Zimmer Biomet Reports 9.3% Net Sales Increase to $2.09 Billion in Q1 2026

Zimmer Biomet Holdings, Inc. reported a net sales increase of 9.3% for the three months ended March 31, 2026, reaching $2,086.7 million compared to $1,909.1 million in the same period last year. The growth was attributed to several factors, including the acquisition of Paragon 28, which contributed 3.9% to sales, favorable foreign currency exchange rates adding 2.5%, and increased customer purchases towards the end of the quarter. Net earnings for the period rose to $238.1 million, up from $182.0 million in the prior year, reflecting improved sales performance and a favorable adjustment related to anticipated U.S. tariff refunds.

In terms of operational metrics, the company saw significant changes in its cost structure. The cost of products sold, excluding intangible asset amortization, decreased as a percentage of net sales to 27.6% from 28.8% year-over-year, aided by a $30 million adjustment related to tariff refunds and more efficient inventory management. Research and development expenses also decreased, reflecting the completion of initial compliance costs with the European Union Medical Device Regulation. However, selling, general, and administrative expenses increased due to higher variable costs associated with increased sales and investments in the sales force.

Geographically, the U.S. market generated $1,209.4 million in sales, an 8.6% increase from the previous year, while international sales rose by 10.3% to $877.4 million. The growth in the U.S. was bolstered by the Paragon 28 acquisition and strong performance in the hips and S.E.T. product categories. The international segment benefited from market growth and favorable currency fluctuations, with the Paragon 28 acquisition contributing 1.9% to international sales growth.

Looking ahead, Zimmer Biomet anticipates a year-over-year net sales growth of 2.5% to 4.5% for 2026, driven by market expansion, new product launches, and continued contributions from the Paragon 28 acquisition. However, the company also expects challenges from changes in its go-to-market strategy and potential price declines. Operating profit is projected to increase due to higher sales and ongoing savings from restructuring initiatives, although inflation and increased interest expenses may offset some of these gains. The company remains focused on executing its 2025 Restructuring Plan, which aims to reduce operating expenses significantly by the end of 2027.