Key Takeaways Zimmer Biomet's Q3 adjusted EPS rose 9.2% year over year, topping the consensus estimate.Revenues grew 9.7% to $2.00B but missed expectations due to weakness in Knees and Hips.The company reaffirmed EPS guidance but narrowed its revenue growth outlook for 2025.Zimmer Biomet Holdings, Inc. (ZBH) posted third-quarter 2025 adjusted earnings per share (EPS) of $1.90, which beat the Zacks Consensus Estimate by 1.06%. The adjusted figure rose 9.2% year over year.The quarter’s adjustments included ce ...

Core Insights - Zimmer Biomet Holdings, Inc. (ZBH) reported second-quarter 2025 adjusted earnings per share (EPS) of $2.07, exceeding the Zacks Consensus Estimate by 4.5% and reflecting a 3% year-over-year increase [1][9] - The company's second-quarter net sales reached $2.08 billion, marking a 7% increase year over year, and surpassing the Zacks Consensus Estimate by 1.6% [3][9] - ZBH raised its 2025 EPS guidance to a range of $8.10-$8.30, indicating strength in high-growth, non-core segments [9][12] Revenue Performance - Second-quarter net sales of $2.08 billion increased by 7% year over year, with a 5.4% increase at constant exchange rates (CER) [3][9] - U.S. sales totaled $1.17 billion, up 6.1% year over year, while international sales reached $903.5 million, reflecting an 8.1% year-over-year increase and 4.6% at CER [4][9] Segment Analysis - Sales in the Knees unit improved by 1.8% year over year at CER to $826 million, while Hips sales grew by 4% year over year at CER to $536.1 million [5][6] - The S.E.T. unit saw a significant revenue increase of 16% year over year at CER to $550.6 million, outperforming estimates [6] - Revenues from Technology & Data, Bone Cement and Surgical decreased by 2.2% to $164.6 million at CER [6] Margin and Expense Overview - Adjusted gross margin remained flat year over year at 71.5%, while selling, general and administrative expenses rose by 10.5% to $814.8 million [7] - Research and development expenses increased by 3.6% to $113.3 million, and adjusted operating margin contracted by 109 basis points to 26.8% [7] Cash Position - At the end of the second quarter, ZBH had cash and cash equivalents of $556.9 million, down from $1.38 billion at the end of the first quarter of 2025 [10] - Cumulative net cash provided by operating activities was $761 billion, compared to $597.4 billion in the year-ago period [10] Updated Financial Outlook - ZBH updated its revenue growth expectation for 2025 to a range of 6.7-7.7%, with foreign exchange anticipated to negatively impact revenues by 0.5% [11] - The adjusted EPS for the full year is now expected to be in the range of $8.10-$8.30, up from the previous estimate of $7.90-$8.10 [12] Strategic Developments - The company completed the acquisition of Paragon 28 in the second quarter, which is expected to enhance innovation and diversification in the S.E.T. business [14]

Core Viewpoint - Zimmer Biomet Holdings, Inc. reported mixed results for Q1 2025, with adjusted EPS beating estimates but showing a year-over-year decline, while revenues exceeded expectations and showed slight growth [1][11]. Financial Performance - Adjusted EPS for Q1 2025 was $1.81, beating the Zacks Consensus Estimate by 2.3%, but down 6.7% year over year [1]. - Reported EPS was 91 cents, reflecting an 8.3% increase year over year [2]. - Q1 net sales reached $1.91 billion, a 1.1% increase year over year, and up 2.3% at constant exchange rates (CER), exceeding the Zacks Consensus Estimate by 1% [3]. Revenue Breakdown - U.S. sales totaled $1.11 billion, up 1.3% year over year, while international sales were $795.5 million, up 0.7% year over year and 3.7% at CER [4]. - Revenue by segment showed: - Knees: $792.9 million, up 1.9% at CER [5]. - Hips: $495.8 million, up 2.4% at CER [5]. - S.E.T.: $470.5 million, up 4.9% at CER [6]. - Technology & Data, Bone Cement and Surgical: $149.9 million, down 3.5% at CER [6]. Margin Analysis - Adjusted gross margin was 71.2%, a contraction of 168 basis points [7]. - Selling, general and administrative expenses rose 3.1% to $758.8 million, while R&D expenses increased 2.5% to $110.6 million [7]. - Adjusted operating margin contracted 254 basis points to 25.7% [7]. Cash Position - Cash and cash equivalents at the end of Q1 were $1.38 billion, up from $525.5 million at the end of Q4 2024 [8]. - Cumulative net cash from operating activities was $382.8 million, compared to $228 million in the previous year [8]. 2025 Outlook - The company expects reported revenue growth for 2025 to be between 5.7% and 8.2% year over year, an increase from earlier guidance of 1% to 3.5% [9]. - Adjusted EPS for the full year is projected to be in the range of $7.90 to $8.10 [9]. - The Zacks Consensus Estimate for 2025 adjusted EPS is $8.22 on revenues of $7.88 billion [10]. Strategic Insights - The company is gaining momentum in the U.S. Hips market, supported by new product offerings [13]. - The acquisition of Paragon 28 is expected to enhance innovation and expand the S.E.T. business into high-growth segments [13].