot in February. When asked for feedback on its competitor’s launch, Lobo said “it’s early, so there really isn’t anything to share right now,” adding that “we like our chances.”
Interest in soft tissue robots
Lobo also hinted at potential interest in soft tissue robotic surgery, a market that is currently dominated by Intuitive Surgical.
“It’s an area that we like as a space,” Lobo said. “It’s complicated, and there is room for more than one big player.”
Just a small fraction of general surgery procedures are currently done with surgical robots, he added.
Stryker has “looked at many” startups in soft tissue robotics, Lobo said, but hasn’t made an acquisition yet.
”We’re going to continue to explore it, but we explore multiple adjacencies,” he said.
M&A plans
Robots aside, Stryker plans to continue a steady drumbeat of acquisitions in the second half of the year. In July alone, Stryker bought Artelon, a company specializing in soft tissue fixation products for foot and ankle procedures, and Molli Surgical, which makes soft tissue localization technology for breast conserving surgery.
Stryker has freed up cash for more purchases by paying down debt from its Wright Medical and Vocera Communications acquisitions.
“We do have a very active deal pipeline,” Lobo said, adding most of the acquisitions are not very large, and the company tends to buy fast-growing assets.