Zimmer Biomet Holdings (ZBH) Q3 2024 Earnings Report

Zimmer Biomet reported a solid QQ3 2024 performance characterized by mid-single-digit revenue growth and margins largely stable despite ERP-related headwinds. Revenue reached $1.824 billion, up ~4% year over year, with adjusted EPS of $1.74 and free cash flow of $310 million in the quarter, supporting a year-to-date free cash flow of $652 million. Management highlighted ongoing ERP challenges in North America that are now expected to reduce annual sales impact to 60-80 basis points in 2024, with normalization by year-end. The quarter marked the 11th consecutive quarter of mid-single-digit or better constant-currency growth, aided by strength in knees, hips, and head/SET categories, and a robust innovation pipeline featuring Z1, HAMMR, ROSA robotics, and ROSA Shoulder. Looking ahead, management reaffirmed a long-range plan targeting mid-single-digit revenue growth with operating margin expansion and stronger free cash flow through 2027, while signaling a continued emphasis on portfolio diversification and selective M&A to accelerate growth. The guidance update for 2024 calls for 4.25%-4.75% constant-currency revenue growth (roughly 3.5%-4.0% reported after currency headwinds) and adjusted diluted EPS of $7.95-$8.05 for the year, underscoring resilience amid near-term ERP headwinds and macro variability. Investors should monitor ERP remediation progress, new product introductions, ROSA/Z1 adoption, pricing dynamics, FX movements, and the trajectory of the company’s longer-term margin expansion plan.