Zimmer Biomet's Q2 2025: Unpacking Contradictions in Pricing, Growth, and Integration Strategies

Pricing and tariff impact, ROSA and U.S. Knee growth, tariff impact and mitigation, ERP impact and revenue headwinds, and Paragon 28 integration and growth strategy are the key contradictions discussed in Zimmer Biomet's latest 2025Q2 earnings call.



Revenue and Earnings Growth:
- Zimmer Biomet delivered a solid quarter with sales growth of 2.8% on an organic constant currency basis.
- The growth was despite an 80 basis point selling day headwind and a significant delay in international orders.
- The company attributed this to strong performance in U.S. Hips and Knees, as well as growth in their S.E.T. segment.

Strategic Priorities and M&A:
- Zimmer Biomet continued to focus on its three strategic priorities: people and culture, operational excellence, and innovation and diversification.
- The company announced the acquisition of Monogram Technologies, further leveraging M&A to diversify into higher-growth segments.
- The acquisition aligns with their strategy to expand into semi-autonomous and fully autonomous robotics.

Operational and Financial Performance:
- Despite diluting from the Paragon 28 transaction, Zimmer Biomet reported adjusted earnings per share of $2.07, up 3% year-over-year.
- The company reported strong cash generation, with operating cash flows of $378 million and free cash flow of $248 million.
- This was driven by successful working capital initiatives and reduced days on hand.

Outlook and Confidence:
- Zimmer Biomet raised its 2025 adjusted earnings per share guidance to $8.10 to $8.30.
- The company expressed confidence in delivering this forecast, driven by anticipated sales acceleration in the second half, increased operational efficiency, and favorable foreign exchange effects.