Zimmer Biomet (ZBH) Q3 2026 earnings summary

Executive summary

• Q3 net sales were $2,062.9M, up 3.1% reported and 3.7% in constant currency; adjusted diluted EPS was $1.90, flat YoY.

• 9M net sales rose 5.7% to $6,326.6M and net earnings increased to $628.1M from $565.8M.

Financial highlights

• Q3 net earnings were $191.6M versus $230.9M and diluted EPS was $1.00 versus $1.16; the comparison included a prior-year contingent-consideration benefit that did not recur.

• Adjusted gross margin was 71.7%, down 90 bps YoY; adjusted operating margin was 25.1%, down 140 bps.

• Q3 operating cash flow was $560.0M and free cash flow was $372.4M, up from $418.7M and $277.6M, respectively.

• Q3 SG&A increased to $855.0M from $811.4M, while R&D declined to $105.9M from $115.9M.

Outlook and guidance

• FY2026 organic constant-currency sales growth guidance rose to 3.0%-3.5%; reported growth guidance is 4.4%-4.9% and constant-currency growth guidance is 4.1%-4.6%.

• FY2026 adjusted EPS guidance increased to $8.50-$8.60 from $8.47-$8.59; free cash flow growth expectation remains 9%-11%.

• Paragon 28 is expected to contribute 1.1% to FY2026 reported sales growth, and FX is projected to add 0.25%.

• Adjusted gross margin is expected near 72%; adjusted operating margin is expected to decline slightly more than 50 bps YoY. Management expects 2027 to be better than 2026, with detailed guidance pending.