Zimmer Biomet (ZBH) Q4 2025 earnings summary

Executive summary

• Achieved 5.4% organic constant currency sales growth in Q4 2025 and 3.9% for the full year, with strong U.S. and international performance despite tariff headwinds and integration of three acquisitions.

• U.S. business grew 5.7% in Q4, driven by new product launches, robust robotic sales, and end-of-year capital sales above historic levels.

• Initiated a major U.S. Salesforce transformation to a fully dedicated and specialized model, aiming for completion by end of 2027 to drive sustainable growth.

• Focused on three strategic priorities: people and culture, operational excellence, and innovation/diversification, with a robust pipeline and new technology launches.

• Fourth quarter diluted EPS was $0.70, down 41.7%, while adjusted diluted EPS was $2.42, up 4.8%.

Financial highlights

• Q4 2025 net sales were $2.244 billion, up 10.9% reported and 5.4% organic constant currency, with adjusted EPS of $2.42, up 4.8% year-over-year.

• Full-year 2025 adjusted EPS was $8.20 and free cash flow reached $1.172 billion, growing over 11% year-over-year.

• Gross margin for the year was 61.6%, with adjusted gross margin at 72.2%.

• Operating profit for the year was $1.098 billion; adjusted operating profit was $2.263 billion.

• Net debt at year-end was $6.93 billion.

Outlook and guidance

• 2026 organic constant currency revenue growth expected in the 1%-3% range, with adjusted EPS of $8.30-$8.45 and free cash flow growth of 8%-10%.

• Guidance includes Paragon 28 contribution from April 2026 and contemplates up to 100 basis points of pricing erosion and stable tariff/policy environment.

• Operating margins expected to be down 50 basis points from 2025, with sequential improvement after Q1.

• Transition to a predominantly direct and specialized U.S. sales organization is expected to temper 2026 sales guidance but drive long-term growth.

• Share buyback program of up to $750 million planned for 2026.