Zimmer Biomet(ZBH) - 2025 Q1 - Quarterly Results

Financial Performance - First quarter net sales were $1.909 billion, representing a 1.1% increase year-over-year and a 2.3% increase on a constant currency basis[2]. - Net earnings for the first quarter were$ 182.0 million, with adjusted net earnings of $361.1 million[2]. - Diluted earnings per share were$ 0.91, while adjusted diluted earnings per share were $1.81[3]. - Total sales in the United States were$ 1.113 billion, a 1.3% increase, while international sales were $795.5 million, a 0.7% increase[10]. - Operating profit for Q1 2025 was$ 292.3 million, up from $265.9 million in Q1 2024, reflecting a growth of 9.5%[34]. - Net earnings attributable to Zimmer Biomet Holdings, Inc. for Q1 2025 were$ 182.0 million, compared to $172.4 million in Q1 2024, representing a 4.1% increase[34]. - Free cash flow for Q1 2025 was$ 278.5 million, significantly higher than $90.9 million in Q1 2024, marking an increase of 206.6%[49]. - Net cash provided by operating activities increased to$ 382.8 million in Q1 2025 from $228.0 million in Q1 2024, a growth of 77.9%[49]. - Operating profit margin improved to 15.3% in Q1 2025 from 14.1% in Q1 2024[52]. - Adjusted operating profit for Q1 2025 was$ 500.5 million, down from $539.4 million in Q1 2024, reflecting a decrease of 7.2%[52]. Revenue Guidance and Projections - The company updated its full-year 2025 reported revenue guidance to a range of 5.7% to 8.2% growth, reflecting the impact of the Paragon 28 acquisition[12]. - The company reported a projected full-year 2025 revenue change of 5.7% to 8.2%, with an organic constant currency revenue change of 3.0% to 5.0%[42]. - The company’s projected revenue growth is impacted by a foreign currency exchange effect of 0.0% to 0.5% for the full year 2025[42]. Acquisitions and Market Position - The acquisition of Paragon 28, focused on the foot and ankle orthopedic segment, strengthens the company's position in a high-growth market[7]. - U.S. hips sales showed momentum, driven by new products like the Z1™ Triple-Taper Femoral Hip System and the HAMMR® Automated Hip Surgical Impactor System[5]. - The company received FDA clearance for the Persona® Revision SoluTion™ Femur, expected to be commercially available in Q3 2025[7]. Cost and Expenses - Research and development expenses for Q1 2025 were$ 110.6 million, slightly up from $107.9 million in Q1 2024[34]. - The cost of products sold, excluding intangible asset amortization, was$ 549.8 million for Q1 2025, compared to $512.3 million in Q1 2024, reflecting an increase of 7.3%[51]. - Adjusted gross profit for Q1 2025 was$ 1,365.5 million, down from $1,378.0 million in Q1 2024, indicating a decrease of 0.9%[51]. - The gross margin for Q1 2025 was 63.3%, compared to 65.4% in Q1 2024, showing a decline of 2.1 percentage points[51]. - The company incurred$ 36.0 million in restructuring and other cost reduction initiatives in Q1 2025, down from $124.4 million in Q1 2024[34]. - The interest expense for Q1 2025 was$ 66.2 million, compared to $50.7 million in Q1 2024, indicating an increase in financing costs[34]. - The company incurred$ 151.0 million in intangible asset amortization for Q1 2025, compared to $142.1 million in Q1 2024, reflecting an increase of 6.3%[51]. Assets and Debt - Cash and cash equivalents increased significantly to$ 1,384.5 million as of March 31, 2025, from $525.5 million at the end of 2024[37]. - The company’s total assets increased to$ 22,183.9 million as of March 31, 2025, compared to $21,365.3 million at the end of 2024[37]. - Total debt as of March 31, 2025, was$ 7,176.3 million, an increase from $6,204.6 million as of December 31, 2024[55]. - Net debt increased to$ 5,791.8 million as of March 31, 2025, compared to $5,679.1 million as of December 31, 2024[55]. Corporate Recognition - The company was named one of the 2025 World's Most Ethical Companies by Ethisphere[11].