Zimmer Biomet (ZBH) investor relations material

Executive summary

• Second quarter net sales reached $2.177 billion, up 4.8% year-over-year on a reported basis and 4.0% on an organic constant currency basis, driven by acquisitions, favorable FX, and new product launches.

• Net earnings for Q2 were $198.3 million, with diluted EPS rising 33.8% to $1.03; adjusted EPS was $2.07, flat year-over-year.

• Operating cash flow for the quarter was $448 million, with free cash flow at $308 million, both up year-over-year.

• Raised full-year 2026 organic constant currency revenue growth guidance to 2.25%-3.25% and adjusted EPS to $8.47-$8.59.

• Strategic priorities include operational excellence, innovation, and commercial transformation.

Financial highlights

• Quarterly net sales: $2,177.0M (+4.8% YoY); net earnings: $198.3M; adjusted net earnings: $399.6M.

• GAAP diluted EPS was $1.03 (up from $0.77 YoY); adjusted EPS was $2.07 (flat YoY).

• Adjusted gross margin was 71.1% (down 120 bps YoY); reported gross margin was 63.3%.

• Adjusted operating margin was 25.7% (down 210 bps YoY); adjusted operating profit for Q2 was $559.7 million.

• Operating cash flow for six months was $807.2M (+6.1% YoY); free cash flow for six months was $554.1M.

Outlook and guidance

• Full-year 2026 reported revenue growth guidance raised to 3.9%-4.9%; organic constant currency growth expected at 2.25%-3.25%.

• Adjusted EPS guidance increased to $8.47-$8.59.

• Paragon 28 expected to contribute 1.1% to full-year reported sales growth.

• Free cash flow growth expected at 9%-11%.

• FX expected to have a 0.5% positive impact on full-year sales.