Zimmer Biomet (ZBH) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 reached $2.087 billion, up 9.3% year-over-year on a reported basis and 2.9% organically, reaching the upper end of annual guidance.

• Adjusted EPS was $2.09, up 15.5% year-over-year, with a $0.20 benefit from tariff-related items.

• Operating cash flow was $359.4 million, with free cash flow at $245.9 million.

• U.S. business grew 3.2% organically and 8.6% reported; international sales rose 2.5% organically and 10.3% reported, with strong technology and new product sales.

• Strategic priorities include people and culture, operational excellence, innovation, and diversification.

Financial highlights

• Net earnings for Q1 2026 were $238.1 million (GAAP) and $409.4 million (adjusted).

• Adjusted gross margin was 73%, higher year-over-year, driven by favorable mix and tariff benefits.

• Adjusted operating margin was 27.3%.

• Free cash flow was $245.9 million, down from $278.5 million in Q1 2025.

• $250 million in share repurchases reduced diluted shares outstanding to 195.8 million.

Outlook and guidance

• Full-year 2026 organic constant currency revenue growth guidance maintained at 1%-3%.

• Reported sales guidance unchanged at 2.5%-4.5%.

• Adjusted EPS guidance raised to $8.40-$8.55; free cash flow growth now 9%-11%.

• Operating margins expected to be down slightly less than 50 bps from 2025, with Q2 margins down ~200 bps year-over-year.

• Price erosion assumption up to 100 bps for the year; FX tailwind of ~50 bps expected.