[Zimmer Biomet Holdings Q2 2026 Earnings Call] Zimmer Biomet Beats and Raises as Hip, Tech Sales Surge; U.S. Technology Revenue Jumps 53%

Zimmer Biomet delivered a beat-and-raise second quarter that underscored the early payoff from its aggressive sales-force restructuring and a pipeline of new products, sending shares higher in early trading. CEO Iván Tornos told investors the results came in “above our expectations,” driven by hip and technology momentum that offset lingering sluggishness in knees.

“We delivered almost 6% growth in hips, 5.9%,” Tornos said on the earnings call. “Our technology business, we invested a lot, added a ton of reps in the channel, grew 53% in the quarter.”

Financial Metric	Q2 2026	Q2 2025	Change
Net Sales (reported)	$2.177B	$2.076B	+4.8%
Organic Constant-Currency Growth	—	—	+4.0%
GAAP Diluted EPS	$1.03	$0.77	+33.8%
Adjusted Diluted EPS	$2.07	$2.07	0%
Adjusted Gross Margin	71.1%	72.3%	-120 bps
Adjusted Operating Margin	25.7%	27.8%	-210 bps
Pricing Headwind	-80 bps	—	—

Hip and Technology Fuel Beat

The hip franchise extended its winning streak, with constant-currency growth of 5.1% globally and a robust 5.9% in the U.S. Tornos pointed to the “hip triple play”—the Z1 triple-taper stem (now over 40% of U.S. systems and nearing 100,000 implants worldwide), the HAMMR impaction device (used in more than 25% of U.S. primary hip cases), and OrthoGrid, the AI-based navigation system that had its strongest quarter ever. OrthoGrid’s first-half 2026 case volume already matched all of 2025.

Even more dramatic was the surge in technology and data, which encompasses robotics, surgical instruments, and bone cement. The segment grew 21.5% overall, with U.S. technology sales rocketing 53%. Record capital sales were fueled by ROSA with OptiPlan, the TMINI cordless handheld, and the first contributions from the new ROSA Shoulder robot. “We have the most comprehensive suite of solutions,” Tornos said, noting that only about 20% of U.S. surgeons currently use robotics, leaving a large untapped market.

Outside the U.S., the iodine-coated hip launch in Japan is outperforming. Tornos described demand as exceeding supply and said the company is converting both existing and competitive accounts at a 40% price premium. “The launch has gone much better than expected,” he said, adding that Zimmer Biomet is pursuing pathways to bring the infection-fighting technology to additional markets, including the U.S.

S.E.T. Accelerates, Knees Tread Water

The S.E.T. (sports, extremities, trauma) portfolio accelerated to 3.4% organic constant-currency growth, a 180-basis-point improvement from Q1. Paragon 28, acquired in April 2025, grew mid-teens, while craniomaxillofacial and thoracic (CMFT) posted double-digit gains for yet another quarter, led by sternal closure products. Upper extremities delivered high-single-digit growth, but those gains were partially offset by continued softness in trauma and restorative therapies. Management expects S.E.T. to strengthen further in the second half as sports medicine supply constraints ease.

Knees, however, were essentially flat, rising just 0.1% constant currency. U.S. knee growth of 1.4% was erased by a 1.5% international decline, with China and core emerging markets the main drags. Tornos expressed confidence that the specialization work in the U.S. and go-to-market changes abroad will lead to improved knee performance.

U.S. Sales Transformation: “Going Better Than Expected”

The company’s high-stakes shift to a dedicated, specialized sales force is on track and generating less disruption than initially feared. Tornos said stage one (lowest-risk) is complete, and stage two is underway, with the full transition to a specialized structure targeted for the end of 2027. Attrition is at multi-year lows, engagement is high, and the firm has added about 200 technology reps while locking in its top independent distributors with retention agreements.

“We’re not going to be penny-wise and pound-foolish,” Tornos said, explaining the deliberate SG&A investments. “This is not a cost-savings strategy… This is a growth strategy.” He believes the investments in 2026 will yield better results in 2027, when the transformation will be substantially complete.

Raised Outlook and Buybacks

With a stronger-than-expected first half, management lifted its full-year organic constant-currency revenue growth target to 2.25%–3.25% (from 1%–3%) and reported sales growth to 3.9%–4.9%. Adjusted EPS guidance rose to $8.47–$8.59. The company plans to buy back up to $1 billion in shares this year, up $250 million, and expects about 193 million diluted shares outstanding. Gross margin is still seen around 71%, while operating margin is now expected to decline a little more than 50 basis points because of the channel investments.

Guidance Metric	New 2026 Range	Prior Range
Organic CC Revenue Growth	2.25% – 3.25%	1% – 3%
Reported Revenue Growth	3.9% – 4.9%	2.5% – 4.5%
Adjusted EPS	$8.47 – $8.59	$8.40 – $8.55
Gross Margin	~71%	~71%
Operating Margin Change	down >50 bps	(implied)
Share Repurchases	up to $1B	up to $750M

Q&A: Analysts Dig into Market Health and M&A

Analysts pressed on whether the orthopedic reconstructive market is slowing. Wells Fargo’s Larry Biegelsen noted that aggregate data suggest a deceleration, but Tornos pushed back, reiterating that quarter-to-quarter swings are normal and patient demand metrics—waiting lists, cancellation rates, referral cycles—remain stable. He pegged the overall market at 4%–5% growth and emphasized that Zimmer Biomet’s exposure to ACA exchanges is low single-digit, with Medicare as its largest payer.

On the topic of multiple robotic platforms, J.P. Morgan’s Robbie Marcus questioned the cost of supporting so many systems. Tornos responded that Zimmer Biomet positions itself as a technology company, not a robotic one, and offers a range of solutions—CT-based and imageless, large and portable—to meet surgeon preferences. “Right now, we like the optionality… 53% growth in the second quarter tells us we’re doing something right,” he said.

When asked about M&A strategy, Tornos outlined three vectors: higher-growth recon segments, higher-growth S.E.T. areas, and eventually adjacent spaces. Deals would be up to $2 billion, accretive to revenue and WAMGR immediately, EPS accretive by year two, and ROIC above 10% by year five, using the Paragon 28 integration as a template.

The company is still searching for a permanent CFO, but Tornos praised interim CFO Paul Stellato, a four-year veteran, and said there is no rush. He seeks an operator-focused leader with value-creation experience and street credibility.

Looking Ahead

With the sales force transformation progressing ahead of schedule and a packed product pipeline—including an imminent Monogram 510(k) filing for knees and over 50 new products in the next 36 months—management signaled that 2027 should be a stronger year as China comps ease and the new commercial structure takes hold. “The boldest chapters for this company remain ahead,” Tornos said, sticking to his philosophy: “say less, do more.”