ZimVie (ZIMV) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales were $112 million, down 5.2% year-over-year, with profitability exceeding expectations and adjusted EBITDA rising 41% to $17.6 million, driven by operational efficiency and premium product focus.

• Completed sale of spine segment for $377 million, recording an $11.1 million gain; proceeds used to prepay $275 million of term loan, with restructuring activities ongoing post-divestiture.

• Strategic initiatives included acquisition of a Costa Rica distributor for $3.3 million and launches of new implant and digital solutions.

• Net loss from continuing operations improved to $(2.6) million from $(11.5) million year-over-year; adjusted net income rose to $7.4 million.

• Focus remains on innovation, digital workflow, and expanding adoption through education and operational improvements.

Financial highlights

• Adjusted EBITDA margin improved to 15.7%, up 520 basis points year-over-year; adjusted EPS increased to $0.27 from $0.08, a 238% improvement.

• Gross margin (excluding intangible asset amortization) improved to 66.1% from 62.6% year-over-year.

• Adjusted cost of products sold as a percentage of sales decreased to 33.6% from 37.2%.

• Cash and cash equivalents at quarter-end were $66.8 million; net debt stood at $153 million.

• Net cash used in operating activities was $(13.9) million for Q1 2025.

Outlook and guidance

• Full-year 2025 net sales guidance is $445–$460 million, with adjusted EBITDA guidance of $65–$70 million and adjusted EPS guidance of $0.80–$0.95.

• Q2 2025 net sales expected at $112–$114 million; adjusted EBITDA margin projected at ~15%.

• Management expects sufficient liquidity for at least the next 12 months, supported by cash, operations, and undrawn revolver.

• Ongoing restructuring and cost optimization expected to complete by end of 2025, with total charges of ~$7 million.