Zimmer Biomet Q4 EPS $2.42, Sales $2.24B Beat Estimates; Margins Contract
Zimmer Biomet posted Q4 adjusted EPS of $2.42, beating estimates by 1.7% and up 4.8% year-over-year, with net sales of $2.24 billion rising 10.9% and topping forecasts by 1.9%. All product segments grew, but adjusted gross margin fell 632 bps to 64.7% as costs surged.
1. Q4 Earnings and Revenue Outperformance
Zimmer Biomet delivered adjusted EPS of $2.42 in Q4, up 4.8% year-over-year and 1.7% above estimates, while GAAP EPS was $0.70. Net sales reached $2.24 billion, rising 10.9% (9.2% on a constant currency basis) and surpassing forecasts by 1.9%.
2. Segment and Geographic Performance
U.S. sales totaled $1.31 billion, an 11.1% increase, while international revenue grew 10.6% (6.6% at constant currency) to $931.2 million. Knees unit sales rose 8.6% to $911 million, hips grew 6.8% to $555.4 million, S.E.T. jumped 20.1% to $587.6 million, and Technology & Data/Other reached $189.8 million, up 8.7%.
3. Margin Contraction and Cost Pressures
Adjusted gross margin contracted 632 basis points to 64.7% as cost of products sold surged 35.1%. SG&A expenses climbed 16.8% to $872.3 million and R&D rose 9.6% to $118.8 million, driving adjusted operating margin down 821 basis points to 20.5%.
4. 2026 Guidance Outlook
The company forecasts 2026 revenue growth of 2.5%–4.5%, targeting $8.41 billion (3.1% year-over-year). Adjusted EPS guidance is set at $8.30–$8.45, compared with current consensus of $8.54.