Zimmer Biomet Holdings, Inc.

Zimmer Biomet's third-quarter sales were $2.06 billion, up 3.1% as reported and 3.7% in constant currency. Knee sales fell 2.6% in constant currency, while hips grew 7% and technology and related products grew 13%.

The annual organic constant-currency sales forecast rose to 3% to 3.5% from 2.25% to 3.25%. This definition removes Paragon 28's contribution through its April acquisition anniversary. Other 2026 acquisitions remain included. The analysis of knee sales and the outlook follows the changing mix of growth.

Profit and the share count

Adjusted earnings exclude items including intangible-asset amortization, restructuring and acquisition-related costs or gains. Fewer shares kept adjusted EPS flat despite lower total adjusted profit.

The annual adjusted earnings forecast is $8.50 to $8.60 per share, up from $8.47 to $8.59.

Completed acquisitions and deferred payments

During the third quarter, Zimmer Biomet completed Iovera on July 31, Monteris on August 11 and Alafair on August 24. Combined preliminary consideration was valued at $754.9 million, including $380.5 million of cash at closing, $185.7 million of deferred consideration and $188.7 million of contingent consideration.

Alafair's deferred cash consideration, valued at $185.7 million at acquisition, is payable in the first quarter of 2027. The cash-flow statement reports $359.4 million of business-combination investments net of acquired cash for the first nine months.

A distributor transition changes cash timing

Zimmer Biomet repurchased inventory from an outgoing distributor and immediately resold most of it to a new platform distributor. The company said the transition had an immaterial effect on consolidated sales.

The new distributor represented approximately 12% of consolidated accounts receivable at September 30. It can pay for its initial purchase in equal installments through October 2027. Zimmer Biomet separately owed the previous distributor approximately $95 million, expected to be paid by the end of 2026.

Cash and borrowing

First-nine-month operating cash flow was $1.37 billion. Spending on instruments was $274.4 million, with $166.3 million spent on other property, plant and equipment. Free cash flow after those outlays was $926.5 million.

Cash and cash equivalents were $399.9 million at September 30. Current debt was $1.29 billion, including $120 million drawn under an uncommitted facility, with $6.22 billion of additional long-term debt.

The company also had undrawn committed facilities of $1.5 billion for five years and $1.25 billion for 364 days.

Preliminary bond offerings

On November 5, Zimmer Biomet filed preliminary offerings for euro- and dollar-denominated notes. The filings left the new notes' amounts, interest rates and final maturity dates open. Possible uses of the proceeds include repaying part of the existing €500 million of notes due December 13, 2026 and/or $600 million due February 19, 2027, alongside share repurchases, capital commitments and acquisitions.