Zimmer Biomet beats Q1 2026 estimates, raises EPS and FCF guidance, expects lower Q2 margins

 

Zimmer Biomet beats Q1 2026 estimates, raises EPS and FCF guidance, expects lower Q2 margins on investments, acquisitions

• Q1 revenue $2.09B (+9% YoY), beating estimates for the quarter.
• Q1 organic constant-currency revenue +2.9%, at top of 2026 guidance range.
• Adjusted EPS $2.09 (+15% YoY), including $0.20 tariff-related upside vs expectations.
• Maintained 2026 organic revenue growth outlook 1–3% despite strong start and healthy markets.
• Raised 2026 EPS guidance to $8.40–$8.55 and FCF growth to 9–11%.
• Expects Q2 2026 operating margins about 200 basis points lower YoY from higher commercial investments and acquisition-related dilution.
• U.S. sales +3.2%; knees +2.2% lag market amid account losses and product rationalization.
• Technology portfolio strong: robotics, data, and new implants grew double digits; technology +~30%.
• International growth modest at 2.5% amid distributor model changes; expecting mid-single-digit 2H rebound.
• Multi-year U.S. go-to-market shift progressing; 1099 reps reduced, productivity and specialization improving.
• Paragon 28 accelerating toward double-digit growth; Monogram robot on track for 2027 launches.
• CFO Upadhyay departing; interim CFO appointed, adding some leadership transition uncertainty.
• Main concern: execution risk around multi-year salesforce and distributor transitions, particularly in knees and international.
• Strong quarter, driven by technology-led growth and tariff-boosted margins despite knee and transition headwinds.

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