Zimmer Biomet Holdings, Inc. Q1 FY2026 earnings call

Ivan expressed gratitude to Zimmer Biomet team members. Started strong in 2026 strategically, operationally, and financially. Covered first quarter results, U.S. go-to-market changes, 2026 outlook, and three key strategic priorities: people and culture, operational excellence, innovation and diversification. Mentioned hiring Dr. Jonathan Bidorchik as chief science, technology, and medical affairs officer. Progress on operational excellence through expanding manufacturing footprint, reducing working capital. Committed to being exclusive orthopedic investor in Mobility Revolution Fund. Paragon 28, OrthoGrid, and Monogram clinical study progress. Sukhi thanked Zimmer Biomet organization and discussed first quarter results, P&L, cash and liquidity.

First quarter 2026 organic constant currency sales grew 2.9% at the upper end of annual 2026 revenue guidance range. U.S. business increased 3.2%, international grew 2.5%. U.S. knee growth 2.2% with partial knee cells up over 20%. U.S. HIP franchise grew 5%, international hip cells increased 1%. Technology and data, bone cement, and surgical business grew nearly 12%. SET growth 1.6% led by U.S. CMFT and upper extremities businesses. Paragon 28 first quarter growth accelerated around 200 basis points from the fourth quarter of 2025 and is trending back towards double-digit growth performance. OrthoGrid delivered its strongest quarter to date with significant growth and accelerated adoption.

Maintained full year 2026 organic constant currency revenue growth guidance of 1 to 3%, with growth roughly consistent throughout remainder of 2026. Assumption of up to 100 basis points of price erosion unchanged. Anticipated approximate 50 basis points FX tailwind to full-year revenue growth, second quarter about neutral at current rates and Paragon 28 to contribute around 100 basis points to reported sales growth in 2026. Reported sales guidance remains unchanged at 2.5% to 4.5% for full year. Expect 2026 operating margins to be better than anticipated, down slightly less than 50 basis points from 2025. Raised EPS and free cash flow growth expectations for 2026: adjusted EPS to be $8.40 to $8.55 from previous $8.30 to $8.45, free cash flow growth to be in range of 9% to 11% versus previous 8% to 10%.

Includes multiple questions and answers from analysts regarding sales transition, productivity in regions, macro impact, product discontinuations, tariff impact, rollout of Monogram, Canary Smart Implant, Rosa's shoulder launch, Paragon growth, underlying hip and knee market growth, sales transition disruptions, pricing, etc.