AI Takeaway
ZBH (Zimmer Biomet) delivered 7.2% revenue growth to $8.23B in FY2025, but profitability declined sharply as rising costs and SG&A expansion drove operating income down 14.6% and net income down 22.0% year-over-year.
Revenue
$8.23B
++7.20% YoY
EPS (Basic)
$3.56
-20.00% YoY
Operating Income
$1.1B
-14.59% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
ZBH grew total revenue by 7.2% year-over-year to $8.23B in FY2025, up from $7.68B in the prior year, suggesting strong demand for its orthopedic and musculoskeletal products. This top-line expansion reflects continued procedure volume recovery and potential contributions from acquisitions or new product launches.
Source: Source: 10-K Income Statement (Financial Data)
Cost of revenue rose 13.8% to $2.49B, outpacing revenue growth of 7.2%, which compressed gross margins. SG&A expenses also surged 11.2% to $3.26B, reflecting elevated selling, integration, or restructuring costs that further weighed on operating income, which fell 14.6% to $1.10B.
Source: Source: 10-K Income Statement (Financial Data)
Net income dropped 22.0% to $705.1M from $903.8M in the prior year, and diluted EPS fell 19.9% to $3.55 from $4.43. The decline in earnings per share was partially cushioned by share buybacks of $487M, though buyback activity itself declined 43.9% versus the prior year.
Source: Source: 10-K Income Statement & Cash Flow (Financial Data)
2 more insights available
Upgrade to unlockCost of revenue grew 13.8% and SG&A grew 11.2%, both significantly outpacing revenue growth of 7.2%, leading to a 340 basis point decline in operating margin to 13.3%. If ZBH cannot control cost inflation or achieve operating leverage, profitability could continue to deteriorate even with top-line growth.
Source: Source: 10-K Income Statement (Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.42 versus the $2.42 analyst consensus — a +0.0% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $8.23B | $7.68B | +7.20% |
Cost of Revenue | $2.49B | $2.19B | +13.81% |
Operating Income | $1.1B | $1.29B | -14.59% |
Net Income | $705.1M | $903.8M | -21.98% |
EPS (Basic) | $3.56 | $4.45 | -20.00% |
EPS (Diluted) | $3.55 | $4.43 | -19.86% |
SG&A Expense | $3.26B | $2.93B | +11.17% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $23.09B | $21.37B | +8.08% |
Current Assets | $5.12B | $4.67B | +9.60% |
Total Liabilities | $10.39B | $8.89B | +16.84% |
Current Liabilities | $2.58B | $2.45B | +5.42% |
Stockholders' Equity | $12.7B | $12.47B | +1.84% |
Cash & Equivalents | $591.9M | $525.5M | +12.64% |
Long-Term Debt | $6.93B | $5.34B | +29.77% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.7B | $1.5B | +13.19% |
Investing Cash Flow | $-1.98B | $-888.1M | -122.46% |
Financing Cash Flow | $326M | $-484.5M | +167.29% |
Share Buybacks | $487M | $868M | -43.89% |
D&A | $1.09B | $996.3M | +9.79% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 13.3% | 16.7% | -3.40% |
Net Margin | 8.6% | — | — |
ROE | 5.6% | — | — |
ROA | 3.1% | — | — |
Current Ratio | $1.982 | — | — |
Debt to Equity | $0.818 | — | — |
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ZBH grew revenue by 7.2% year-over-year to $8.23B in FY2025, up from $7.68B in the prior year. This growth reflects continued demand for orthopedic and musculoskeletal products, though the exact breakdown by segment is not available without the full filing text.
Despite 7.2% revenue growth, ZBH's net income fell 22.0% to $705.1M because cost of revenue rose 13.8% and SG&A expenses jumped 11.2%, both outpacing revenue growth. Additionally, increased interest costs from a 29.8% rise in long-term debt to $6.93B further weighed on the bottom line.
The key takeaways from ZBH's FY2025 results are strong top-line growth of 7.2% to $8.23B, offset by significant margin compression as operating margin fell to 13.3% from 16.7% and diluted EPS dropped nearly 20% to $3.55. Operating cash flow remained robust at $1.70B, and the company made substantial investments, with investing outflows more than doubling to -$1.98B.
Based on the financial data, key risks include rising cost pressures compressing margins, a nearly 30% increase in long-term debt to $6.93B raising leverage concerns, and significant acquisition-related integration risk given that investing outflows more than doubled to -$1.98B. Reduced share buybacks of $487M (down 43.9%) also limit EPS support going forward.
ZBH maintains adequate liquidity with a current ratio of 1.98 and strong operating cash flow of $1.70B, but financial health has modestly weakened due to a 29.8% increase in long-term debt to $6.93B and a 22% decline in net income to $705.1M. Stockholders' equity grew only 1.8% to $12.70B, and ROE stands at a relatively modest 5.6%.