Zimmer Biomet's Q3 2025: Contradictions Emerge on Guidance, Restorative Therapies, and Innovation

Business Commentary:

• Revenue Growth and Strategic Product Launches:
• Zimmer Biomet reported 5% growth on an organic constant currency basis for Q3.

• The growth was driven by new product launches, such as the Persona OsseoTi knee implant and Z1 triple-taper stem, contributing to increased adoption and positive market reception.

• Regional Performance Variability:

• The U.S. business grew 5.6%, while there was a 120 basis point loss in international markets, specifically in Eastern Europe and Latin America, and noncore segments like restorative therapies.

• The international weakness was attributed to distributor challenges and unexpected cancellations, while the U.S. performance benefited from strong demand for new products and robotic placements.

  

• Innovation and Product Pipeline:

• The company's robotics and navigation strategy contributed to a 20.3% increase in U.S. technology and data sales.

• This was driven by increased adoption of comprehensive technology solutions and enhanced utilization of robotics, such as the U.S. ROSA accounts performing over half of their knee implants robotically.

• Leadership and Governance Changes:

• Zimmer Biomet is implementing leadership and governance changes in international businesses due to headwinds experienced throughout 2025.
• These changes are part of efforts to address regional challenges and align with the company's strategic priorities of people and culture, operational excellence, and innovation diversification.

Contradiction Point 1

Guidance Philosophy and Growth Expectations

It involves changes in the company's approach to external guidance and growth expectations, which are crucial for investor expectations and strategic planning.

How should we think about guidance philosophy after missing the third-quarter growth target, and what are your thoughts on 2026? - Robert Justin Marcus (JPMorgan Chase & Co.)

2025Q3: We will be more measured in external guidance moving forward. - Ivan Tornos(CEO)

Is the 6% Q3 growth organic, excluding M&A?Will 2026 revenue growth match or exceed 2025's? - Travis Lee Steed (Bank of America)

2025Q2: For 2026, we're not providing specifics, but we expect the momentum from 2025 investments to carry forward. - Ivan Tornos(CEO)

Contradiction Point 2

Restorative Therapies Market Dynamics

It highlights differing perspectives on the market dynamics and performance of the Restorative Therapies segment, which impacts the company's strategic focus and financial outlook.

What is your guidance approach after missing the Q3 growth target, and what are your 2026 plans? - Robert Justin Marcus (JPMorgan Chase & Co.)

2025Q3: Softness in Restorative Therapies. - Ivan Tornos(CEO)

Can you provide more detail on end market trends? Are orthopedic markets slowing? - David Harrison Roman (Goldman Sachs)

2025Q2: Total joint customers and proceeding volume was positive for the quarter. - Ivan Tornos(CEO)

Contradiction Point 3

Innovation and Market Share Impact

It involves differing assessments of the innovation cycle's impact on market share and revenue growth, which are critical for long-term strategic planning and investor expectations.

Can you discuss U.S. knee market dynamics and share loss? - Matthew O'Brien (Piper Sandler & Co.)

2025Q3: The focus remains on the innovation cycle to address share loss, with expectations to see benefits in 2026. - Ivan Tornos(CEO)

Can you summarize U.S. and global knee growth trends and recent changes compared to prior quarters? - Ryan Benjamin Zimmerman (BTIG)

2025Q2: We're encouraged by the U.S. knee growth acceleration. We're focused on direct-to-patient initiatives and leadership changes to sustain growth. - Ivan Tornos(CEO)