Medical device company Zimmer Biomet (NYSE: ZBH) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 10.9% year on year to $2.24 billion. Its non-GAAP profit of $2.42 per share was 0.9% above analysts’ consensus estimates.

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"We made significant strategic and financial progress in 2025, delivering on our initial revenue growth, EPS and free cash flow commitments and integrating three acquisitions, all while navigating tariff headwinds," 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

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Zimmer Biomet’s sales grew at a mediocre 6.1% compounded annual growth rate over the last five years. This fell short of our benchmark 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 5.5% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

Zimmer Biomet also reports sales performance excluding currency movements, which are outside the company’s control and not indicative of demand. Over the last two years, its constant currency sales averaged 5.3% year-on-year growth. Because this number aligns with its normal revenue growth, we can see that Zimmer Biomet has properly hedged its foreign currency exposure.

This quarter, Zimmer Biomet reported year-on-year revenue growth of 10.9%, and its $2.24 billion of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months, similar to its two-year rate. This projection is underwhelming and implies its newer products and services will not catalyze better top-line performance yet.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Zimmer Biomet’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 14.1% over the last five years. This profitability was higher than the broader healthcare sector, showing it did a decent job managing its expenses.

Analyzing the trend in its profitability, Zimmer Biomet’s operating margin of 13.3% for the trailing 12 months may be around the same as five years ago, but it has decreased by 3.9 percentage points over the last two years.

This quarter, Zimmer Biomet generated an operating margin profit margin of 6.9%, down 12.3 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 solid 7.7% 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 Q4, Zimmer Biomet reported adjusted EPS of $2.42, up from $2.31 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Zimmer Biomet’s full-year EPS of $8.20 to grow 3%.

Key Takeaways from Zimmer Biomet’s Q4 Results

It was good to see Zimmer Biomet narrowly top analysts’ revenue expectations this quarter. On the other hand, its full-year EPS guidance slightly missed. Overall, this was a softer quarter. The stock remained flat at $89.35 immediately following the results.

Big picture, is Zimmer Biomet a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).