ZIMMER BIOMET HOLDINGS, INC. (ZBH): Results of Operations and Financial Condition
ZIMMER BIOMET HOLDINGS, INC. (ZBH) filed an SEC Form 8-K — Results of Operations and Financial Condition. 345 E. Main St. Warsaw, IN 46580 www.zimmerbiomet.com Exhibit 99.1 Media Investors Troy Kirkpatrick David DeMartino 614-284-1926 646-531-6115 troy.kirkpatrick@zimmerbiomet.com david.demartino@zimmerbiomet.com Kirsten Fallon Zach Weiner 781-779-5561 908-591-6955 kirsten.fallon@zim
How this was made
The 30-second read
Why it matters
The updated guidance signals incremental growth, which may attract investors seeking exposure to a stable med‑tech business.
Market read
The earnings release and guidance update provide fresh data for traders evaluating med‑tech equities.
What to watch
Potential supply‑chain constraints and foreign‑currency headwinds could temper performance
Zimmer Biomet Announces Third Quarter 2026 Financial Results
Third quarter net sales increased 3.1% on a reported basis and 3.7% on a constant currency basis, adjusted diluted EPS was consistent with the prior year period, operating cash flow and free cash flow increased, and the Company raised full-year organic constant-currency sales growth and adjusted EPS guidance. GAAP diluted EPS decreased 13.8%, while reported and adjusted operating profit margins declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net Sales - three months ended September 30GAAP | $2.06B | – | 3.1 % |
| Net Sales constant currency change - three months ended September 30non-GAAP | 3.7 % | – | 3.7 % |
| Gross Profit - three months ended September 30GAAP | $1.30B | – | – |
| Gross margin - three months ended September 30GAAP | 63.1 % | – | – |
| Adjusted gross profit - three months ended September 30non-GAAP | $1.48B | – | – |
| Adjusted gross margin - three months ended September 30non-GAAP | 71.7 % | – | – |
| Operating expenses - three months ended September 30GAAP | 1,755.4 | – | – |
| Operating Profit - three months ended September 30GAAP | 307.6 | – | – |
| Operating profit margin - three months ended September 30GAAP | 14.9 % | – | – |
| Adjusted operating profit - three months ended September 30non-GAAP | $518.8M | – | – |
| Adjusted operating profit margin - three months ended September 30non-GAAP | 25.1 % | – | – |
| Earnings before income taxes - three months ended September 30GAAP | 230.1 | – | – |
| Net Earnings - three months ended September 30GAAP | 192.9 | – | – |
| Net Earnings of Zimmer Biomet Holdings, Inc. - three months ended September 30GAAP | $191.6M | – | – |
| Adjusted Net Earnings of Zimmer Biomet Holdings, Inc. - three months ended September 30non-GAAP | $362.8M | – | – |
| Diluted earnings per common share - three months ended September 30GAAP | $ 1.00 | – | a decrease of 13.8% |
| Adjusted diluted earnings per common share - three months ended September 30non-GAAP | $ 1.90 | – | consistent with the prior year period |
| Effective tax rate - three months ended September 30GAAP | 16.2 % | – | – |
| Adjusted effective tax rate - three months ended September 30non-GAAP | 17.6 % | – | – |
| Net cash provided by operating activities - three months ended September 30GAAP | $560M | – | – |
| Free cash flow - three months ended September 30non-GAAP | $372.4M | – | – |
| Net Sales - nine months ended September 30GAAP | $6.33B | – | 5.7 % |
| Net Sales constant currency change - nine months ended September 30non-GAAP | 5.0 % | – | 5.0 % |
| Net Sales organic constant currency change - nine months ended September 30non-GAAP | 3.5 % | – | 3.5 % |
| Gross Profit - nine months ended September 30GAAP | $4.03B | – | – |
| Gross margin - nine months ended September 30GAAP | 63.7 % | – | – |
| Adjusted gross profit - nine months ended September 30non-GAAP | $4.55B | – | – |
| Adjusted gross margin - nine months ended September 30non-GAAP | 71.9 % | – | – |
| Operating expenses - nine months ended September 30GAAP | 5,319.7 | – | – |
| Operating Profit - nine months ended September 30GAAP | 1,006.8 | – | – |
| Operating profit margin - nine months ended September 30GAAP | 15.9 % | – | – |
| Adjusted operating profit - nine months ended September 30non-GAAP | $1.65B | – | – |
| Adjusted operating profit margin - nine months ended September 30non-GAAP | 26.1 % | – | – |
| Net Earnings of Zimmer Biomet Holdings, Inc. - nine months ended September 30GAAP | $628.1M | – | – |
| Adjusted Net Earnings of Zimmer Biomet Holdings, Inc. - nine months ended September 30non-GAAP | $1.17B | – | – |
| Diluted earnings per common share - nine months ended September 30GAAP | $ 3.25 | – | – |
| Adjusted diluted earnings per common share - nine months ended September 30non-GAAP | $ 6.06 | – | – |
| Effective tax rate - nine months ended September 30GAAP | 19.8 % | – | – |
| Adjusted effective tax rate - nine months ended September 30non-GAAP | 17.9 % | – | – |
| Net cash provided by operating activities - nine months ended September 30GAAP | $1.37B | – | – |
| Free cash flow - nine months ended September 30non-GAAP | $926.5M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| United States - three months ended September 30Constant currency sales change was 3.6 %. | $1.21B | – | 3.6 % |
| International - three months ended September 30Constant currency sales change was 3.9 %. | 857.2M | – | 2.4 % |
| Knees - three months ended September 30Constant currency sales change was (2.6 ). | 767.5M | – | (3.1 ) % |
| Hips - three months ended September 30Constant currency sales change was 7.0. | 536.5M | – | 6.0 % |
| S.E.T. - three months ended September 30Constant currency sales change was 7.1. S.E.T. includes Sports Medicine, Biologics, Foot and Ankle, Upper Extremities, Trauma, Craniomaxillofacial and Thoracic. | 578.3M | – | 6.8 |
| Technology & Data, Bone Cement and Surgical - three months ended September 30Constant currency sales change was 13.0. | 180.6M | – | 11.9 |
| United States - nine months ended September 30Constant currency sales change was 5.9 %; organic constant currency sales change was 3.8 %. | $3.65B | – | 5.9 % |
| International - nine months ended September 30Constant currency sales change was 3.8; organic constant currency sales change was 3.2 %. | 2.67B | – | 5.3 |
| Knees - nine months ended September 30Constant currency sales change was (0.2 ); organic constant currency sales change was (0.2 ). | 2.42B | – | 0.6 |
| Hips - nine months ended September 30Constant currency sales change was 5.1; organic constant currency sales change was 5.1. | 1.62B | – | 5.5 |
| S.E.T. - nine months ended September 30Constant currency sales change was 9.9; organic constant currency sales change was 4.1. S.E.T. includes Sports Medicine, Biologics, Foot and Ankle, Upper Extremities, Trauma, Craniomaxillofacial and Thoracic. | 1.73B | – | 10.5 |
| Technology & Data, Bone Cement and Surgical - nine months ended September 30Constant currency sales change was 15.5; organic constant currency sales change was 15.5. | 551.8M | – | 16.0 |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Projected Year Ending December 31, 2026 outlook
- Revenue2026 Reported Revenue Change 4.4% - 4.9%; 2026 Constant Currency Revenue Change 4.1% - 4.6%; 2026 Organic Constant Currency Revenue Change 3.0% - 3.5%
- NoteForeign Currency Exchange Impact +0.25%
- NoteAdjusted Diluted EPS $8.50- $8.60
Capital returns
- Dividends paid to stockholders were $(139.2 ) for the nine months ended September 30, 2026, compared with $(142.8 ) for the nine months ended September 30, 2025.
- Repurchase of common stock was $(579.3 ) for the nine months ended September 30, 2026, compared with $(237.0 ) for the nine months ended September 30, 2025.
What drove it
- Third quarter total net sales increased 3.7% on a constant-currency basis.
- Hips grew 7.0 on a constant-currency basis in the third quarter.
- S.E.T. grew 7.1 on a constant-currency basis in the third quarter.
- Technology & Data, Bone Cement and Surgical grew 13.0 on a constant-currency basis in the third quarter.
- The Company stated that Hips, S.E.T. and Technology & Data, Bone Cement and Surgical, representing two-thirds of its book of business, grew at upper single digit or double-digit rates.
- For the nine-month period, Technology & Data, Bone Cement and Surgical grew 15.5 on both constant-currency and organic constant-currency bases.
- For the nine-month period, S.E.T. growth included a 5.8 % Paragon 28 impact, with organic constant-currency growth of 4.1 %.
Concerns
- Knees sales declined (3.1 ) % on a reported basis and (2.6 ) on a constant-currency basis in the third quarter.
- Third-quarter GAAP diluted earnings per share decreased 13.8% to $1.00.
- Third-quarter operating profit was 307.6 versus 351.3, and operating profit margin was 14.9 % versus 17.6 %.
- Third-quarter adjusted operating profit was $ 518.8 versus $ 531.0, and adjusted operating profit margin was 25.1 % versus 26.5 %.
- Third-quarter gross margin was 63.1 % versus 63.2 %, and adjusted gross margin was 71.7 % versus 72.6 %.
- Cash and cash equivalents declined to $ 399.9 from $ 591.9, while net debt increased to $ 7,104.3 from $ 6,927.2.
What to watch
- Execution against updated 2026 reported revenue change guidance of 4.4% - 4.9%.
- Execution against updated 2026 organic constant currency revenue change guidance of 3.0% - 3.5%.
- Delivery against updated adjusted diluted EPS guidance of $8.50- $8.60.
- Whether Knees sales recover from the third-quarter constant-currency decline of (2.6 ).
- The trajectory of adjusted gross margin and adjusted operating profit margin, which were 71.7 % and 25.1 % in the third quarter.
- The contribution from Paragon 28, which represented a 5.8 % impact on nine-month S.E.T. constant-currency growth and a 1.5 % impact on nine-month total constant-currency growth.
Balance sheet and cash flow
- Cash and cash equivalents were $ 399.9 as of September 30, 2026, compared with $ 591.9 as of December 31, 2025.
- Debt, both current and long-term, was $ 7,504.2 as of September 30, 2026, compared with $ 7,519.1 as of December 31, 2025.
- Net debt was $ 7,104.3 as of September 30, 2026, compared with $ 6,927.2 as of December 31, 2025.
- Receivables, net were 1,816.0 as of September 30, 2026, compared with 1,704.4 as of December 31, 2025.
- Inventories were 2,367.2 as of September 30, 2026, compared with 2,286.4 as of December 31, 2025.
- Net cash provided by operating activities was $ 1,367.2 for the nine months ended September 30, 2026, compared with $ 1,179.7 for the prior-year period.
- Net cash used in investing activities was $(893.1 ) for the nine months ended September 30, 2026, compared with $(1,653.7 ) for the prior-year period.
- Net cash used in financing activities was $(667.5 ) for the nine months ended September 30, 2026, compared with 1,223.0 for the prior-year period.
Analysis
Zimmer Biomet delivered third-quarter net sales of $2.063 billion, up 3.1% on a reported basis and 3.7% on a constant-currency basis. The growth profile was led by Technology & Data, Bone Cement and Surgical, up 13.0 on a constant-currency basis, and Hips and S.E.T., up 7.0 and 7.1, respectively. Knees was the exception, with sales down (3.1 ) % reported and (2.6 ) on a constant-currency basis. U.S. sales increased 3.6 % and international sales increased 3.9 % on a constant-currency basis.
Profitability was lower on both a reported and adjusted basis in the quarter. Gross margin was 63.1 % compared with 63.2 %, while adjusted gross margin was 71.7 % compared with 72.6 %. Operating profit was 307.6 compared with 351.3, and operating profit margin was 14.9 % compared with 17.6 %. Adjusted operating profit was $ 518.8 compared with $ 531.0, and adjusted operating profit margin was 25.1 % compared with 26.5 %. GAAP diluted earnings per share declined 13.8% to $1.00, while adjusted diluted earnings per share held at $1.90.
Cash generation strengthened. Third-quarter net cash provided by operating activities was $ 560.0 compared with $ 418.7, and free cash flow was $ 372.4 compared with $ 277.6. For the nine-month period, net cash provided by operating activities reached $ 1,367.2 and free cash flow was $ 926.5. The Company repurchased $(579.3 ) of common stock and paid $(139.2 ) of dividends during the first nine months. Cash and cash equivalents were $ 399.9 at September 30, 2026, while net debt was $ 7,104.3.
For the first nine months, net sales were $ 6,326.6, up 5.7 % reported, 5.0 % at constant currency and 3.5 % on an organic constant-currency basis. S.E.T. grew 9.9 at constant currency but 4.1 % organically, reflecting a 5.8 % Paragon 28 impact. The Company increased its full-year outlook for reported revenue change to 4.4% - 4.9%, constant-currency revenue change to 4.1% - 4.6%, organic constant-currency revenue change to 3.0% - 3.5%, and adjusted diluted EPS to $8.50- $8.60. The updated guidance places attention on sustaining growth in the faster-growing franchises while improving the margin trends and restoring Knees growth.
Management, verbatim
We are very pleased with our solid third quarter results, growing net sales 3.7% on a constant-currency basis and generating strong operating and free cash flow.
Ivan Tornos, Chairman, President and CEO of Zimmer Biomet
Our Hips, S.E.T. and Technology & Data, Bone Cement and Surgical franchises – representing two-thirds of our book of business – grew at upper single digit or double-digit rates, validating the progress of our diversification strategy, the strength of our innovation engine and the significant strides we are making in commercial execution.
Ivan Tornos, Chairman, President and CEO of Zimmer Biomet
This broad-based performance gives us confidence to raise our full-year organic constant-currency sales growth and adjusted EPS guidance.
Ivan Tornos, Chairman, President and CEO of Zimmer Biomet
Not in the filing
stated, not guessed- Previous-release outlook for comparison was not provided; therefore, no actual-versus-prior-guidance comparison is available.
- Prior-quarter figures and sequential changes for reported metrics were not provided.
- Full-year 2026 guidance for gross margin, operating expenses and tax rate was not provided.
- Third-quarter dividend payments and common-stock repurchases were not separately provided.
- GAAP diluted EPS guidance and a reconciliation of adjusted diluted EPS guidance to GAAP were not available without unreasonable efforts, as stated by the Company.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Zimmer Biomet filed a Form 8‑K reporting its third‑quarter 2026 results and revising its full‑year guidance.
Ticker impact
ZBH reported Q3 2026 net sales of $2.063 billion and updated full-year 2026 revenue and EPS guidance.
likely modest upside as market prices in the updated guidance
The company increased its full‑year organic revenue growth range and EPS outlook, suggesting better performance than previously expected.
Market effects
supports a positive outlook for the medical‑device and orthopedics sector
could lift U.S. healthcare stocks in the near term
moderate, as Zimmer Biomet is a globally recognized med‑tech player
Counterpoint
Guidance raise is modest and may already be priced in, limiting upside
Key entities
- companyZimmer Biomet Holdings, Inc.
Global medical‑technology firm
