Zimmer Biomet Growth Slows Even as Guidance Rises
Zimmer Biomet Holdings raised its full-year outlook even as second-quarter revenue growth cooled to 4.8% from 9.3% the prior quarter.
Zimmer Biomet Holdings (ZBH) reported second-quarter net sales of $2.177 billion, up 4.8% from a year earlier, a marked slowdown from the 9.3% growth the medical-device maker posted in the first quarter of 2026. Organic constant-currency growth eased to 4.0% from 6.8% as it lapped tougher year-earlier comparisons.
Adjusted diluted earnings per share came in at $2.07, flat with the prior-year period and a sharp reversal from the 15.5% adjusted EPS growth reported in the first quarter. GAAP diluted EPS rose 33.8% to $1.03, similar in percentage terms to the first quarter's 34.1% gain, though the dollar figure fell sequentially from $1.22.
The deceleration was uneven across product lines. Knees, historically one of Zimmer Biomet's largest categories, grew just 0.4% on a reported basis and 0.1% organic constant currency, down from 4.5% and 1.8% respectively in the first quarter, as International Knees sales turned negative at -0.9% after growing 7.6% the prior period. The S.E.T. segment, which covers sports medicine, extremities, trauma and related products, slowed to 6.4% reported growth from 19.5% as the company lapped the anniversary of its Paragon 28 acquisition, though organic growth of 3.4% held up better than the year-ago comparison suggested. Technology & Data, Bone Cement and Surgical products bucked the trend, accelerating to 21.1% reported growth from 14.6%, and remained the company's fastest-growing category.
Geographically, the U.S. outpaced international markets in the second quarter, growing 5.6% versus 3.7% reported, a reversal from the first quarter when international sales had grown faster at 10.3% versus 8.6% domestically.
Operating profit rose to $326.1 million from $300.0 million a year earlier, lifting margin to roughly 15.0% from 14.4%, as lower acquisition and integration costs of $18.1 million, down from $78.9 million, offset higher restructuring charges of $29.8 million and increased selling, general and administrative expense of $899.3 million. Operating cash flow rose to $447.9 million from $359.4 million in the first quarter, and free cash flow increased to $308.3 million from $245.9 million over the same span.
The balance sheet showed a shift toward near-term debt obligations. The current portion of long-term debt more than doubled to $1,201.5 million at June 30 from $587.1 million at year-end 2025, while cash and equivalents fell to $410.0 million from $591.9 million, reflecting upcoming maturities.
Zimmer Biomet raised its full-year 2026 guidance, lifting expected reported revenue growth to a range of 3.9% to 4.9% from 2.5% to 4.5%, and organic constant-currency growth to 2.25% to 3.25% from 1.0% to 3.0%. The company also raised its adjusted diluted EPS outlook to $8.47 to $8.59 from $8.40 to $8.55.
The company increased its share-repurchase plans for the year to up to $1 billion, after buying back $250 million of stock in the first quarter. It repurchased $500.8 million of common stock in the first six months of 2026, more than double the $237.0 million bought back in the same period a year earlier. Separately, Zimmer Biomet disclosed a leadership change in its Asia Pacific business, naming Chintan Desai president of the region to succeed Sang Yi, who departs August 28.