ZBH · Q2 2026 Earnings

Bullish

Zimmer Biomet

Reported August 5, 2026

30-second summary

Zimmer Biomet printed Q2 FY2026 revenue of $2.177B (+4.8% YoY, organic CC +4.0%) and adjusted EPS of $2.07 (beating consensus of $2.01 by 3.0% and revenue of $2.14B by 1.7%), and used the print to raise every FY2026 revenue guide (organic CC low end +125bps to 2.25–3.25%, reported +140bps at the low end to 3.9–4.9%) and lift adjusted EPS by seven cents at the low end to $8.47–$8.59. The organic acceleration to 4.0% blew through the Q1 watch-list threshold of 3% that would have signaled a raise, and the U.S. business grew +5.6% reported — the Salesforce transition is now measurably a productivity engine, not a drag. The tell to sit with: management dropped the 9–11% FCF growth guide without replacing it, the same quarter it authorized a $1B share buyback.

Headline numbers

EPS

Q2 FY2026

$2.07

+3.0% vs est.

Revenue

Q2 FY2026

$2.18B

+4.8% YoY

+1.7% vs est.

Free cash flow

Q2 FY2026

$0.31B

Operating margin

Q2 FY2026

15.0%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$2.18B	$2.08B	+4.8%	$2.09B	+4.3%
EPS	$2.07	$2.07	+0.0%	$2.09	-1.0%
Operating margin	15.0%	14.4%	+60bps	17.9%	-290bps
Free cash flow	$0.31B	—	—	$0.25B	+25.3%

Guidance

Company raised full-year FY2026 EPS and revenue guidance across all metrics (reported, constant currency, and organic), signaling confidence in sustained operational momentum.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted Diluted EPS	FY2026	$8.40 - $8.55	$8.47 - $8.59	+$0.07 at low end, +$0.04 at high end	Raised
Reported Revenue Change	FY2026	2.5% - 4.5%	3.9% - 4.9%	+140 bps at low end, +40 bps at high end	Raised
Constant Currency Revenue Change	FY2026	2.0% - 4.0%	3.4% - 4.4%	+140 bps at low end, +40 bps at high end	Raised
Organic Constant Currency Revenue Change	FY2026	1.0% - 3.0%	2.25% - 3.25%	+125 bps at low end, +25 bps at high end	Raised
Free Cash Flow Growth	FY2026	9% - 11%	Withdrawn — no replacement	—	Withdrawn

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Knees	$0.829B	$0.826B	+0.4%
Hips	$0.563B	$0.536B	+5.0%
S.E.T.	$0.586B	$0.551B	+6.4%
Technology & Data, Bone Cement and Surgical	$0.199B	$0.165B	+20.8%
Knees Organic Constant Currency Growth	0.1%	—	—
Hips Organic Constant Currency Growth	5.1%	—	—
Technology & Data Segment Growth	21.5%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
United States	$1.24B	$1.174B	+5.6%
International	$0.937B	$0.904B	+3.7%
Organic Constant Currency Revenue Growth	4.0%	2.8%	—
Constant Currency Revenue Growth	4.7%	5.4%	—
Operating Profit	$326.1 million	—	—
Operating Cash Flow	$447.9 million	—	—
Share Repurchase Authorization	$1.0 billion	—	—

Management tone

Tone analysis limited to press-release language; no live transcript was available for this brief.

Q4 2025 "measured guidance" reset → Q1 2026 "confident, moving in the right direction" → Q2 2026 "healthy underlying markets, go-to-market changes progressing as planned."

Three quarters ago management issued an FY2026 organic CC guide of 1–3% and named the Salesforce transition as the gating risk. This quarter that same organic CC guide has been raised to 2.25–3.25%, with Q2 already printing 4.0% — meaning the low end of the raised range is still 175bps below the actual Q2 pace. The tonal shift is that management is deliberately not extrapolating a print that would justify a more aggressive raise. Verb choice moved from Q4's "contemplates" through Q1's "confident" to Q2's operational-status framing of "progressing as planned."

The FCF disclosure withdrawal is the tonal signal that most needs a transcript to fully read. One quarter ago FCF was one of two headline lifts (EPS + FCF); this quarter it is absent from forward disclosure entirely. Paired with the $1B repurchase authorization, the implicit reframing is that capital-return execution is now the metric management wants investors to track, not cash generation itself. If underlying FCF conversion is stable, this is a capital allocation reprioritization; if FCF conversion is weakening, the buyback authorization is providing a distraction. The press release does not resolve which.

The Knees narrative has clearly shifted from Q1's "managed decline with upside mix" to something closer to outright decline: +0.1% organic in Q2 versus the Magnificent Seven launch cycle that was supposed to drive acceleration. The reported line went from +8.6% in Q4 2025 to +4.5% in Q1 2026 to +0.4% in Q2 2026 — a two-quarter, 820bps compression. The Tech & Data organic acceleration is what's carrying the raise, not Knees.

Answers to last quarter's watch list

Q2 FY2026 organic CC print and whether the "roughly consistent" framing holds. Q2 organic CC printed 4.0%, materially above the >3% threshold that Q1 watch list identified as raise-worthy. The Q1 framing of "roughly consistent" growth throughout 2026 has been superseded by outright acceleration from Q1's 2.9% to Q2's 4.0%. Status: Resolved positively.

Paragon 28 disclosed organic contribution toward "double-digit" 2026 commitment. The press release does not disclose Paragon 28's specific organic contribution this quarter. S.E.T. reported +6.4% (down from Q1's +19.5% as Paragon anniversaries), but the standalone Paragon organic figure is not called out. The commitment remains falsifiable but not yet publicly resolved. Status: Continue monitoring.

Adjusted gross margin sustainability vs. CFO's ~71% FY framing. Adjusted gross margin was not disclosed in the extracted press-release fields for Q2. Adjusted operating margin printed 15.0%, but the gross margin line requires the transcript. Status: Continue monitoring.

U.S. organic CC growth deceleration curve. U.S. reported +5.6% versus Q1's +8.6%, but the Q2 organic CC figure for the U.S. specifically is not disclosed in the extraction. Reported deceleration is largely explained by Paragon 28 anniversary; the +5.6% reported print is broadly consistent with a stable-to-improving underlying organic trajectory. Status: Continue monitoring.

International H2 mid-single-digit organic commitment progress. International reported +3.7% in Q2, down from +10.3% in Q1 (which had a large FX tailwind). Organic CC specifically for International is not disclosed in the extraction. The mid-single-digit H2 commitment cannot yet be resolved from press-release data alone. Status: Continue monitoring.

CFO succession. The press release does not disclose a permanent CFO appointment. Paul Stellato's interim status appears to persist. Status: Continue monitoring.

Tariff exposure language, IEEPA status, and Section 232 investigation. Not addressed in the extracted press-release content. Status: Continue monitoring.

What to watch into next quarter

Whether FCF growth guidance returns. The single most important watch item into Q3. If FY FCF growth guidance is reinstated at or above the prior 9–11% range, the withdrawal was disclosure hygiene tied to the buyback rollout. If it does not return — or returns at a lower range — underlying cash conversion is likely weaker than the EPS raise suggests.

Knees organic CC print. Q2 printed +0.1% organic, a two-quarter compression from Q4 2025's +8.6% reported. Watch whether Q3 stabilizes at or above +1% organic; a print below zero would confirm legacy runoff is outpacing Magnificent Seven ramp and put the reported segment growth line at risk.

Q3 FY2026 organic CC vs. the implied FY range. The raised FY organic CC of 2.25–3.25% implies H2 organic in the low-2% range against a Q2 print of 4.0%. Either Q3/Q4 decelerates materially or the FY range is again raised at Q3 — the sequential math is the tell.

$1B share repurchase pace. With the authorization new this quarter, the Q3 execution pace will signal whether it is a real-time capital return program or a shelf authorization. Aggressive buyback in Q3 alongside the withdrawn FCF guide would be a notable configuration.

Paragon 28 explicit organic growth disclosure. The Q4 2025 "double-digit" commitment remains unresolved through two quarters of FY2026. If Paragon organic is not called out on the Q3 call with a specific number, the commitment is at risk of quiet abandonment.

CFO succession resolution. Two full quarters into interim status; a permanent appointment or public search update is overdue.

Adjusted gross margin print. Q1 was 73.0% inflated by tariff benefits; CFO framed FY at ~71%. Q2 disclosure is pending transcript; Q3 needs to confirm the ~71% cadence is holding absent tariff tailwinds.

Sources

Zimmer Biomet Q2 FY2026 Press Release (SEC EX-99.1): https://www.sec.gov/Archives/edgar/data/1136869/000119312526333761/zbh-ex99_1.htm
Tapebrief prior-quarter briefs: ZBH Q4 FY2025, Q1 FY2026.

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.