Zimmer Biomet Holdings, Inc. Q1 2026 Earnings Call Summary

Moby Intelligence

3 min read

Performance was driven by strong technology sales, which grew at double-digit rates, and momentum from recently launched products like the Oxford Partial Cementless Knee.
U.S. Knee growth of 2.2% was impacted by the intentional phase-out of legacy brands, including NextGen and Vanguard, as part of a broader brand rationalization strategy.
The U.S. go-to-market transition is shifting the sales force to a dedicated and specialized channel, with the 1099 component already reduced from 66% to below 60%.
Management observed rapid productivity increases in transitioned territories, with case volumes per rep moving toward double-digit weekly averages compared to a national average of seven.
International growth of 2.5% reflected difficult year-over-year comparisons and disruption from distributor consolidations in emerging markets, specifically China.
The ‘Hip Triple Play’ strategy, including the OrthoGrid AI navigation platform, now represents nearly 40% of U.S. Hip stems, driving a 5% growth in that franchise.

Full-year 2026 organic revenue guidance of 1% to 3% is maintained, assuming up to 100 basis points of price erosion and consistent growth through the remaining quarters.
The company raised adjusted EPS guidance to $8.40 – $8.55, reflecting a $0.10 net benefit from the invalidation of IEEPA tariffs and improved operational efficiency.
Management expects to complete the U.S. commercial channel transformation by the end of 2027, targeting a specialized sales force that is at least 30% dedicated.
The launch of the Monogram fully autonomous robotic system is sequenced for late 2027 or early 2028, following a semiautonomous version launch in early 2027.
Free cash flow growth expectations were increased to a range of 9% to 11%, supported by SKU rationalization and a shift of manufacturing to lower-cost geographies.

A $0.20 adjusted EPS benefit was realized in Q1 due to tariff-related items, half of which was a pull-forward of refunds originally expected in the second half of the year.
Operating margins for Q2 2026 are projected to be down approximately 200 basis points year-over-year due to the timing of commercial investments and acquisition dilution.
The company announced the departure of CFO Suketu Upadhyay, with Paul Stellato appointed as Interim CFO while a permanent successor is sought.
Zimmer Biomet committed to being the exclusive orthopedic investor in the Mobility Revolution Fund to gain early access to AI and cartilage repair technologies.