Zimmer Biomet (ZBH) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales reached $1.942 billion, up 3.9% year-over-year (5.6% constant currency), marking the 10th consecutive quarter of mid-single-digit or higher growth.

• Adjusted EPS grew 10% year-over-year to $2.01, with reported EPS at $1.18, in line with long-range plan targets.

• Strong global performance driven by international markets, enabling technologies, and diversified product demand.

• Announced acquisition of OrthoGrid Systems to expand AI-driven surgical solutions and hip portfolio.

• Strategic focus on people, operational excellence, and innovation/diversification continues to deliver results.

Financial highlights

• Q2 2024 net sales: $1.942 billion (up 3.9% year-over-year, 5.6% ex-FX); six months: $3.831 billion (up 3.5%).

• Q2 net earnings: $242.8 million; adjusted net earnings: $415.0 million; adjusted EPS: $2.01.

• Q2 operating profit: $351.3 million (18.1% margin); adjusted: $552.6 million (28.5% margin).

• Q2 gross margin: 64.1% (adjusted: 71.6%), down 40 bps year-over-year due to higher manufacturing costs.

• Operating cash flow for Q2: $369 million; free cash flow: $251 million.

Outlook and guidance

• Reiterated full-year constant currency revenue growth guidance of 5%-6%; updated reported revenue growth to 4%-5% due to currency headwinds.

• Adjusted EPS guidance maintained at $8-$8.15; free cash flow expected at $1.05-$1.1 billion.

• Gross margin expected to step down sequentially in H2, but operating margin to expand over 50 bps year-over-year.

• Operating profit projected to increase in 2024, offset by higher amortization and restructuring costs.