stockrowWhat it does
Zimmer Biomet designs, manufactures and sells medical devices used to treat injuries and disorders of bones, joints and surrounding soft tissue. Founded in 1927, it is headquartered in Warsaw, Indiana, and led by Chairman, President and CEO Ivan Tornos.
The company is known for orthopedic reconstruction: implants and instruments used to replace or repair joints. Its knee products include components for total and partial replacements, as well as products for revision procedures when an existing implant needs to be replaced, repaired or enhanced. Its hip systems serve both first-time replacements and revisions.
Zimmer Biomet also sells products for sports medicine, foot and ankle conditions, upper extremities, trauma and reconstruction of the face, skull and chest. These include products to repair soft tissue, stabilize broken bones and help fix bones of the chest after surgery or injury. Bone cement and surgical supplies support procedures at healthcare institutions.
Its technology portfolio includes the ROSA robot, which assists surgeons with implant positioning, and the ZBEdge platform, which connects robotic and digital technologies to collect data before, during and after surgery. The company sells to hospitals, ambulatory surgery centers and other healthcare institutions, as well as through distributors and dealers. Surgeons and other specialists use its products in patient care.
How it makes money
Zimmer Biomet earns revenue primarily by selling implants, related surgical products and technologies used in orthopedic procedures. It manages operations through the Americas, Europe, Middle East and Africa, and Asia Pacific segments, while also reporting sales by product category.
In FY2025, Knees generated $3.3 billion in revenue, Hips generated $2.1 billion and S.E.T. generated $2.2 billion. S.E.T. covers sports medicine, biologics, extremities, trauma and craniomaxillofacial and thoracic products. The Technology & Data, Bone Cement and Surgical category includes the ZBEdge platform, bone cement and other surgical offerings.
For Q3 2026, net sales were $2.63 billion; in 2025, net earnings were $705.1 million.
The company sells directly to institutions and through stocking distributors and dealers. Much of its inventory is consigned: Zimmer Biomet retains ownership until products are needed, generally for a procedure. Consignment sales represented approximately 85 percent of net sales in 2025. Other customers typically take title when products are shipped. The company also reported that over 2/3 of OrthoGrid sales in Q3 2026 came from recurring revenue.
Selling prices face pressure from hospitals, health systems and government cost-containment efforts. Zimmer Biomet offers volume discounts to some healthcare institutions under group purchasing contracts; members generally can also purchase from other preferred suppliers. The company said pricing was a 70 basis point headwind in Q3 2026. Procedure timing also affects sales: elective procedures typically decline in summer and can rise at year-end after patients meet insurance deductibles.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Knees | $3.3 billion | 40.4% | 4.69% |
| S.E.T | $2.2 billion | 26.1% | 15.2% |
| Hips | $2.1 billion | 25.4% | 4.72% |
| Technology & Data, Bone Cement and Surgical | $665.6 million | 8.09% | 3.95% |
Customers and how it sells
Zimmer Biomet’s customers include orthopedic surgeons, neurosurgeons and other specialists, healthcare institutions, distributors, dealers and purchasing organizations. They range from multinational enterprises to independent clinicians. No individual customer accounted for more than 2 percent of net sales in 2025.
The direct channel serves institutions such as hospitals and ambulatory surgery centers. The company also uses stocking distributors and dealers, supported by sales associates, managers and personnel who provide product information and technical support to surgeons. Zimmer Biomet said roughly a quarter of its business went to ambulatory surgery centers in Q3 2026.
The Americas is its largest operating segment, principally comprising the United States. FY2025 international revenue was $3.5 billion. In Europe, Middle East and Africa, France, Germany, Italy, Spain and the United Kingdom collectively accounted for approximately 50 percent of regional net sales in 2025. Japan was the largest market in Asia Pacific, also accounting for approximately 50 percent of that region’s net sales.
The company is changing its U.S. sales model, including converting independent representatives to employees and building a dedicated sales force. It said over 75% of its U.S. sales force was fully dedicated by Q3 2026.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Americas | $5.1 billion | 31.2% | 7.30% |
| United States | $4.8 billion | 28.9% | 7.32% |
| International | $3.5 billion | 21.1% | 7.03% |
| EMEA | $1.8 billion | 11.1% | 8.14% |
| Asia Pacific | $1.3 billion | 7.64% | 5.47% |
Suppliers and costs
Zimmer Biomet manufactures products at its own facilities and outsources some component production to qualified suppliers. It buys all raw materials and selected components from external suppliers. Some supplies come from single sources because of quality assurance, availability, cost or regulatory constraints; the company works with suppliers on continuity and quality.
Manufacturing costs, research and development, selling and distribution, and administration are material parts of the cost structure. In 2025, cost of products sold increased partly because of higher sales volume, inventory charges on products intended for discontinuation, U.S. tariffs and an acquisition-related inventory adjustment. Selling and administrative expenses also increased, including sales and distribution costs, product-line instrument charges and investment in marketing, medical education and information technology.
Zimmer Biomet is reshaping its manufacturing network. It plans to close selected underused U.S. sites and consolidate operations in facilities in Warsaw, while consolidating international manufacturing in lower-cost geographies. In Q3 2026, the company reported higher manufacturing costs and increased selling and administrative expense associated with its sales-force transformation. It expects continued investment in the U.S. commercial organization to affect its 2026 adjusted operating margin.
- Revenue$8.2B
- Cost of revenue−$2.5B
- Research and development−$458.5M
- Selling, general and administrative−$3.3B
- Other operating costs−$924.0M
- Operating income$1.1B
Competitive position
Zimmer Biomet competes in orthopedic and musculoskeletal care on technology, innovation, quality, reputation, customer service and price. In global knees, hips and S.E.T. products, its major competitors include Johnson & Johnson MedTech, Stryker and Smith & Nephew. Smaller companies also focus on subsegments of those product categories.
The company combines implants with robots and digital tools. ROSA assists with knee implant positioning and is also used in hip and shoulder procedures. Zimmer Biomet has a distribution and supply agreement with THINK Surgical for a version of its TMINI handheld robotic system compatible with Persona Knee. The company also owns or licenses patents and applications and relies on trade secrets, know-how and ongoing product development.
Its sales representatives are trained in individual products and provide technical support to surgeons. Zimmer Biomet keeps inventory at institutions or with sales agents so products are available for procedures. In Q3 2026, the company said its U.S. knee results were affected by its sales-force transition and a competitive implant market.
Our reading: The combination of implants, procedural support and on-site inventory provides a meaningful customer relationship, but the reported knee pressure shows that it does not eliminate competition. Our reading: Patents and connected surgical technologies offer product differentiation, although their protection depends on continued innovation and regulatory clearance.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Johnson & Johnson MedTech | Global knees, hips and S.E.T. products | High |
| Stryker Corporation | Global knees, hips and S.E.T. products | High |
| Smith & Nephew plc | Global knees, hips and S.E.T. products | High |
Growth opportunities
Zimmer Biomet’s growth plans include new implants, robotic and digital technology, expansion in product categories beyond joint reconstruction, and acquisitions. It develops new surgical techniques, materials, biologics and product designs, and explores applications for artificial intelligence and machine learning.
In 2025, net sales increased 7.2 percent from 2024. The company attributed growth to its Paragon 28 acquisition, market growth, new products and a comparison with the prior year, when an enterprise software implementation disrupted order fulfillment. Paragon 28 contributed 2.5 percent to net sales growth in 2025. Zimmer Biomet also acquired Monogram in 2025.
In Q3 2026, the company reported constant-currency growth of 7% in Hips and 7.1% in S.E.T., while Knees declined. It raised its 2026 organic constant-currency sales growth expectation to 3% to 3.5%.
For robotics, the company expects to submit a Monogram application to the FDA and anticipates launching a surgeon-guided, fully autonomous version in the first half of 2027. It cautions that filing does not mean approval. Zimmer Biomet is also increasing supply of its iodine-coated hip products in Japan after demand exceeded its expectations.
The company has launched a venture platform to invest in early-stage technologies and expects to continue pursuing acquisitions. It has an aspiration for its weighted average market growth rate to reach 6% by the end of the decade.
- $6.8BFY2021
- $6.9BFY2022
- $7.4BFY2023
- $7.7BFY2024
- $8.2BFY2025
Structural risks
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Competition and execution: Success depends on developing and marketing products against competitors. The company said its U.S. sales-force transition and competition affected knee sales in Q3 2026, and it expects ongoing disruption risk from the transition.
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Regulation and product quality: Devices and manufacturing are subject to extensive oversight. Regulatory clearance can be lengthy and costly, while adverse enforcement action could restrict manufacturing, marketing or sales. Product functionality issues can lead to patient-safety risks, field actions or recalls.
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Supply and operations: Some materials and components are single-sourced. Operational or system disruptions can affect supply chains, products and services, including the ZBEdge ecosystem. Zimmer Biomet is also consolidating manufacturing sites.
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Acquisitions and debt: Acquisitions can create integration difficulties or fail to generate enough revenue or savings to offset their costs. The company had $7,519.1 million of outstanding debt at December 31, 2025; servicing debt can reduce funds available for other uses.
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International and pricing exposure: Foreign operations face changing reimbursement and regulatory requirements, currency fluctuations and inflation. Hospitals, health systems and government cost-containment programs also put pressure on selling prices.
Bottom line
Our reading
Our reading: Zimmer Biomet is an orthopedic device business built around procedure-driven implant sales, supported by surgeon relationships, inventory placement and surgical technology. Its product breadth gives it sources of growth beyond knees, but the sales-force transition and competitive pressure show how execution can affect an established franchise. Acquisitions and new robotics offer additional opportunities while bringing integration, debt and regulatory exposure.