Q1 2025 Zimmer Biomet Holdings Inc Earnings Call
and many more. Thank you. Thank you.
Good morning ladies and gentlemen and welcome to the Zimmer Biomet first quarter 2025 earnings conference call
If anyone needs assistance at any time during the conference, please press the star, followed by the zero. As a reminder, this conference has been recorded today May 5th, 2025.
Speaker Change: Following today's presentation, there will be a question and answer session. At this time, all participants are in a listening mode. If you have a question, please press the star followed by the one on your push button phone. I would now like to turn the conference over to David DeMartino, Senior Vice President, investor relations. Please go ahead. Thank you very much.
David DeMartino: Thank you, Operator. Good morning, everyone. Welcome to Zimmer Live at the first quarter of 2025 earnings conference call. Good morning. Good morning. Good morning.
David DeMartino: Joining me on today's call are Ivan Tornos, our President and CEO , and Suketu Upadhyay, our CEO , and need to be finance operations and supply chain.
Speaker Change: Before we get started, I'd like to remind you that our comments during this call include forward-looking statements. Thank you very much.
Speaker Change: Actual results may differ materially from those indicated by the four-look statements, due to a variety of risks and uncertainties
Speaker Change: For a detailed discussion of all these risks and uncertainties, in addition to the inherent limitations of such poverty statements, please refer to RSUC violence
Speaker Change: Please note, we assume no obligation to update these political statements even if actual results are future expectations, change materially.
Speaker Change: Additionally, the discussions on this call include certain non-GAAP financial measures. Some of which are forward looking on GAAP financial measures. [inaudible]
Speaker Change: Reconciliation on these measures to the most directly comparable GAAP financial measures and an explanation of our basis for calculating these measures. It included within our first quarter earnings release, which can be found on our website, cverbiamet.com. With that, I'll turn the call over to Ivan.
Ivan Tornos: Good morning everyone and thank you for joining today's call. I would like to start today the way that I always do by taking a moment to recognize and to show my gratitude to the over 17,000 Zimmer Biomet team members who move our business and mission forward every day.
Ivan Tornos: Thank you for your tireless work, your strong performance, and most importantly thank you for your commitment to serving our customers and our patients [inaudible]
Ivan Tornos: As always saying, the Zimmer Biomet workforce and the culture that we have truly is one of our key competitive advantages . . . .
Ivan Tornos: To my prepare remarks this morning, I'm going to cover four things [inaudible]
Ivan Tornos: First, the first quarter results of 2025, particularly, or drivers of performance for 25 and beyond [inaudible]
Ivan Tornos: Thirdly, the usual update on our three strategic priorities and then I'll close with an update on the recently completed Paragon 28 acquisition.
Ivan Tornos: After this, Suk is going to cover our financials in more detail, I will make sure to leave plenty of time for questions at the end of the prepare remarks.
Ivan Tornos: To begin, we grew first quarter sales 2.3% constant currency with a standout results in U.S. Hips, which were up nearly 4% amid single-digit growth in SET
Ivan Tornos: This performance was against the backdrop of one less selling day in the quarter, which as we mentioned in the past represented a meaningful headwind.
Ivan Tornos: The U.S. hip performance highlights the opportunity with a magnificent seven-product cycle and the impact that these products will have in a accelerated position as the global leader in hips and knees.
Ivan Tornos: Specifically in the U.S., the combination of Z1 or triple taper hippestem for direct anterior procedures, hammer or surgical impactor, and ortho-greet or AI-driven surgical guidance system for total hip replacements
has put us on the offensive once again.
Ivan Tornos: Notably, roughly half of the Z1 users in the US are conversions from competitive accounts.
A train that we expect to continue.
Ivan Tornos: In U.S. needs, we expect Persona Oshutai, or Semenlisni, and the Oxford Partial Semenlisni to drive accelerating growth throughout 2025.
Ivan Tornos: We have now passed 25% penetration with some endless needs in the US.
Ivan Tornos: and expect that train to accelerate now that will have perform widespread customer and shells-wrapped training and have ample supply to drive increased penetration
Ivan Tornos: Similarly, the European launch of Persona Revision, the leading revision in the U.S.
to continue to get traction throughout the year.
Ivan Tornos: Looking at 2025, we are maintaining our full-year organic constant currency revenue growth expectations of 3 to 5% which excludes contribution from the Paragon 28 acquisition .
Ivan Tornos: We anticipate Paragon 28 to contribute 270 basis points to sales growth in 2025
from the previous $8.15 to $8.35 which contemplates
Ivan Tornos: First, the impact from Terry's being fully upset, primarily by the weakening of the US dollar [inaudible]
Ivan Tornos: Sifts in discretionary spending and other operational strategies that our theme is undertaken.
Ivan Tornos: And then secondly, modest dilution of less than 3% from the Paragon 20 acquisition, as was previously mentioned.
Ivan Tornos: Shuki is going to provide more detail on guidance in his prepared remarks.
As we progress throughout 2025, our priorities have not changed [inaudible]
We're going to continue to over-index on people and culture.
Operation Excellence, and Innovation and diversification.
Ivan Tornos: Firstly, in the priority of people and culture, we're going to continue to ensure that we have the right people in the right jobs.
Ivan Tornos: To that end, at the senior leadership level of the organization, we recently added two new leaders to take over the key functions of strategy, innovation and business development as well as communications.
Ivan Tornos: In addition to that, we have also hired new commercial leaders in key countries in Asia Pacific, have made changes in U.S. general management in key geographies, and have hired strong capabilities in pricing.
Ivan Tornos: As we move towards the end of the year, we plan to make additional changes in the US knowing that we got to do better, ensuring that every territory is led by a strong player who's solely focused on driving Zimmerman's performance in the assigned geography. Thank you very much.
Ivan Tornos: Secondly, in alignment with the strategic priority of operational excellence, we remain committed to elevating all performance in the very critical U.S. market, and to that end, are making changes to optimize your U.S. sales channel.
Ivan Tornos: We're going to continue to specialize or ACT set field team to ensure that we capitalize on the high growth opportunity that this market represents, while bolstering or leadership position in the ASC through expanded product offerings and capabilities [inaudible]
Ivan Tornos: Anard also meaningfully expanding all robotic platforms through innovation and committing additional commercial resources.
Ivan Tornos: As a reminder, all of these changes are contemplated within the Giving Guidance range for the year from both Arrevenue and EPS standpoint
Ivan Tornos: In addition to driving sales growth, we continue to prioritize margin improvement while also reducing inventory needs.
That way we can increase our free cash flow generation.
Ivan Tornos: We like what we are seeing when it comes to DOH, Jason Hemp, and Redaction that we've seen in DOH [inaudible]
Ivan Tornos: and expect to move from around 370 days today to a much lower number in the quarter years to come.
Ivan Tornos: As a reminder, or DOH number was north of 400, early in 2024. [inaudible]
In a third priority of innovation and diversification,
Ivan Tornos: Now that we have no gaps left in our core portfolio after the introduction of the magnificent seven products, we are now refocusing our innovation efforts [inaudible]
in addressing Ahmed Needs within Masculous Crater health and adjacent areas. [inaudible]
Ivan Tornos: or key problems that we're going to solve for. Number one is awareness.
Less than 5% of patients address their osteoarthritis.
Speaker Change: To empower patients to seek treatment, we're executing a bold direct-to-patient program in partnership with Chief Movement Officer, Arnold Schwarzenegger.
Speaker Change: In the first quarter of 2025, we launch your new, you'll be back campaign campaign.
Speaker Change: We continue to partner with key societies to educate patients around the world about joint replacement, while also expanding our digital marketing program in key geographies and territories [inaudible]
The second problem we're trying to solve is safety.
Pretty prosthetic joint infections or PGIs occur in roughly 1-2%
of Primary Cases. [inaudible]
Speaker Change: and around 4 to 5% of revision joint replacement procedures and can be devastating. As a matter of fact, mortality rates once you do get these PDIs can be higher than some cancers.
Speaker Change: We are committed to addressing these unmet needs through technology, such as iodine surface treated implants, to prevent bacterial colonization and biofilm formation.
Speaker Change: Excited to be launching the first iodine surface treatahyper stem in Japan later this year
Speaker Change: And at some point, they'll come to the U.S. where the opportunity is pretty large.
Speaker Change: Beyond IODA and surface devices, we are investing in technology that aims to drive faster surgeries to reduce exposure to infection while in the operating room.
Speaker Change: or one team acquisition executed late 2024 is an example of this strategy.
Speaker Change: The third key area, where we're going to focus on innovation efforts, is around efficiency.
Speaker Change: One aim for innovation engine is to lessen the burden of care for all key stakeholders
Speaker Change: by capturing patient data with smart implants, making a CT scan and option for robotic implants.
with our platform Rosa.
Speaker Change: And by reducing surgical times through Eurilite and AI technology such as Orthogreed,
Speaker Change: We target to improve the quality of life for patients, reduce the cost of care for payers and providing doctors more time to perform other surgeries
Speaker Change: We believe we can be faster and smarter when it comes to the episode of treatment for the multiple patients that can benefit from more devices.
Speaker Change: The fourth key area where we are focusing on innovation efforts.
It's around outcomes. [inaudible]
We strive to continually improve patient satisfaction. Thank you.
Speaker Change: With the recent PMA approval of the Oxford Partial Assembly, Les Nis,
Speaker Change: Patients in the United States now have access to a partial knee back by Robach's clinical data. Data on nearly 15,000 patients from the National Joint Registry for the UK demonstrated 93% survivorship at 10 years.
Speaker Change: This is a statistically significant improvement over the 90% with cemented partial implants.
Speaker Change: We have now trained several hundred customers on Oxford partial semendless.
and expect robust adoption as we exit 2025. We will see you in the next video.
Speaker Change: In addition to internal development solutions, we will also look to address these needs through inorganic opportunities that fear the strategic, financial and risk return metrics.
Speaker Change: and we do remain committed to a respiration of achieving a 5% winger weighted average market growth rate environment by the end of 2027. As a reminder, today's winger, here at Zimmer Biomet, is around 4 to 4.25.
Speaker Change: We have built best-in-class integration capabilities at Zimmer Biomed, and are ready to take on the right opportunities at the right time.
Speaker Change: Speaking of successful integrations, I want to end today discussing the closing and integration of the Paragon 20 R acquisition
As of April 21st, Paragon 28
Speaker Change: It's now part of the Zimmer Biomet family, and we're very proud of this achievement This successful integration of the acquisition has been and will continue to be a top priority And I'm very happy to report that Paragon 28's Chairman and CEO Albert Acosta Thank you for your time, and I'll see you in the next video.
Speaker Change: as well as his entire senior commercial leadership team have now joined the Zimmer Biomet family. Other than the team have created a highly energetic entrepreneurial and committed culture which we intend to preserve here at Zimmer Biomet.
Speaker Change: I could not be more excited to have the Paragon 2018 on board. I love what they bring to CV and I look forward to the ongoing journey.
Speaker Change: In addition to an indecently-deceived of Paragon-Tonnier, the entire US sales channel of Paragon-Tonnier has now signed up for the Zimmer Biomet journey.
Speaker Change: creating minimal disruption to the success that they have achieved over so many years.
Speaker Change: In conclusion, we are very proud of the progress in our organization and we look forward to continuing to execute and build momentum as we move throughout the year [inaudible]
Suki: A lot of the fact that we're impacting the lives of millions of people, and I'm deeply inspired every day in knowing that my teammates and I are living in the Zimmerbaum admission of olive eating pain and improving the quality of life for people around the world. And with that, I'll now turn the call over to Suki. Thank you very much. Thank you very much.
Thanks and good morning everyone.
Suki: As Ivan mentioned, we close a solid quarter that demonstrated the early impact of our new product cycle.
Suki: Despite the selling day headwind, we grew sales 2.3% on a constant currency basis. Delivered adjusted earnings per share of $1.81 and generated $279 million in free cashflow.
Suki: Looking at this quarter's results, unless otherwise noted, my statements will be about the first quarter of 2025 and how it compares to the same period in 2024. And my commentary will be on a constant currency and adjusted operating basis.
Suki: 2025 Organic Constant Currency Guidance Commentary will exclude any projected impact of the recently closed Paragon 28 acquisition
Suki: Net sales were $1.909 million, an increase of 1.1% on a reported basis, and 2.3% excluding the impact of foreign currency.
Suki: Consolidated pricing was ten basis points positive, marking the fifth consecutive quarter of positive pricing
Suki: Our US business grew 1.3% driven by nearly 4% growth in both hips and SET.
Suki: As Ivan mentioned, we continue to make changes to bolster our U.S. performance
Speaker Change: This includes new leadership and key geographies, sales rep specialization, expanding our ASC offerings and committing additional commercial resources in robotics.
Speaker Change: Internationally, we grew 3.7% driven by mid-single-digit growth in knees and high single-digit growth in SET.
Speaker Change: Our FET business continues to outpace knees and hips, and with the closing of the Paragon 28 transaction, it will now be larger than our hip business.
Speaker Change: Disaligns with our strategy of diversifying into faster growth markets.
and many more. Thank you. Thank you.
Speaker Change: Global Hips grew 2.4% with the US growing 3.7% and international growing 1%.
Speaker Change: We are particularly pleased with the U.S. results given the selling day headwind.
Ivan Tornos: As Ivan mentioned, our U.S. performance was driven by the combination of Z1, Hammer, and Worth of Grid
Ivan Tornos: The Z1 launch has exceeded our expectations and we have seen rapid uptake from both existing customers and competitive accounts.
Ivan Tornos: Global needs grew 1.9% in the quarter, with US growing 0.2% and international growing 4.2% [inaudible]
Ivan Tornos: We continue to anticipate an acceleration in U.S. needs throughout 2025, driven by increased penetration of our persona, osteotides, cementless need, and the full launch of our Oxford partial cementless need.
Ivan Tornos: Next, our SET segment grew by 4.9% led by CMFT in sports, growing in the low teens and high single digits respectively
Ivan Tornos: This marks the sixth consecutive quarter of at least mid-single-digit growth in FET, a trend we expect to continue.
Ivan Tornos: Finally, technology and data, bone cement and surgical declined 3.5% due to tough combs from the prior year and a mix shift towards Rosa volume-based placements versus outright sales
Turning to our P&L
Ivan Tornos: We reported gap deluded earnings per share of 91 cents compared to gap deluded earnings per share of 84 cents in the prior year
Ivan Tornos: This increase was driven by higher sales and lower restructuring charges.
Ivan Tornos: On an adjusted basis, we delivered diluted earnings per share of $1.81 compared to $1.94 in the prior year.
Ivan Tornos: As previously guided, earnings were down due to higher cogs capitalization from 2024, higher upfront investments for new product introductions, higher interest expense, and an FX headwind of about three cents.
Ivan Tornos: adjusted gross margin was 71.5% and adjusted operating margin was 26.2%, both lower than a prior year but in line with expectation.
Ivan Tornos: Adjusted net interest in non-operating expenses were $59 million, above the prior year driven by higher debt and higher interest rates on refinance debt that matured in 2024 in 2004.
Ivan Tornos: Our Justice Tax Rate was 18.2% and fully diluted shares outstanding were $199.7 million.
Ivan Tornos: Down year over year, due to the share we purchased, of which we executed another $230 million during the quarter.
Thank you. Thank you very much. All right.
Turning the cash in liquidity.
Ivan Tornos: We had another strong quarter of cash generation, with operating cash flows of 383 million and free cash flow of 279 million, representing robust growth versus the prior year.
Ivan Tornos: Our Working Capital Initiatives target towards inventory reduction continue to pay off, as we reduce days on hand by almost 47 days compared to Q1 2024
Ending at approximately 370 days of inventory on hand.
Ivan Tornos: We enter the quarter with approximately $1.4 billion of cash and cash equivalents.
Ivan Tornos: which includes the proceeds from debt issuance to support the acquisition of Paragon 28.
regarding our outlook for 2025. Bye.
Ivan Tornos: There are a number of moving parts that impact our guidance
Ivan Tornos: First, at recent rates, FX is now expected to be a tailwind to our full-year outlook.
Ivan Tornos: Additionally, we incorporate our initial estimate on the negative impact of global tariffs, as well as the closing of the Paragon 28 transaction into our guidance.
Ivan Tornos: When accounting for these changes, we now expect 2025 reported sales growth of 5.7% to 8.2%.
Ivan Tornos: EPS of $7.90 to $8.10 and free cash flow of $750 million to $850 million.
Ivan Tornos: On revenue, we are reiterating our 2025 organic constant currency revenue growth of 3% to 5%
Ivan Tornos: Inside of this, we expect average selling prices to be roughly flat for the full year and selling day differences to be a modest headwind to growth . . .
Ivan Tornos: With a recent weakening of the dollar, at Current Race, we anticipate FX to be flat to a 50 basis point tailwind in 2025, an improvement from our prior guide.
Ivan Tornos: On Paragon 28, we anticipate the acquisition to contribute about 270 basis points to growth in 2025, resulting in consolidated reported revenue growth expectations of 5.7% to 8.2% regarding the cadence of expected revenue results.
Ivan Tornos: We continue to anticipate that second half organic constant currency growth will be higher than the first half due to more favorable comms related to the 2024 ERP challenges, new products uptake and no selling-day impact.
Ivan Tornos: We expect second quarter organic constant currency growth to be slightly higher than the first quarter of constant currency growth, which incorporates tougher year-over-year comps, a shift of orders from the second quarter into the second half, in certain emerging markets inside of the Mia, and continued optimization of the U.S. Channel. [inaudible]
Now address in tariffs.
Let's just say that the situation remains fluid.
Ivan Tornos: Based on current administration proposals, we anticipated $60 to $80 million headwind to operating profit in 2025 .
Ivan Tornos: with the majority of the impact in the second half of the year. [inaudible]
Ivan Tornos: This estimate contemplates our latest view of mitigation efforts currently underway and that the announced European reciprocal tariffs will go into effect after the 90-day stay period.
Ivan Tornos: I will note that our 2025 impact should not be used as a run rate for 2026 due to a variety of factors and that our estimate around the impact of tariffs in 2025 could change as the macro environment continues to unfold
Ivan Tornos: Given tariffs and the Paragon 28 acquisition, we now anticipate full-year adjusted operating margins to be down approximately 100 to 150 basis points versus 2024.
Ivan Tornos: whose second half adjusted operating margins up slightly from the first half, and the fourth quarter still having the highest adjusted operating margin.
Ivan Tornos: Adjusted net interest and other non-offering expenses are expected to be approximately 305 million, reflecting borrowings for the Paragon 28 acquisition and higher interest rates on refinance debt.
Ivan Tornos: We continue to expect our adjusted tax rate to be approximately 18% for the full year, and fully diluted shares outstanding to be approximately 200 million.
Ivan Tornos: We project the 2025 tariff headwind to be offset primarily by a combination of the weakening US dollar and corresponding FX tailwind, a decrease in discretionary spending and other operational strategies.
Ivan Tornos: Given these dynamics and factoring in the dilution from the Paragon 28 acquisition, which is in line with our original expectations are fully diluted adjusted earnings per share as expected to be $7.90 to $8.10
Ivan Tornos: We now anticipate 2025 free cashflow, $750 million to $850 million, down from $1.1 billion to $1.2 billion, due to parapherelated headwinds and one-time costs associated with the recently closed Paragon 28 acquisition.
Ivan Tornos: This reduction of pre-cashelose projected to be roughly 50-50 between terrorists and the closing of the Paragon 28 deal, and again the Paragon 28 impact should be one time in nature.
Ivan Tornos: I would like to close by thanking the entire ZB team for their continued hard work and dedication.
Continue to make meaningful positive changes across the business.
Ivan Tornos: and continue to invest to accelerate long-term growth while navigating an uncertain environment.
With that, I'll turn the call back over to David.
David DeMartino: Thank you, Suki. Operator, let's open up for questions. In order for us to take as many questions as possible, please limit yourself to one question. Operator, please go ahead.
Speaker Change: Thank you. We'll take our first question from Robbie Marcus with J. V. Morgan. Thank you very much.
Robby Marcus: Oh great, good morning and congrats on the good quarter. I want to start on the topic de jour of tariffs.
Speaker Change: I would say that's a much smaller impact than most were expecting on EPS. So maybe, Suki, if you don't mind walking through what the mitigation efforts are, how you're offsetting the tariff headwind, and you made the comment about the 2025 run rate is not a good...
Speaker Change: Exit Rejectory to calculate 26 tariffs. Maybe you could just expand on that and help us understand what the right run rate is. Thanks a lot.
Suki: Yeah, good morning, Robbie. Thanks for the question. Yes, it is the topic to sure isn't at this season. I would say that we, first of all, going back to some of our earlier comments from the beginning of the year, we call that a, you know, the majority of our production and manufacturing is actually done in the United States.
Suki: And that's been the case for quite some time for Zimmer Biomet, so that overall lowers our exposure, some bit. But we have already taken some early steps to mitigate the impact of tariffs. A couple of the big ones are optimizing our view of country of origin as well as transfer pricing. Thank you very much.
Suki: Secondly, we've made adjustments to our sourcing, to our dual sourcing and redundant sourcing where it makes sense
Suki: and then, thirdly, we've moderated some of our discretionary spending areas that don't really impact near-term or long-term revenue growth. So those are some of the levers that we're pooling to overall lower our impact as we said in our scripted remarks.
Suki: We expect that to be the impact of terrorists this year to be somewhere between 60 to 80 million dollars.
Suki: The impact in Q2 is going to be quite small, less than $5 million over a little over half of the impact will be in Q4, so I think that gives you a good view into the cadence of how tariffs are expected to impact, gross margin and operating margins and overall profit for
Suki: for this year. As we move into 2026, I'd say, you know, it's difficult to predict exactly where Paris will end up, there are a lot of moving parts.
As you know, the impact on our cogs gets capitalized.
Suki: and we'll roll into future periods through inventory, so that's potential headwind. Other headwinds could be, you know, you obviously have the annualization next year, a full year of tariffs versus a partial year this year.
Suki: And then we're also assuming that the 90-day stay period expires in early July, which would be a headwind into next year because you wouldn't have that 90-day pause. There are some tailwinds, however, as we think about 2026.
Suki: The first being is, we're going to continue to look at potential sourcing changes to continue to lower that overall number.
Suki: Potentially some portfolio optimization, exchanging portfolio opportunities across knee hip and set where it makes sense.
Suki: And then of course we're gonna always, as we've done, look at potential discretionary savings. [inaudible]
Suki: on descriptionary spending savings, I should say, to help offset tariffs. So,
While 26 is still a moving target.
Suki: Overall, you could expect it to be higher because of those tailwinds than what we're seeing in 25. But I will say I'm very, very happy with how the team has reacted even before the terrorist put in place to start the plan to get us in position to optimize things. Thanks so much.
Suki: Overall, we do see it as a manageable headwind to this year, and as you'll see from our guidance, excluding the impact of Paragon 28, which is right in line with that expectation, we are fully offsetting the tariff impact.
David Roman: Thank you. I'll take our next question from David Roman with Goldman Tax.
and many more. Thank you. Thank you.
Good morning and thank you for taking the question.
Speaker Change: I'm struggling a little bit to put some of the moving parts together in the quarter and the outlook. I certainly appreciate that Q1 match-year expectation was very consistent with what you presented in February , but the absolute level of growth is still below what we saw last year, pretty much in most of the quarters before...
Speaker Change: ERP Disruption. At the same time, you're highlighting the positive impact of new products.
Robby Marcus: Tower by what appears to be performance-related commercial leadership changes, but how long should it take to digest all these variables and what are you seeing specifically today that you can exit the year above 5% growth to get to the midpoint of the guidance you're you're you're sharing for organic revenue. Thank you.
and many more. Thank you. Thank you.
Speaker Change: David, thanks for the question and good morning. So let's maybe unpack these part by part or piece by piece, Alstad and Suki Bial mains, feel free to add. So starting with the Q1, if you add to Q1, the 2.3% constant currency, if you add the impact of the one day list.
Suketu Upadhyay: In Q1 of 25 versus 24, that number is between 3.5 to 4%. So close to that midline or a mid single digit growth commitment.
Suketu Upadhyay: Q2, we do have some time in events in EMEA, Euro Middle East and Africa. .
Suketu Upadhyay: that some orders that are getting matlated in the year. [inaudible]
Suketu Upadhyay: We do have the most difficult comp versus Q2 of 2024. So recall that Q2 of 2024, we grew 5.6% XFX on near 6%. We do have still some new products that are not in full launch mode.
Suketu Upadhyay: The second half of 2025 is meeting with the new growth based on comps to your pawn on the ERP debacle that we had in 24 and just a lot of new products happening in the second half. We're going to see all four parts of cement is here in the US.
Suketu Upadhyay: at Full Speed, with a personal revision in Europe at Full Speed. We got many launches happening in the set category in the second half.
Suketu Upadhyay: And we do have a persona Aussie Tai, at that point probably close to 30% penetration in the US, so it's a lot happening.
Suketu Upadhyay: in the second half of 2025 when it goes to new products. [inaudible]
Suketu Upadhyay: And we feel extremely confident that those new product introductions are going to materialize.
We're tracking the number of product trainings that we do.
Suketu Upadhyay: We are weakly tracking supply chain dynamics, making sure we have the right amount of sets in the market. We're tracking or contracting capabilities, making sure that these new product introductions are going to happen.
Suketu Upadhyay: So, again, NetNet, we are extremely confident that the new product execution, new product launch execution is going to materialize
Suketu Upadhyay: So when you look at that, and again, in the backdrop of each year comes, we feel very confident that our growing guidance of 0.5% is going to get executed upon. Hopefully, according for now, we're talking about a higher commitment in terms of where we fought within that guidance. So again, anything to add? I think that's awesome.
Thank you very much. Thank you. Thank you.
Thanks David.
and many more. Thank you. Thank you.
We'll take our next question from Christopher Pasquale with Neffron
Chris Pasquale: Thanks. Ivan, you highlighted a nice performance in US hits which was certainly encouraging. You just wanted to clarify...
Speaker Change: When you say that 50% of Z1 users today have been competitive accounts [inaudible]
Speaker Change: Are those true new disemmered surgeons? Or did that include surgeons who were maybe already customers on the knee side?
Speaker Change: And then just to put a finer point in that second half growth driver list, you just ran through, should we expect the CD impact from new products on the knee sides to come through as soon as third quarter? Or is it going to be later than that? Thanks.
Speaker Change: Thanks, Chris. I'll start with the second question. I do believe we're going to see some of the apthic of new producing needs within Q2, here in the US.
Speaker Change: So I don't think we need to wait to see Q3.
Thank you very much.
Speaker Change: Some knee growth momentum in the U.S. within Q2, early in the quarter, we already seen that. Relative to your first question on hips, these are true new customers.
Speaker Change: DeMarabins and Customers I will lose years ago, but he is 50% of the growth in the US in Hips, that's 3.10% is through new conversions, Customers that are not users of Hips for Zimmerman. Thank you very much for your time.
Speaker Change: We expect that the number to continue to grow as we get into Q2 all the way through Q4 to 2025.
Matthew O'brien: Thank you. We'll take our next question from Matthew O'Brien with Piper Sandler.
Matthew O'brien: Morning, thanks for taking a question. Why don't I ask a little bit about pricing? Excuse me, so last four quarters of pricing have been up 80 basis 0.760 now.
Matthew O'brien: Up 10 basis points, and I'm just wondering if, you know, and that plus 10 is off of flat Q1 of 24. So are we to the point now where, you know, the tailwinds we're seeing on the pricing side or largely behind us? Are we going to start to see that roll over and get negative? We're going to start to see what we're going to do.
Matthew O'brien: Like we've seen historically, and I guess with all these new products coming out that are higher priced in this ASP tail when you should be getting, is it going to make it more difficult to really sell those products in an environment where pricing starts to get a little bit tougher? Thanks.
Matthew O'brien: Matthew, thank you for the question. First I start with, we entered the year with a guidance assumption that pricing would be flat to down 50 basis points. So delivering on the first quarter at concert 10 is a little bit better than what we originally expected and therefore we're improving our outlook on overall pricing to be...
to be flat, for this year. [inaudible]
I would say as compared to 2020.
Matthew O'brien: Four, you're right, the number has stepped down, but that's something we anticipated as I said with our initial guide. Thank you very much.
Matthew O'brien: And remember, we talked extensively about in 2024 a number of sort of one-time items outside of the US that were creating a much more favorable pricing environment which we did not expect to repeat.
in 25 and beyond.
Matthew O'brien: So you're seeing that, you're seeing that play out. As we move forward again, we...
Matthew O'brien: The majority of our business is contracted, so we have good visibility into how we expect pricing to operate.
Matthew O'brien: We're performed for the rest of this year and that gives us confidence and...
Matthew O'brien: and that outlook of being about flat. And then as we move forward, we continue to see the pricing environment be relatively stable compared to our historical norms. And that's really one, you're seeing really good pricing out of our new products and those pricing.
Matthew O'brien: That pricing hold, too. I think you're seeing much better competitive sort of response to overall pricing. And third, just internally, from a capabilities and governance standpoint, we're a much better company when it comes to price. Then we have been...
Matthew O'brien: and in fact even in sending to ensure that the field force operates with a strong sense of margin in addition to revenue growth. So those are all the factors that give us confidence that that pricing is stable at least in the near term.
Matthew O'brien: Related to tariffs, I think it's too early to call at this point, you know, we're closely monitoring input costs, we're closely monitoring third party contracting, facts and costs have not seen anything out of the ordinary on either one of those fronts.
We are looking ourselves at potential opportunistic price increases.
Matthew O'brien: Across our portfolio, I would not count on that as a major offset to overall tariffs, but we're going to be opportunistic where we see a light there. So really that's our view on pricing just to bring it back. We're doing a little bit better than our original guy for 2025.
and many more. Thank you. Thank you.
Thank you. We'll go next to Matt Taylor with Jeffrey.
Thank you.
Matt Taylor: Hi, thank you for taking the question. I didn't want to just follow up on the tariffs and clarify when you said the 60 to 80 million.
Matthew O'brien: Headwind for 2025, includes some mitigation, I guess I just wanted to add. Now, let's get started.
Matthew O'brien: If you could give it about what the heaven would have been without mitigation and...
Matthew O'brien: Maybe just talk through some of the main sources of this segment so we can understand, assuming things continue to change, how your exposure may continue to change with the policies around different geographies. [inaudible]
Matthew O'brien: Yeah, thanks for the question. So again, the mitigations have really been around, again optimizing across our portfolio for country of origin, which is the key driver that determines tariffs in addition to transfer pricing.
Matthew O'brien: So actually where you produce is directly indicative of overall tariffs but it does come down to country of origin and transfer pricing. So our internal teams have done a really nice job of driving optimization there. And secondly, we've made changes in how we source product. Thank you very much.
China remains our largest exposure when it comes to terrorists [inaudible]
Matthew O'brien: So we've, you know, we've put a good bit of inventory into the country.
Matthew O'brien: before the terrorists were enacted, and secondly, we're evaluating continuing a source from China from Europe , as opposed to the United States, where it makes sense. So those are some of the levers that we're pulling. So again, we're just looking for any opportunity we can to offset that.
Speaker Change: Product coming out of China into the United States. So as we see movements and policy there are tariffs that could be a large driver of future changes on overall tariff.
Speaker Change: Profile for the company, but yes, so overall I think we're pleased where we started. I think there's more work to be done relative to our ability to mitigate future tasks.
Speaker Change: Thank you, we'll take our next question from Larry Biegelsen with Wells Fargo. Let's go.
Thank you. Thank you. Thank you.
Larry Biegelsen: Thank you for taking the question. Just a Suki-1 clarification, your commentary on 2026 wasn't clear on the net impact of the tariffs and the...
Speaker Change: and the tailwinds you mentioned. And just for my question, Ivan.
Speaker Change: You know, it's striker's recon growth particularly, it's US knee growth continues to be a lot higher than the other three competitors and
Speaker Change: We can all see that obviously. We did a lot of channel checks around AOS, and we continue to hear that the difference is really just still Mako. So how much do you think that's the case? And what are you doing to make Rosa more competitive? Talk about the three new modalities coming and the implications. Thank you. Thank you.
Speaker Change: Sure, Larry, I'll start with that and I'll know if Suketu wanna provide more clarity on 2026 or nothing, we said plenty around 2026 Terrives.
Speaker Change: Hey, we got to do better when it comes to a new performance in the US. Nobody here is pleased with 0.2% growth in the quarter. That said, none of us are surprised about the new performance or the number in the quarter. We knew that there was going to be a facing with niece performance in the US and we very confident the second half is going to be better.
Speaker Change: Relative to Rosa, we've done 350,000 surgeries with Rosa and Sons Wuensch. We are the number two player in the U.S.
Speaker Change: We continue to see a celebration of penetration quarter by quarter. A couple of weeks ago we submitted our 5th and K submission, that's a 90-day approval submission .
We call Ross and me B-1-5.
Speaker Change: We believe there's going to be a dramatic transformation of ROSA in itself.
Speaker Change: The value proposition of Ross and me one five is going to enhance surgical accuracy and reproducibility [inaudible]
Speaker Change: by improving soft tissue laxity, a different user experience. The platform has the ability of doing a kinemarica knee. It has a new auto balance procedure. It's faster, it's simpler, it's a streamlined. Thanks for watching, see you in the next video.
Speaker Change: So we believe there's going to be an improvement on the current version of Rosa.
Speaker Change: On top of that, right after that, we're going to be submitting at some point for the CT scan, Rosa Plaffle.
as well as Thunder Road, a different partially platform. [inaudible]
Speaker Change: So look, I don't think the robot is the main reason why we are behind when it comes to a new performance in the U.S. It has to with the fact that we have the largest share, and the fact that we're going to do better when it comes to commercial execution, and we're going to prove upon that.
Speaker Change: And as I mentioned in my earlier answer, I do think already within Q2, you're going to start to see some improvement in U.S. Nice and as we get into the second half of 2025, I think you're going to see a celebration when it comes to our U.S. Nice. [inaudible]
Speaker Change: Yeah, Adler, thanks for the question. I'll go back to some my earlier comments and maybe try and rephrase them. So, I did say that 2025 should not be used as a run rate for 2026 and that you should expect 2026 tariff impact to be higher than 2025.
Speaker Change: Now, we're not ready to side that at this time because there are a number of puts and calls and...
Speaker Change: and uncertainties that would prevent us from sizing that with precision at this point.
Speaker Change: But there are some headwinds and tailwinds to help shape that discussion from a headwind perspective. First, you're going to have annualization, right? So you only had tariffs for part of the year this year. So if you're assuming you have for four, 12 months next year, that would be a headwind. You're going to have a headwind. You're going to have a headwind. You're going to have a headwind.
Secondly, like most companies, the tariff's impact costs are good . . .
Speaker Change: That gets inventory at some level and then capitalized and rolled into the P&L of future periods. That would be a headwind as we moved into 2026.
Speaker Change: The third element is we're assuming that the retaliatory tariffs go back in place once the 90-day pause period ends in July of this year.
Speaker Change: So, assuming that that pause period doesn't happen in 2026, that could also be a potential headwind. Again, the environment is fluid but we're giving you what we know based on the most recent assumptions and announcements from the administration.
Speaker Change: From a tailwind perspective, we're going to continue to look at sourcing changes that could minimize or improve the tariff impact .
Speaker Change: Secondly, we're going to look at portfolio optimization, so certain products, for example in our need portfolio or source from different locations.
Speaker Change: We may choose to emphasize one product versus an over, another one based on tariff profile. And then the third one is, we're going to constantly, as we all always done, look at discretionary spending. [inaudible]
Speaker Change: essentially all said tariffs. So again, we're not ready to size 2026, I don't think any company has been out there sizing 26, but what we didn't want to do is give you some of the headwinds tailwinds that could shape that that profile for next year. [inaudible]
Thank you. Thanks, Larry. We'll take the next question from...
Speaker Change: We'll take our next question from Josh Jennings with TV Cowan.
Please see the complete disclaimer at https://sites.google.com
Josh Jennings: performing relatively similar in those two channels, or it's gonna be outperforming in one versus the other. Just wanted to get a handle on that as this A&C migration is taking a bigger interest. Thanks a lot.
Josh Jennings: Hey, thanks a lot, Joseph, and good morning. So roughly today, I would say 20% if not as likely about 20% of ourselves.
Here in the U.S. come from the AC environment.
Josh Jennings: He used to be somewhere around, you know, two to four percent prior to COVID, so definitely there's been a shift . . . .
Josh Jennings: We continue to believe that none but it's gonna grow.
Josh Jennings: The data that we are triangulating shows that between 40 to 60% of cells in the next five years.
Josh Jennings: are going to come from an ASC environment. We like that trend with the introduction of the magnificent seven and some of the acquisitions we've done in set, Paragon 28, but before that,
Josh Jennings: In terms of what are we doing better, we are historically having been on the number one reconstructive company in the AC space for Nissan Hitz, and so we don't better, but we're growing now at a faster patient set.
Josh Jennings: So notice in the quarter, we grew globally, set 5%, it's the sixth quarter in a row that we grew and said that the meeting will be out of both. Frankly, that number could have been higher in the quarter, but we had to...
Josh Jennings: with some one-time events in a or sports medicine business in the US. So growing at a night's clip at a faster pace in a set and we believe that's going to accelerate as we expect to hear. Thanks for the question.
Travis Steed: Thank you. We'll go next to Travis Steed with Bank of America.
Travis Steed: Hey, thanks for taking the question. I wanted to ask about Q2. The slightly higher comment was that higher than the 2.3% constant currency or days adjusted and then any quantification on the shift of orders from Q2 into the second half is that, you know, work 50 basis points or more or less.
Travis Steed: Yeah, it's off of the constant currency number, the 2.3 number we posted in in the first quarter. And, you know, we're not we're not we're not sizing the overall impact for those for those orders. We're not really giving quarterly guidance, but we just wanted to give some directional shaping for your moms. [inaudible]
Thank you [inaudible]
We'll take our next question from Joanne Wench with Citi.
Travis Steed: Good morning, and thank you for taking the question. Your other category was relabeled technology, data, incident, and surgical. I'm always curious when people change the name of things. I'm curious why you chose to do that and how do we think about those bits and pieces? Is this an area also for when you talk about portfolio optimization or M&A? Thank you.
Speaker Change: Hey, good morning, Joanne, I'm thank you. Hey, we like the new name better than the other name, Pond Intended, used to recall others.
Travis Steed: We have in their bonsiment, we have surgical, and then we have enabling technologies. And enabling technologies is one of the fastest growing businesses at Zimmer Biomet.
Speaker Change: So to bucket that into the category of other, is probably not appropriate. [inaudible]
Speaker Change: So, that's the, we always change the Inomenclature on the category of the category.
Speaker Change: or other category as you saw in the quarter actually decline that has to do with heavy
So we grew that category around 10 plus per cent in that quarter
Speaker Change: No much to read into that data point other than heavy combs. We continue to see robotic adoption being very, very high.
Speaker Change: but that we're installing more units in the quarter than selling. So a quarter ago we had a lot of sales for Rosa, and at this quarter we had a lot of installs. So that's the main reason why we're declining the quarter, and that's the rationale behind the nomenclature to change. Thanks for the question. Thank you.
and many more. Thank you. Thank you.
We'll go next to Caitlin Cronin with Canacord Genuity.
Caitlin Cronin: Hi, thanks for taking the question. Just a touch on the Paragon acquisition. I mean any kind of early news there and then kind of updates on the timeline for the integration. Thank you.
Caitlin Cronin: What is going on, Caitlin, thank you for your question. He's going far better than expected.
Caitlin Cronin: So we had two or three goals at the onset of the journey. Goal number one was to retain the leadership team, Albert Dacosta, former chairman and CEO .
of Paragon 28.
Caitlin Cronin: Their Chief Commercial Officer, Matt Jarval, and the entire, again, commercial recipe, checked on that, all of them have signed with Zimmer Biomet . . .
Caitlin Cronin: goal number two was to have minimal disruption in the field close to the customer. They have around 250 self-reps
Caitlin Cronin: that have been growing that business strongly in the teams. We wanted to make sure that we could sign every one of them and check on that as well. So all of them have transferred over to Zimmer Biomet.
Caitlin Cronin: And then goal number three was to preserve the innovation journey, the innovation platform.
They have a lot of new product launches happening.
Caitlin Cronin: and we're not disrupting any of them. We're going to keep the Design Center for Paragon 28 other in Denver. We're not integrating their processes into Zimmer Biomet, rather the gate. We want to make sure that we're doing things quickly, safely by quickly. So I will say a plus on that as well.
Caitlin Cronin: We closed the integration on April 21st, great momentum early in the year, and we look forward to updating you as quarter's gone But this is a great acquisition and so far everything is going fantastic Thank you very much.
and many more. Thank you. Thank you.
Thank you. Thank you. Thank you.
Speaker Change: Thank you. We'll go next to Richard Newitter with tourist securities. We'll see you next time.
Caitlin Cronin: Thanks for taking the question. I thought I heard earlier in the prepared remarks something about a Salesforce reorganization or optimization.
Caitlin Cronin: If you could just elaborate a little more on what exactly that is, what prompted it? [inaudible]
It sounds like that's new. [inaudible]
Caitlin Cronin: Is there any negative impact that's contemplated in, granted, you know, you reiterated your constant currency guidance for the year? Is there anything that's implicitly contemplated from a headland on that standpoint, incrementally now? [inaudible]
Caitlin Cronin: Thank you, Richard. So, first things first with the final part of your statement. So, no, we're not changing guidance, there is no impact whatsoever on either revenue or EPS associated with the evolution of the change. And I want to emphasize that that worth evolution. We've been doing this for a while, we're going to go faster at it. Why do we need to make changes in the US? Well, you cannot grow the US new business 0.2%.
So, we make changes.
We're making changes in terms of some leaders.
We make changes in terms of the quantity of territories.
Caitlin Cronin: We have made changes in terms of the incentive plan as a result of the lack of growth. Certain individuals would be exiting the organization fairly soon.
Caitlin Cronin: And we're just changing the whole dynamic in every car when it comes to the US dynamic. We've been talking about specialization for a while. We need to have the right amount of people behind the right, the right businesses.
We believe we can grow faster in set, we add additional capabilities, so we're going to be deploying more people into set.
Caitlin Cronin: We know we can do better in robotics. We have the right quantity and quality of individual so that's another change we're making. And then the AAC.
Caitlin Cronin: We're growing stronger in the teams and we believe we can do better. So we're going to add additional people in the ASC environment. So again, changes making sure we have the right quantity and quality of leaders, changes around the incentive plan. I know this is not something that is new. We just go and fast it out because we deserve to grow at a faster pace in the US. Thank you very much.
Shagun Singh: Thank you. We'll take our next question from Shagun Singh with RBC.
Shagun Singh: Great, thank you so much. I was wondering if you can elaborate on your appetite for M&A post the Paragon 28 acquisition, more specifically, how are you thinking about further boosting your position in the ASEs? And then also expanding potentially into new adjacencies, maybe in and out of the hospital, as you think about raising your weighted average market growth further beyond the mid-single digits? Yeah.
Speaker Change: Thanks for the question and good morning. So we even after doing part of 128 and in the backdrop of Terrives, the far power is pretty strong here at Zimmer Biomet. We have a very strong balance here. Thank you very much.
Post Paragon 28, or Leveris Ratio, is in the Mithris. [inaudible]
Speaker Change: In a couple of quarters, given the strong cash flow generation of the company, he's going to go to the Lothreese again . . .
Speaker Change: Prior to a Paragon, he was in the lotchews. So again, there is plenty of ammunition to do a smart emanate. Deals that make strategic and financial sense, we're going to take a look at.
Speaker Change: Acquisitions similar to Paragon 28, where we can keep EPS dilution to within 3% a year one neutral by the end of year two. We're going to do those deals, deals that make sense, we know that we can integrate, we're going to look at them. [inaudible]
Speaker Change: It is going to be the number one recipient of a capital location strategy, and we're going to go at it. We have built a best in class integration dynamics. We got the proper governance. [inaudible]
Speaker Change: We got a new head of business development with ample experience in this area. So, yeah, we're going to be responsible at the right pace, but it will be the number one priority for the consumer environment.
Speaker Change: In terms of areas that we like, it's a pretty repetitive speech. Yes, anything that happens in the ASC we like, anything that makes sense we think set we like.
Faster growth categories we've seen orthopaedics data technology we like [inaudible]
Speaker Change: We don't need to go outside of our core masculine skeletal health. [inaudible]
For the time being.
and at some point we will.
Speaker Change: We want to be in a 5% Wengard environment by the end of 2027, and as we exit the decade, closer to 2030, that number needs to be higher. So the appetite is high, we're going to be responsible, but we're going to go at it. Thanks for the question. Thank you.
We'll take our next question from Rick Weiss with Steeple.
Rick Weiss: Good morning, hi, Ivan. I was hoping you would expand a little more on your progress with the Oxford Parcel Summit, let's me. You sound excited, you've trained several hundred customers.
Rick Weiss: My impression, if I remember correctly from AUS, that you hope to train maybe a thousand by year end, are you?
Rick Weiss: How long do you think it takes for the Oxford cementless here in the US to match the 60% of the mix in Europe ? Thank you.
Rick Weiss: Thanks for the question. I think this is one of the most exciting products that we're going to be launching for a while.
Rick Weiss: As a reminder, it's the only PMA-approved partial cementless system in the US.
Rick Weiss: I do think it's going to be north of the 1,000 trainees by the end of 2025.
Rick Weiss: Already done close to 400. We've done training events in Dallas. We had around 250 people there. Chicago, we're going to be in Nashville coming up. So I do think that number is going to be north of 1000. 1,000.
Rick Weiss: You got a train for the product before you use the product.
Rick Weiss: But it's not a lengthy deal. So after you train, a couple of cases you're good to go.
So we'll be north for 1,000. We are...
Put in the product in.
Many contracts.
Athena, or contract power penetration is around 50-55% today [inaudible]
Rick Weiss: The number is going to be around 70-80% as we enter into the second half of 2025. And again, I've seen this going to be one of the most exciting further glances here at Zimmer Biomet. Thank you.
We'll take our next question from Jeff Johnson with Beard.
Jeff Johnson: Thanks, good morning, guys. Maybe two clarifying questions just if I could squeeze them into one if possible. So, Sufi, you talked about opportunistic price increases. Just any kind of color you could provide there. I would assume that's probably more on the capital side, maybe than on the implant side, but any clarification there. And then just again, not to go back to the 2026 tariff, but I'm going to, you know, just as I hear your kind of explanation, thinking about your inventory turns, you talk about greater than 50% of that 60%
Thank you.
Jeff Johnson: Yeah, so let me start with the first question on the opportunist question. I think it is going to be more in the capital area. So our recon business tends to be heavily contracted, so there's less near term opportunity there. So it's really areas where you don't have contracting, which is, you know,
Jeff Johnson: Capac's surgical, those are probably good surrogates for the areas where you can take better price.
on the run rate, I would not use.
Q4 as a run rate moving into next year.
I remember a capitalization while it's different product by product segment.
Jeff Johnson: We have about a year's worth of inventory, so it is going to take a bit longer [inaudible]
Jeff Johnson: for that run rate to manifest itself because by the time we get to Q4 you're only about a half way, a little bit more than a half way through the terrace.
Speaker Change: Thank you. Thank you. We'll take our final question from Mike Matson with Needham and Company.
Mike Mattson: Yeah, thanks, Ivan. I wanted to ask about the anti-microbial technologies and the iodine coating. I mean, this seems like something that…
Mike Mattson: Could potentially really differentiate Zimmer Biomet. I don't know if any of the other companies are really working on this stuff. So can you maybe just talk about what you're hearing from the FDA in terms of iodine coatings? [inaudible]
Mike Mattson: You know, what you're going to have to do to get that launched in the US and then, you know, are you willing to look at any kind of outside, you know, technologies in terms of acquiring or partnering with other companies? Thanks.
Thank you.
Speaker Change: Thanks for the question, Mike. So, first things first, the approval of the iodine treated hip that we launched in the United States outside of the U.S. This is in Japan.
Speaker Change: We'll come in the U.S. at some point. We're rather not speculated here today, but we do have a pathway to get these...
Speaker Change: in the U.S., and it is going to be transformational. It is the only platform in the world.
Speaker Change: that has data on preventing biofilm formation on the implant surface by luring over a prolonged period of time.
Speaker Change: So, tons of data in that regard, on an infant that has table fixation, so we do them this to be transformational.
Speaker Change: We're not doing just courted implants. We got technology that expedites surgeries [inaudible]
Speaker Change: We have external investments in companies that work on infection in the region.
Speaker Change: As I mentioned, my paper remark is one of the key four points I was trying to solve. So it's more than coded devices, it's more than technology, it's a lot of different things, a lot of shots on goal when it comes to infection. So, but again, we will be launching Ayodhina at the end of 2025 here in Japan. And we will be launching Ayodhina at the end of 2021.
Speaker Change: Outside of the US, and we have a plan to get this into the US as soon as we can [inaudible]
and many more. Thank you. Thank you.
Speaker Change: Thank you. That will conclude our question and answer session. At this time, I'd like to turn the call back over to Evan for any additional or closing remarks.
Ivan Tornos: Thanks, Katie, and thanks everybody for joining the goal. I know there's a lot going on. I don't envy your jobs these days.
Ivan Tornos: Privilami, a minute, I'd like to recap the quarter and where Zimmer Biomet is today in five very simple bullet points.
Number one, the markets remain strong. [inaudible]
Ivan Tornos: We continue to see that the waiting list for procedures, especially in the US, is very long, as a matter of fact that waiting list is in the top ten institutions almost twice [inaudible]
Ivan Tornos: What are used to be a priority to COVID? And now this is none backlog from COVID, so healthy markets is data point number one data point number two We are today reaffirming or constant currency organic revenue guidance [inaudible]
Ivan Tornos: 3 to 5 percent, which we feel extremely confident of achieving. And then on top of that, thanks to Paragon 28, we're going to bring an additional 270 basis points of revenue growth for the year. So again, keeping the guidance, we have to make the guidance with a high degree of confidence.
Ivan Tornos: Data point number three, as you heard from Suk and I over and over, we're fully upsetting the EPS dilution related to teres [inaudible]
Ivan Tornos: One minimized in the EPS dilution associated with the acquisition of Paragon 28, just like we said that we will do
Ivan Tornos: So the EPS dilution with Paragon 28 is less than 3% on year one, and it's the EPS neutral at the end of year two. So doing a solid job in navigating disturbance around teraves and acquisitions. [inaudible]
Data point number four, we really encourage.
with the performance of key new product introductions.
Ivan Tornos: We've seen great momentum with hips, almost 4% growth in hips in the court in the U.S. As we get into Q2, Q3, we're going to continue to see that just noting hips but also in knees. And we are very confident about the ramp up in new products in the second half of 2025. 25.
Ivan Tornos: We're very pleased. The next data point, we're very pleased with integration with Patagon 28. So data point number three, we're very, very pleased with how Patagon 28 is going. And we expect the growth in the teams that this company has had to continue here at Zimmer Biomet. [inaudible] We're very pleased with how Patagon 28 is going.
Ivan Tornos: So that's the core five messages I'll leave you with, other than gratitude for joining the cove. Thanks a lot.
Thank you.
Ivan Tornos: Thank you. That will conclude today's call. We appreciate your participation.