Zimmer Biomet Posts $2.09 Adjusted EPS, Beats Q1 Estimates by 15.5%
Medical technology leader Zimmer Biomet (NYSE: ZBH) delivered stronger-than-expected first quarter results, with adjusted earnings per share jumping 15.5% year-over-year to $2.09, prompting management to raise full-year guidance amid healthy demand for orthopedic implants and surgical technologies.
Key Numbers
The Warsaw, Indiana-based orthopedic device manufacturer posted first quarter revenue of $2.087 billion, representing 9.3% growth on a reported basis and 6.8% growth on a constant currency basis. Stripping out the impact of the Paragon 28 acquisition completed in April 2025, organic constant currency growth came in at 2.9%.
On the bottom line, reported diluted EPS surged 34.1% to $1.22, while adjusted diluted EPS climbed 15.5% to $2.09. The company generated robust cash flow with $359.4 million in operating cash flow and $245.9 million in free cash flow during the quarter.
Geographically, U.S. sales rose 8.6% to $1.209 billion, representing 58% of total revenue, while international sales grew 4.2% on a constant currency basis to $877.4 million. The Americas continue to be the growth engine, with domestic organic growth of 3.2% outpacing international organic growth of 2.5%.
By product category, the Sports Medicine, Extremities, and Trauma (S.E.T.) segment led growth with a 17.4% constant currency increase to $562.2 million, though organic growth was just 1.6% after adjusting for the Paragon 28 acquisition. The Technology & Data segment posted impressive 11.7% growth to $171.8 million, highlighting strong adoption of the company's ROSA robotic systems and digital solutions.
Hip implants grew 3.2% on a constant currency basis to $524.1 million, with U.S. sales up 5.0%, while knee implants increased 1.8% to $828.6 million globally. The knee segment, representing 40% of total revenue, saw modest U.S. growth of 2.2% but continues to benefit from new product launches including the ROSA Knee with OptimiZe.
What Management Said
CEO Ivan Tornos struck an optimistic tone, emphasizing the company's "solid start to the year — strategically, operationally and financially." He attributed the strong performance to "healthy end markets, continued momentum from our recently launched products and disciplined execution across the business."
Tornos specifically highlighted progress on the company's go-to-market transformation, stating it is "proceeding as planned." This reorganization of the sales force and commercial operations is a key strategic initiative aimed at improving efficiency and market penetration.
The CEO expressed confidence in the company's longer-term trajectory, noting that "our strategy will position Zimmer Biomet for consistent, durable growth over the longer term." This suggests management sees the current quarter's performance as sustainable rather than a one-time occurrence.
Notably absent from management commentary were concerns about hospital staffing shortages or procedure backlogs that have plagued the industry in recent quarters, suggesting these headwinds may be abating.
What to Watch
Zimmer Biomet raised its full-year 2026 adjusted EPS guidance to $8.40-$8.55 from the previous range of $8.30-$8.45, representing a $0.10 increase at the midpoint. The company maintained its revenue growth guidance of 2.0%-4.0% on a constant currency basis, with organic growth expected at 1.0%-3.0% excluding Paragon 28.
Several strategic initiatives warrant monitoring in coming quarters. The company completed enrollment in its multi-center clinical study in India for mBôs, an autonomous robotic total knee arthroplasty system acquired from Monogram Technologies. This "first-of-its-kind" technology could differentiate Zimmer in the competitive robotics market if regulatory approvals proceed smoothly.
The recent appointment of Dr. Jonathan M. Vigdorchik as Chief Science, Technology and Medical Affairs Officer signals increased focus on AI, robotics, and data analytics — areas where Zimmer has lagged competitors like Stryker and Johnson & Johnson's DePuy Synthes division.
Capital allocation remains shareholder-friendly, with $250 million in share repurchases completed during Q1. This buyback activity, combined with strong free cash flow generation, suggests management confidence in the business outlook.
The full commercial launch of ROSA Knee with OptimiZe and the newly FDA-cleared G7 Acetabular System for complex hip procedures represent near-term revenue catalysts. Success of these products will be critical for maintaining momentum in the core hip and knee segments, which together represent 65% of total revenue.
Investors should monitor organic growth rates closely in upcoming quarters. While Q1's 2.9% organic growth met internal targets, it remains below the 4-5% rates many competitors are achieving. The company's ability to accelerate organic growth while integrating Paragon 28 will determine whether the current valuation multiple expansion is justified.
--- *StockCliff Research*
*Source: Zimmer Biomet Holdings Q1 2026 Form 8-K filed with the SEC on April 28, 2026*