Medical device company Zimmer Biomet (NYSE: ZBH) announced better-than-expected revenue in Q2 CY2026, with sales up 4.8% year on year to $2.18 billion. Its non-GAAP profit of $2.07 per share was 3% above analysts’ consensus estimates.
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Zimmer Biomet (ZBH) Q2 CY2026 Highlights:
- Revenue: $2.18 billion vs analyst estimates of $2.13 billion (4.8% year-on-year growth, 2% beat)
- Adjusted EPS: $2.07 vs analyst estimates of $2.01 (3% beat)
- Management slightly raised its full-year Adjusted EPS guidance to $8.53 at the midpoint
- Operating Margin: 15%, in line with the same quarter last year
- Free Cash Flow Margin: 21.6%, up from 11.9% in the same quarter last year
- Constant Currency Revenue rose 4.7% year on year (2.8% in the same quarter last year)
- Market Capitalization: $18.54 billion
"We delivered strong second quarter results with solid top- and bottom-line performance and continued progress on our key growth drivers and commercial transformation," said Ivan Tornos, Chairman, President and CEO of Zimmer Biomet.
Company Overview
With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE: ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Zimmer Biomet’s sales grew at a tepid 3.7% compounded annual growth rate over the last five years. This was below our standard for the healthcare sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Zimmer Biomet’s annualized revenue growth of 6.3% over the last two years is above its five-year trend, which is encouraging. 
We can dig further into the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 5.4% year-on-year growth. Because this number aligns with its reported revenue growth, we can see that foreign exchange has not had a meaningful impact on topline. 
This quarter, Zimmer Biomet reported modest year-on-year revenue growth of 4.8% but beat Wall Street’s estimates by 2%.
Looking ahead, sell-side analysts expect revenue to grow 2.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.
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Adjusted Operating Margin
Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.
Zimmer Biomet has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 27.2%.
Looking at the trend in its profitability, Zimmer Biomet’s adjusted operating margin decreased by 3 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 3.8 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.
This quarter, Zimmer Biomet generated an adjusted operating margin profit margin of 16.1%, down 11.7 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Zimmer Biomet’s unimpressive 2.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
In Q2, Zimmer Biomet reported adjusted EPS of $2.07, in line with the same quarter last year. This print beat analysts’ estimates by 3%. Over the next 12 months, Wall Street expects Zimmer Biomet’s full-year EPS to grow 2.9% from $8.48 to $8.72.
Key Takeaways from Zimmer Biomet’s Q2 Results
It was encouraging to see Zimmer Biomet beat analysts’ revenue expectations this quarter. We were also happy its full-year EPS guidance narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 3% to $98.68 immediately after reporting.
Zimmer Biomet put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
