Zimmer Biomet’s Strong Q2 Performance and Optimistic Outlook

Zimmer Biomet Holdings ((ZBH)) has held its Q2 earnings call. Read on for the main highlights of the call.

Zimmer Biomet Holdings recently held its second-quarter earnings call, revealing a generally positive sentiment characterized by strong quarterly performance and increased revenue in key segments. The company expressed optimism about future growth driven by strategic acquisitions and product launches, although it acknowledged challenges such as international order delays, tariff impacts, and decreased operating margins.

Solid Quarterly Performance

Zimmer Biomet delivered a robust second quarter in 2025, achieving a 2.8% increase in sales on an organic constant currency basis. This growth was realized despite an 80 basis point selling day headwind, showcasing the company’s resilience and effective strategies in navigating market challenges.

U.S. Hips Revenue Growth

The U.S. Hips business demonstrated impressive growth, with revenue increasing by 5.2% over the previous year. This marks an acceleration from the 3.7% growth observed in the first quarter of 2025, highlighting the segment’s strong market performance and strategic initiatives.

U.S. Knees Revenue Increase

Zimmer Biomet’s U.S. Knees segment reported a sequential increase of 150 basis points, achieving a 1.7% growth over the prior year period. This growth reflects the company’s successful efforts in enhancing its product offerings and market presence.

S.E.T. Segment Growth

The S.E.T. segment recorded nearly 5% growth, driven by double-digit growth in Sports Medicine and CMFT, as well as high single-digit growth in upper extremities. This marks the seventh consecutive quarter of mid-single-digit growth for the segment, underscoring its consistent performance.

Positive Adjustments to Guidance

Zimmer Biomet raised its 2025 adjusted earnings per share guidance to a range of $8.10 to $8.30, up from the previous $7.90 to $8.10. This adjustment reflects the company’s confidence in its strategic direction and anticipated strong performance in the latter half of the year.

Strategic Acquisition of Monogram Technologies

The company announced the acquisition of Monogram Technologies, enhancing its robotic capabilities. This strategic move includes the introduction of the first robot to complete a fully autonomous surgery, positioning Zimmer Biomet at the forefront of innovation in the medical technology space.

International Order Delays

Zimmer Biomet experienced significant delays in international orders, which have now been deferred to the third quarter. This delay impacted the quarterly performance, highlighting the challenges faced in global supply chain management.

Tariff Impact

The company faced a $40 million headwind to operating profit in 2025 due to global tariffs. However, this impact was reduced from the originally estimated $60 million to $80 million, indicating some mitigation of adverse effects.

Operating Margin Decrease

Zimmer Biomet reported a decrease in adjusted operating margin to 27.8%, lower than the previous year. This decline was primarily due to increased commercial investments and the integration of Paragon 28, reflecting the company’s strategic investments in future growth.

Forward-Looking Guidance

During the earnings call, Zimmer Biomet updated its full-year guidance, reflecting confidence in a strong second half of 2025. The company raised its adjusted EPS guidance to a range of $8.10 to $8.30 and adjusted its full-year organic constant currency revenue growth expectation to 3.5% to 4.5%. This optimistic outlook is supported by robust top-line growth and favorable market conditions.

In conclusion, Zimmer Biomet’s earnings call conveyed a positive outlook with strong quarterly performance and strategic initiatives poised to drive future growth. Despite challenges such as international order delays and tariff impacts, the company remains confident in its ability to navigate these hurdles and achieve its revised guidance targets.