Zimmer Biomet(ZBH) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter net sales reached $2.001 billion, a 9.7% increase year-over-year, with an 8.6% increase on a constant currency basis and a 5.0% increase on an organic constant currency basis[2] - Net earnings for the third quarter were $230.9 million, with adjusted net earnings of $377.0 million, resulting in diluted earnings per share of $1.16 and adjusted diluted earnings per share of $1.90, reflecting a 9.2% increase[3][5] - Operating profit for Q3 2025 was $351.3 million, up from $279.5 million in Q3 2024, reflecting a 25.7% increase[34] - Net earnings for Q3 2025 were $230.9 million, compared to $249.1 million in Q3 2024, indicating a decrease of 7.5%[34] - For the nine months ended September 30, 2025, net sales totaled $5,987.7 million, a 5.9% increase from $5,655.4 million in the same period of 2024[37] - The company reported a basic earnings per share of $2.85 for the nine months ended September 30, 2025, down from $3.25 in 2024, a decline of 12.3%[37] - Net earnings for the three months ended September 30, 2025, were $559.3 million, compared to $665.1 million in the same period of 2024, reflecting a decrease of approximately 15.9%[41] - Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $1,149.3 million for the nine months ended September 30, 2025[50] - The diluted earnings per share for the three months ended September 30, 2025, was $1.90, compared to $1.16 in the same period of 2024[46] Sales and Revenue Growth - The U.S. business experienced 5.6% organic revenue growth, driven by the adoption of new products known as the 'Magnificent Seven'[6] - The company reported geographic sales of $1.164 billion in the U.S. (10.6% increase) and $837.3 million internationally (8.5% increase) for the third quarter[11] - The S.E.T. product category saw a significant 19.2% increase in sales, totaling $541.5 million for the third quarter[11] - For the three months ended September 30, 2025, the United States market experienced a 10.6% increase in sales, while international sales grew by 8.5%[42] - Net sales for the three months ended September 30, 2025, reached $2,001.4 million, a 9.7% increase from $1,824.2 million in 2024; for the nine months, sales were $5,987.7 million, up from $5,655.4 million[55] Acquisitions and Product Development - The company completed the acquisition of Monogram Technologies, enhancing its portfolio of orthopedic robotics and navigation solutions[8] - The iodine-treated hip implant, the first of its kind, received PMDA approval in Japan and is set to launch soon[6][8] - The company anticipates continued growth driven by new product development and market expansion strategies[30] - The company anticipates continued growth in the orthopedic market, focusing on new product development and market expansion strategies[49] Cash Flow and Assets - Cash and cash equivalents increased to $1,292.7 million as of September 30, 2025, compared to $525.5 million at the end of 2024[39] - Total assets grew to $23,488.0 million as of September 30, 2025, up from $21,365.3 million at the end of 2024, representing a 9.9% increase[39] - The company reported net cash provided by operating activities of $1,179.7 million for the year 2025, an increase of 18.7% from $993.1 million in 2024[41] - The company’s cash and cash equivalents at the end of the period were $1,292.7 million, up from $569.0 million at the end of the previous year[41] Debt and Expenses - The company’s long-term debt increased to $7,512.6 million as of September 30, 2025, compared to $5,341.6 million at the end of 2024, a rise of 40.7%[39] - Research and development expenses for Q3 2025 were $115.9 million, slightly up from $111.6 million in Q3 2024[35] - Research and development expenses reached $339.8 million, while selling, general, and administrative expenses totaled $2,384.9 million[50] - The company incurred $10.9 million in inventory and manufacturing-related charges for the three months ended September 30, 2025, compared to $9.4 million in 2024[56] Market Challenges and Recognition - The company is addressing weaknesses in Latin America, Emerging Markets in Europe, and non-core businesses that emerged late in the quarter[6] - The company was recognized by Fortune as one of the best 100 companies to work for in Europe[8] - The company initiated global restructuring programs in December 2019, 2021, and 2023, aimed at reducing costs and accelerating decision-making[2] - The company has excluded various litigation charges from its non-GAAP financial measures, which can vary significantly in their impact on operating results[4]