Zimmer Biomet is a global medical technology leader that designs, manufactures and markets orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; craniomaxillofacial and thoracic products; bone cement; surgical products; and a suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence. The company operates in the orthopedics and broader musculoskeletal care industry, which is described as highly competitive. The company's primary customers include orthopedic surgeons, neurosurgeons, and other specialists, healthcare institutions, stocking distributors, healthcare dealers and healthcare purchasing organizations or buying groups. Consignment sales represented approximately 85 percent of net sales in 2025.

In the global markets for its knees, hips, and S.E.T. products, the company's major competitors include Johnson & Johnson MedTech, Stryker Corporation and Smith & Nephew plc. There are smaller competitors in these product categories as well that focus on smaller subsegments of the industry. Competition within the industry is primarily based on technology, innovation, quality, reputation, customer service and pricing. A key factor in the company's continuing success in the future will be its ability to develop new products and technologies and improve existing products and technologies.

The company generates revenue through the design, manufacture and marketing of its products, which are sold through two principal channels: direct to healthcare institutions such as hospitals and ambulatory surgery centers, and through stocking distributors and healthcare dealers. With direct channel accounts and some healthcare dealers, inventory is generally consigned to sales agents or customers. Consignment sales represented approximately 85 percent of net sales in 2025. No individual customer accounted for more than 2 percent of net sales for 2025.

The company's product categories include Knees, Hips, S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic), and Technology & Data, Bone Cement and Surgical. For the year ended December 31, 2025, Knees net sales were $3,322.3 million ¹, Hips net sales were $2,093.5 million ², S.E.T. net sales were $2,150.2 million ³, and Technology & Data, Bone Cement and Surgical net sales were $665.6 million ⁴. Within the S.E.T. category, sports medicine products represented 12 percent of S.E.T. net sales in 2025 ⁵, biologics products represented 5 percent ⁶, foot and ankle products represented 12 percent ⁷, upper extremities products represented 30 percent ⁸, trauma products represented 20 percent ⁹, and CMFT products represented 21 percent ¹⁰. Significant knee brands include the Persona Knee, NexGen Knee Implants, Vanguard Knee, and Oxford Partial Knee. Significant hip brands include the Taperloc Hip System, Avenir Complete Hip System, Z1 Hip Implant, Arcos Modular Hip System, and G7 Acetabular System. The ROSA Robot is utilized in knee, hip, and shoulder procedures. The ZBEdge Platform connects robotic and digital technologies together to collect data before, during and after surgery.

On April 21, 2025, the company completed the acquisition of Paragon 28, Inc. ¹¹. On October 7, 2025, the company completed the acquisition of Monogram Technologies Inc. ¹². In 2025, the company executed share repurchases under its repurchase program in an aggregate amount of $487.0 million ¹³. In February, May, August and December 2025, the Board of Directors declared cash dividends of $0.24 per share ¹⁴. The company issued senior notes for proceeds of $2,492.1 million ¹⁵ and redeemed $1,463.0 million of senior notes ¹⁶. In December 2025, management decided on a plan to discontinue selling certain products by 2032 and recognized a charge of approximately $170 million ¹⁷ to reduce inventory and instruments to their net realizable value.

For the year ended December 31, 2025, net sales increased 7.2 percent ¹⁸ when compared to 2024. Net earnings were $705.1 million ¹⁹ in 2025 compared to $903.8 million ²⁰ in 2024. The Paragon 28 acquisition had a positive impact on net sales growth of 2.5 percent ²¹ in 2025. Changes in foreign currency exchange rates had a positive effect of 0.8 percent ²² on year-over-year sales in 2025. Operating profit was $1,098.1 million ²³ in 2025 compared to $1,285.7 million ²⁴ in 2024. Cash flows provided by operating activities were $1,697.1 million ²⁵ in 2025.

Management expects year-over-year net sales growth of 2.5 percent to 4.5 percent ²⁶ in 2026, to be driven by a combination of market growth, new product introductions, the Paragon 28 acquisition and positive effects of changes in foreign currency exchange rates, partially offset by the expected impact from changes to the go-to-market strategy and execution in the U.S. and certain other international markets, as well as price declines. The company estimates that the Paragon 28 acquisition will contribute an additional 1.0 percent ²⁷ to the year-over-year net sales growth until it eclipses the one year anniversary of deal closing in April 2026. Based on foreign currency exchange rates at the end of 2025, the company expects foreign currency to have a 0.5 percent ²⁸ positive impact on year-over-year net sales growth.

The company is converting substantial portions of its U.S. sales force from independent distributors and sales representatives to its employees in a multi-year initiative. The company is also increasing product category specialization and focus across its U.S. sales force. Additionally, the company is making certain changes to its sales force and go-to-market models in certain other countries in an effort to optimize commercial strategies and improve performance on a consistent basis in those markets. The company expects revenue performance to be inconsistent throughout the transition to this new model in certain emerging markets.

Management estimates operating profit will increase in 2026 when compared to 2025 due to higher net sales, leverage from fixed operating expenses, ongoing savings from restructuring plans, non-recurrence of inventory and instrument charges related to certain product lines expected to be discontinued and lower employee termination and other charges from restructuring plans. However, the company expects that these favorable items may be partially offset by the impact from inflation, investments in the U.S. commercial sales channel, higher net interest expense and a higher estimated effective tax rate due to favorable 2025 adjustments that are not expected to recur.

The company is executing on a 2025 Restructuring Plan, 2023 Restructuring Plan, 2021 Restructuring Plan and a 2019 Restructuring Plan. The 2025 Restructuring Plan is expected to result in total pre-tax charges of approximately $155 million ²⁹ by the end of 2027, of which approximately $137 million ³⁰ was incurred through December 31, 2025. The company expects to reduce gross annual pre-tax operating expenses by approximately $175 million ³¹ relative to the 2024 baseline expenses by the end of 2027 as program benefits under the 2025 Restructuring Plan are realized. The 2023 Restructuring Plan resulted in total pre-tax charges of $115 million ³² and the company estimates gross annual pre-tax operating expenses were reduced by $175 million to $200 million ³³ relative to the 2023 baseline expenses by the end of 2025. The 2021 Restructuring Plan resulted in $169 million ³⁴ of total pre-tax charges and the company estimates gross annual pre-tax operating expenses were reduced by approximately $190 million ³⁵ relative to the 2021 baseline expenses by the end of 2024. The 2019 Restructuring Plan resulted in total pre-tax restructuring charges of $393 million ³⁶ and the company estimates the program resulted in a reduction of gross annual pre-tax operating expenses of approximately $180 million ³⁷ relative to the 2019 baseline expenses by the end of 2025.

The company expects to continue paying cash dividends on a quarterly basis; however, future dividends are subject to approval of the Board of Directors and may be adjusted as business needs or market conditions change. In May 2024, the Board of Directors authorized a $2.0 billion ³⁸ share repurchase program effective May 29, 2024, with no expiration date. As of December 31, 2025, $770.2 million ³⁹ remained authorized under this program. On February 9, 2026, the Board of Directors authorized a $1.5 billion ⁴⁰ share repurchase program effective February 9, 2026, with no expiration date, and terminated the existing May 2024 share repurchase program.

The company expects that favorable items for 2026 may be partially offset by the impact from inflation, investments in the U.S. commercial sales channel, higher net interest expense and a higher estimated effective tax rate due to favorable 2025 adjustments that are not expected to recur. The company expects year-over-year net sales growth of 2.5 percent to 4.5 percent ⁴¹ in 2026 to be partially offset by the expected impact from changes to the go-to-market strategy and execution in the U.S. and certain other international markets, as well as price declines. These expected impacts, combined with the uncertain timing of incentivized stocking orders and capital sales, could cause fluctuations in quarterly results.

Management's message emphasizes that the company expects year-over-year net sales growth of 2.5 percent to 4.5 percent ⁴⁸ in 2026, driven by market growth, new product introductions, the Paragon 28 acquisition and positive effects of changes in foreign currency exchange rates, partially offset by the expected impact from changes to the go-to-market strategy and execution in the U.S. and certain other international markets, as well as price declines. Management estimates operating profit will increase in 2026 when compared to 2025 due to higher net sales, leverage from fixed operating expenses, ongoing savings from restructuring plans, non-recurrence of inventory and instrument charges related to certain product lines expected to be discontinued and lower employee termination and other charges from restructuring plans. The strategic priorities emphasized include executing on the multi-year initiative to convert substantial portions of the U.S. sales force from independent distributors and sales representatives to employees, rationalizing the product portfolio to streamline operations and enhance focus on strategic offerings, and continuing to pursue growth opportunities through acquisitions such as Paragon 28 and Monogram Technologies Inc.

For the year ended December 31, 2025, total net sales were $8,231.5 million ⁴⁹ compared to $7,678.6 million ⁵⁰ in 2024. Net earnings of Zimmer Biomet Holdings, Inc. were $705.1 million ⁵¹ in 2025 compared to $903.8 million ⁵² in 2024. Diluted earnings per share were $3.55 ⁵³ in 2025 versus $4.43 ⁵⁴ in 2024. Operating profit was $1,098.1 million ⁵⁵ in 2025 compared to $1,285.7 million ⁵⁶ in 2024. The effective tax rate was 15.1 percent ⁵⁷ in 2025 compared to 12.7 percent ⁵⁸ in 2024. Cash flows provided by operating activities were $1,697.1 million ⁵⁹ in 2025 compared to $1,499.4 million ⁶⁰ in 2024. Total indebtedness at December 31, 2025 was $7.5 billion ⁶¹. Cash and cash equivalents were $591.9 million ⁶² as of December 31, 2025. The decline in net earnings was driven by inventory and instrument charges of approximately $170 million ⁶³ related to certain product lines intended to be discontinued; costs related to the acquisition of Paragon 28 and Monogram, including acquisition-related costs and higher interest expense incurred for debt borrowed for the acquisitions; U.S. tariffs; higher performance-related compensation; and investments made to direct-to-patient marketing, medical education and information technology. These unfavorable items were partially offset by the net sales increase, a favorable mix shift to higher margin products and markets, favorable adjustments related to contingent consideration for acquisitions, gains recognized on equity investments in 2025 compared to losses in 2024, lower restructuring costs due to the timing of restructuring programs, and lower litigation-related charges. For segment performance, the Americas operating segment net sales were $5,144.6 million ⁶⁴ in 2025, EMEA net sales were $1,828.8 million ⁶⁵, and Asia Pacific net sales were $1,258.1 million ⁶⁶.

The company faces significant risks from its multi-year initiative to convert substantial portions of its U.S. sales force from independent distributors and sales representatives to employees, which could result in operational disruptions, increased costs, reduced sales, and loss of key sales personnel to competitors. The company's substantial indebtedness of $7.5 billion ⁴² at December 31, 2025, with debt service principal obligations of $0.6 billion ⁴³ during the next 12 months, could require a large portion of cash flow from operations for debt servicing, limiting funds for other corporate requirements. The company is subject to risks from changes in foreign currency exchange rates, as a sensitivity analysis indicated that if the U.S. Dollar uniformly strengthened or weakened by 10 percent relative to all currencies, the fair value of foreign currency exchange forward contracts would affect earnings in a range of a decrease of approximately $109 million ⁴⁴ to an increase of approximately $107 million ⁴⁵ before income taxes. The company also faces risks from the potential for material impairment of its $9.9 billion ⁴⁶ in goodwill and $4.7 billion ⁴⁷ of intangible assets, as any write-off of a material portion would negatively affect operating results. Additionally, the company is exposed to risks from the potential characterization of its independent agents and distributors as employees, which could result in substantial additional tax and other liabilities.