Executive Summary

Q2 2025 delivered solid top-line and adjusted bottom-line performance: net sales $2.077B (+7.0% reported; +2.8% organic CC) and adjusted diluted EPS $2.07 (+3% YoY), while GAAP diluted EPS fell to $0.77 due to acquisition-related and interest expense .
Results were above Wall Street consensus: revenue beat by ~$21M and adjusted EPS beat by ~$0.09; EBITDA also slightly exceeded estimates (see Estimates Context) (Values retrieved from S&P Global).
Full-year 2025 guidance was tightened higher for reported and constant-currency revenue and raised for adjusted EPS to $8.10–$8.30; FX now expected to be a 50 bps tailwind, and tariff headwind lowered to ~$40M .
Management highlighted catalysts for H2 acceleration: robust July start, continued adoption of “Magnificent Seven” launches (Z1 hip stem, Persona OsseoTi, Oxford Cementless partial knee), and timing of EMEA orders; they reiterated strong confidence in organic growth nearing ~6% in Q3 excluding Paragon 28 .

What Went Well and What Went Wrong

What Went Well

U.S. Hips strength and sequential knees improvement: “We grew 5.2% over the prior year… U.S. knees increased sequentially by 150 bps, growing 1.7%,” supported by new launches and competitive conversions in Z1 hip .
S.E.T. momentum: organic growth +4.9% with double-digit CMFT and Sports; seventh consecutive quarter of at least mid-single digit growth, positioning S.E.T. as second-largest business post-Paragon 28 .
Adjusted gross margin expansion: 72.3% vs 71.6% in Q2 2024, driven by favorable mix and lower excess/obsolete inventory .
Confidence and visibility in H2 acceleration: “Strongest month so far… July,” with no selling-day headwind, easier ERP comps, and shifted international orders to Q3 .

What Went Wrong

GAAP profitability compressed YoY: diluted EPS fell from $1.18 to $0.77; operating margin declined to 14.4% (vs 18.1% prior year) on acquisition/integration charges and higher interest expense tied to Paragon 28 .
Technology & Data, Bone Cement and Surgical segment declined (-2.2% reported), reflecting mix shift toward ROSA placements vs outright sales and tough comps .
International orders experienced timing delays into Q3, muting Q2 organic growth; selling day headwind (~80 bps) also impacted the quarter .

Financial Results

Consolidated Results vs Prior Periods and Estimates

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Billions)	$2.023	$1.909	$2.077
Adjusted Diluted EPS ($)	$2.31	$1.81	$2.07
GAAP Diluted EPS ($)	$1.20	$0.91	$0.77
Adjusted Gross Margin (%)	71.3%	71.5%	72.3%
Adjusted Operating Margin (%)	30.8%	26.2%	27.8%

Wall Street Consensus vs Actuals

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Consensus ($USD Billions)	$2.015	$1.895	$2.056
Revenue Actual ($USD Billions)	$2.023	$1.909	$2.077
EPS Consensus (Adjusted, $)	$2.293	$1.770	$1.976
EPS Actual (Adjusted, $)	$2.31	$1.81	$2.07
EBITDA Consensus ($USD Millions)	722.5	603.5	673.8
EBITDA Actual ($USD Millions)	733.9*	595.2*	677.3*

Notes: Consensus and EBITDA values are from S&P Global; actual EBITDA from S&P Global estimates backfill. All S&P values marked with * (Values retrieved from S&P Global).

Segment and Geographic Breakdown (Q2 2025)

Segment/Geo	Net Sales ($USD Millions)	YoY Reported %	Constant Currency %	Organic CC %
United States	$1,173.8	6.1%	6.1%	2.3%
International	$903.5	8.1%	4.6%	3.4%
Knees (Total)	$826.0	3.1%	1.8%	1.8%
Hips (Total)	$536.1	5.8%	4.0%	4.0%
S.E.T.	$550.6	17.3%	16.0%	4.9%
Tech & Data, Bone Cement & Surgical	$164.6	-0.2%	-2.2%	-2.2%
Total	$2,077.3	7.0%	5.4%	2.8%

KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
Operating Cash Flow ($USD Millions)	$506.2	$382.8	$378.2
Free Cash Flow ($USD Millions)	$402.8	$278.5	$247.7
Net Debt ($USD Millions)	$5,679.1 (Dec 31, 2024)	—	$7,015.6 (Jun 30, 2025)
Adjusted Effective Tax Rate (%)	17.5%	18.2%	18.2%

Commentary: Q2 revenue and adjusted EPS both beat consensus; margins improved sequentially vs Q1 as new product mix and lower E&O offset investment headwinds; cash generation remained strong despite Paragon 28 closing .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Reported Revenue Growth	FY 2025	5.7%–8.2%	6.7%–7.7%	Raised/Narrowed
FX Impact	FY 2025	0.0%–0.5%	0.5%	More favorable
Constant Currency Revenue Growth	FY 2025	5.7%–7.7%	6.2%–7.2%	Raised/Narrowed
Organic CC Revenue Growth (ex-Paragon 28)	FY 2025	3.0%–5.0%	3.5%–4.5%	Raised/Narrowed
Adjusted Diluted EPS	FY 2025	$7.90–$8.10	$8.10–$8.30	Raised
Free Cash Flow	FY 2025	—	$1.0B–$1.2B	Initiated/Positive
Adjusted Operating Margin vs 2024	FY 2025	Down 100–150 bps (prior)	Down ~100 bps	Improved outlook
Adjusted net interest & other non-op exp.	FY 2025	~$305M (prior)	~$290M	Lower
Adjusted Tax Rate	FY 2025	~18%	~18%	Maintained
Diluted Shares	FY 2025	~201M	~200M	Slightly lower
Dividend	Q2 2025	$0.24 declared	$0.24 payable Jul 31, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/Robotics strategy	ROSA leading in EU; pipeline updates incl. kinematic knee, posterior hip; broad suite incl. Think Surgical	Definitive agreement to acquire Monogram Technologies (semi/fully autonomous AI-driven robot); first fully autonomous surgery reported; semi-autonomous launch targeted early 2027, fully autonomous late 2027/early 2028	Accelerating
Supply chain/ERP	Exited 2024 at pre-ERP shipping levels; ERP challenges impacted H2 2024 comps	July strong; ERP comps favorable in H2; EMEA order timing shifts to Q3	Improving
Tariffs/Macro	FX headwind expected in 2025; tariffs exposure assessed; majority manufacturing in U.S.; limited China	Tariff headwind lowered to ~$40M (from $60–80M); FX now tailwind (~50 bps to revenue)	More favorable
Product performance	Oxford Cementless PMA; Z1/HAMMR; Persona Revision CE; S.E.T. strong	U.S. hips +5.2%; knees +1.7% sequential improvement; S.E.T. +4.9% organic; pricing +20 bps	Positive
Regional trends	U.S. leadership in ASC; Europe Persona Revision rollout	U.S. grew +2.3% organic; International +3.4% organic; large waitlists (4–6 months) in U.S. centers	Stable to improving
Regulatory/legal	EU MDR costs excluded from non-GAAP; litigation normalization	Continued EU MDR adjustments; Monogram regulatory path diligence ongoing	Ongoing execution
R&D/Innovation	>50 launches in 36 months; shoulder robotics (ROSA Shoulder)	“Magnificent Seven” commercialization driving H2 acceleration; ASC-focused innovation	Scaling
ASC penetration	ASC share approaching ~20% of U.S. sales; strong partnerships	Continued ASC momentum; Paragon 28 cross-sell opportunities in ASC	Expanding

Management Commentary

“We delivered a very solid quarter on both the top and bottom line… in spite of an 80 basis point selling day headwind… and significant delay in international orders which have now moved into the third quarter.”
“Strongest month so far in 2025… July” and “extremely confident on the second half acceleration,” supported by new products and order timing .
On strategy: “Priorities are people and culture, operational excellence, and innovation and diversification,” with disciplined M&A (Paragon 28, Monogram) to enter higher growth spaces .
On robotics: “First to the world technology… semi- and fully autonomous,” with specific differentiators (AI/ML planning, marketless tracking, remote capability), and flexible portfolio coexisting with ROSA and TMINI .
CFO on margins and cash: adjusted operating margin down YoY but improving sequentially; operating cash flow $378M; FCF $248M; working capital initiatives reducing inventory days .

Q&A Highlights

Organic growth cadence: Management expects organic growth “scratching 6%” in Q3, aided by no selling-day headwind, ERP comps, strong July, and EMEA order timing; high confidence in H2 acceleration .
Monogram acquisition: Confidence in regulatory path and commercialization timeline; EPS-neutral in pre-revenue phase via reallocation of non-core OpEx and leveraging existing R&D/regulatory platforms .
Margins bridge: Tariff headwind lowered to ~~$40M; interest expense outlook improved (~~$290M vs prior ~$305M); operational efficiency and FX tailwind support EPS guidance raise .
ASC strategy: ASC revenue share nearing ~20% in U.S.; Paragon 28 cross-sell opportunities cited (e.g., bunion procedures reimbursement), partnerships with STERIS/Hillrom/CBRE .
Paragon 28 integration: Preserve dedicated channel and leadership; minimal disruption; expected ~270 bps revenue contribution in 2025 .

Estimates Context

Zimmer Biomet exceeded S&P Global consensus for Q2 2025 on revenue and adjusted EPS; EBITDA slightly above expectations. Across the last three quarters, ZBH posted consistent beats on both revenue and EPS as the new product cycle ramps and pricing stays positive.

Q2 2025: Revenue actual $2.077B vs $2.056B consensus; Adjusted EPS actual $2.07 vs $1.976 consensus; EBITDA actual ~$677M vs ~$674M consensus.
Q1 2025: Revenue $1.909B vs $1.895B; Adjusted EPS $1.81 vs $1.770; EBITDA ~$595M vs ~$603M (slight miss).
Q4 2024: Revenue $2.023B vs $2.015B; Adjusted EPS $2.31 vs $2.293; EBITDA ~$734M vs ~$723M (beat).
All consensus and EBITDA values marked with * (Values retrieved from S&P Global).

Key Takeaways for Investors

Near-term: Raised FY25 adjusted EPS and tightened revenue growth guidance, plus lowered tariff headwind and FX tailwind, are positive revisions; management points to H2 acceleration with initial July strength and order timing—a constructive setup for Q3/Q4 prints .
Execution: New product cycle is translating to share gains in U.S. Hips (Z1/HAMMR) and improving trajectory in Knees (Persona OsseoTi, Oxford Cementless), while S.E.T. sustains mid to upper-single-digit organic growth .
Profitability: GAAP margins are pressured by acquisition-related and interest costs; however, adjusted gross/operating margins are improving sequentially and expected to peak in Q4; cash generation remains robust .
Strategy: Diversification and robotics optionality expand TAM and competitive positioning; Monogram adds autonomous capabilities while ROSA/TMINI maintain breadth—watch regulatory milestones and 2027 launch path .
ASC: ZBH’s ASC footprint and partnerships, combined with Paragon 28’s channel, should support sustained growth and mix/pricing benefits in outpatient settings .
Risk checks: Monitor tariff policy shifts, interest rate environment, and integration execution (Paragon 28), alongside international order cadence; management has embedded scenario planning into guidance .
Positioning: With consistent beats vs consensus and a visible H2 ramp narrative, the setup is favorable; investors should track adoption metrics (Oxford cementless, Z1), EMEA order timing, and margin progression into Q4 .

Sources: Press releases and 8-K: . Earnings call transcript: . (Estimates and EBITDA marked with * and retrieved from S&P Global.)

ZIMMER BIOMET HOLDINGS, INC. (ZBH)·Q2 2025 Earnings Summary