Zimmer Biomet (ZBH) Q4 2025 earnings summary

Executive summary

• Q4 2025 net sales reached $2.244 billion, up 10.9% reported and 5.4% organic constant currency, with U.S. up 5.7% and international up 5%.

• Full-year 2025 net sales were $8.232 billion, up 7.2% reported and 3.9% organic constant currency, with adjusted EPS of $8.20 and free cash flow of $1.172 billion.

• Transformation to a dedicated, specialized U.S. salesforce is underway, with one-third completed and full transition expected by end of 2027.

• Strategic focus on people and culture, operational excellence, innovation/diversification, and robust new product launches.

• Operating cash flow for the year was $1.697 billion.

Financial highlights

• Q4 2025 adjusted EPS was $2.42, up 4.8% year-over-year; GAAP EPS was $0.70, down due to one-time charges.

• Full-year diluted EPS was $3.55, down 19.9%; adjusted diluted EPS was $8.20, up 2.5%.

• Adjusted gross margin was 72.4% in Q4 and 72.2% for the year; adjusted operating margin was 29.1% in Q4 and 27.5% for the year.

• Free cash flow for 2025 grew over 11% to $1.172 billion, marking the third consecutive year of high single-digit or greater growth.

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

Outlook and guidance

• 2026 organic constant currency revenue growth expected in the 1%-3% range; reported revenue change projected at 2.5%-4.5%.

• Adjusted EPS guidance for 2026 is $8.30-$8.45, with free cash flow growth of 8%-10%.

• Guidance includes Paragon 28 contribution from April 2026 and up to 100 basis points of pricing erosion.

• Operating margins expected to be down 50 basis points from 2025, with Q1 margins down 100 basis points year-over-year.

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