Paragon 28 Acquisition Contributes to Growth
The Paragon 28 acquisition added 0.7% to consolidated net sales growth in Q2, with a larger impact in the S.E.T. category (2.8%).
Source: 10-Q Item 2 MD&A
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Zimmer Biomet’s second quarter of fiscal 2026 was defined by the integration of the Paragon 28 acquisition and strong demand for surgical technologies, with the Technology & Data, Bone Cement and Surgical category surging 21.1% — the fastest among all segments. Management also cited favorable foreign exchange and a one-time $30 million tariff refund as tailwinds. While net earnings jumped 29.8%, selling, general and administrative expenses rose as a percent of sales due to sales force investments and higher litigation costs. The quarter’s performance sets a positive tone for the year, though pricing pressure and go‑to‑market changes remain as tensions.
Revenue
$2.18B
+4.80% YoY
EPS (Diluted)
$1.03
+33.77% YoY
Operating Income
$326.1M
+8.70% YoY
Source: SEC XBRL
Zimmer Biomet Holdings (ZBH) reported Q2 FY2026 revenue of $2.18B, up 4.8% year over year. Operating margin was 15.0%, up 0.6 points from 14.4% a year earlier. ZBH's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 2.07 | 2.03 | Beat +2.0% |
| Mar 2026 | 2.09 | 1.88 | Beat +11.0% |
| Dec 2025 | 2.42 | 2.42 | Beat +0.0% |
| Sep 2025 | 1.90 | 1.89 | Beat +0.7% |
Adjusted (non-GAAP) EPS of $2.07 versus the $2.03 analyst consensus — a +2.0% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $1.03.
Compiled by AI from 10-Q Item 2 of this filing
The Paragon 28 acquisition added 0.7% to consolidated net sales growth in Q2, with a larger impact in the S.E.T. category (2.8%).
Source: 10-Q Item 2 MD&A
Sales in this category grew 21.1% year-over-year, driven by heightened demand for ROSA Robots and bone cement products.
Source: 10-Q Item 2 MD&A
A favorable adjustment of approximately $30 million related to probable U.S. tariff refunds was recognized in the six‑month period, lowering cost of products sold as a percentage of revenue.
Source: 10-Q Item 2 MD&A
Restructuring charges were $29.8 million in Q2, and the company expects annual pre‑tax savings of $175 million by the end of 2027 from these initiatives.
Source: 10-Q Item 2 MD&A
Full‑year guidance calls for sales growth driven by market expansion, new products, the Paragon 28 acquisition (1.1% contribution), and favorable foreign exchange (0.5%).
Source: 10-Q Item 2 MD&A
Compiled by AI from 10-Q Item 2 of this filing · 1 high, 3 medium, 1 low
Global selling prices reduced revenue growth by 0.8% in Q2, as hospitals and health systems continue cost‑containment efforts and volume‑based discounts compress margins.
Source: 10-Q Item 2 MD&A
The Paragon 28 acquisition has added complexity and incremental costs, including inventory fair‑value step‑up charges that pressured gross margin in the quarter.
Source: 10-Q Item 2 MD&A
The company estimates total litigation liabilities of $137.9 million as of June 30, 2026, and higher product liability expenses are contributing to rising SG&A costs.
Source: 10-Q Item 2 MD&A
The IRS has proposed adjustments for tax years 2013–2019; an unfavorable resolution could require substantial cash payments and negatively impact operating cash flows.
Source: 10-Q Item 2 MD&A
While FX was a slight tailwind in Q2, approximately 47% of cash sits outside the U.S., and adverse currency movements could affect reported earnings and competitiveness.
Source: 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 2.18 $B | 2.08 $B | +4.80% |
Cost of Revenue $M | 635.50 $M | 592.20 $M | +7.31% |
Operating Income $M | 326.10 $M | 300.00 $M | +8.70% |
Net Income $M | 198.30 $M | 152.80 $M | +29.78% |
EPS (Basic) $ | 1.03 $ | 0.77 $ | +33.77% |
EPS (Diluted) $ | 1.03 $ | 0.77 $ | +33.77% |
SG&A Expense $M | 899.30 $M | 814.80 $M | +10.37% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
ZBH delivered strong Q1 FY2026 results with revenue rising 9.3% YoY to $2.09B and net income surging 30.8% to $238.1M, driven by operating leverage and margin expansion, though cash balances declined sharply by 69.4%.
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.
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