AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Proprietary rights and customer relationships exist, but their relative competitive benefit is not established. Uncertainty reflects insufficient evidence, rather than demonstrated interchangeability.
durability · — · No demonstrated duration of protected economic advantage is supplied. Patent risks and expected robotics benefits cannot establish durability.
customer dependency · — · Relationship knowledge and an attrition-based accounting policy do not establish customer dependence or costly switching.
erosion resilience · — · Price declines, procurement effects and distributor disruption show pressures, while product demand persists. Without an established structural advantage, its resilience cannot be graded.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Positive price realization contributed to 2024 growth, but global prices reduced first-half 2026 sales by 0.7% and second-quarter sales by 0.8%. Volume discounts contributed to the decline, demonstrating fragile pricing power.
retention · 2/4 · Indirect operating evidence supports continuing demand through product sales and growth, alongside established customer relationships. Acquisition contributions, currency effects and opportunistic purchases prevent treating growth as proof of strong customer retention; no retention rate is inferred.
margin resilience · 2/4 · First-half segment profit increased from $1,546.9 million to $1,564.8 million, lagging sales growth from $3,986.4 million to $4,263.7 million; second-quarter segment profit declined despite higher sales. Higher consolidated pretax earnings provide an offset, but historical procurement-related margin reductions limit evidence of pricing-led resilience.
contractual freedom · 1/4 · Purchasing groups negotiate prices and can impose supplier exclusivity, while China's procurement processes have required distributor renegotiations and reduced margins. These disclosed constraints support a weak grade despite incomplete customer contract terms.
Predictability92
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 7.60
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 0.41
Financial strength46
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 41.34
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 42.61
- currentRatioGrade
- 98.53
- Debt / FCF (x)
- 5.11
- Net debt / operating income (x)
- 6.31
- Current ratio (x)
- 1.98
- cashInterestPaid
- 298.40
- cashInterestCoverage
- 5.69
Capital allocation82
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.74
- 3-year average dilution (%)
- -1.87
- 3-year average SBC / revenue (%)
- 1.25
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half 2026 operating cash flow of $807.2 million funded substantial instrument and plant investment. However, $500.8 million of repurchases used cash and revolving borrowings, alongside technology spending and acquisition obligations. Paragon 28's $1,276.5 million consideration is documented, but returns on that investment and projected restructuring savings are not demonstrated.
incentive alignment · 3/4 · Actual 2025 compensation disclosures show substantial equity weighting and cash incentives tied to revenue, adjusted operating profit and free cash flow. Ownership multiples, mandatory share retention and clawbacks provide strong disclosed alignment mechanisms. Actual ownership compliance and complete long-term performance conditions remain unestablished.
execution · 2/4 · Indirect operating evidence is mixed: product demand and cash generation continued, shipping recovered after the 2024 ERP disruption, and Monogram achieved a development milestone. Order-fulfillment disruption and China distributor claims show execution costs. Growth includes acquisition, currency and purchase-timing benefits, so it cannot establish exceptional management execution.
governance · 3/4 · Disclosed annual director elections, independent committees, shareholder rights, a lead independent director and clawback policies support strong formal governance. The reported unqualified 2024 internal-control audit adds demonstrated oversight evidence. Combined chairman and CEO roles remain a limitation; the independent-chair shareholder proposal is not treated as adopted.
Evidence
Our success depends in part on our proprietary technology, processes, methodologies and information.
Risk factors / reliance on proprietary technology · Filed 20/02/2026
We rely on a combination of patent, copyright, trademark, trade secret and other intellectual property laws and nondisclosure, license, assignment and confidentiality arrangements to establish, maintain and protect our proprietary rights, as well as the intellectual property rights of third parties whose assets we license.
Risk factors / intellectual property protection arrangements · Filed 20/02/2026
In addition, opportunistic end-of-quarter customer purchases, increased ROSA® Robot and bone cement sales, market growth and new product introductions contributed positively to volume and mix trends in both periods.
MD&A / realized volume and mix contributors · Filed 05/08/2026
Monogram's semi- and fully-autonomous robotic technologies are expected to add to our suite of orthopedic robotics, enabling solutions and analytics to address the needs of surgeons pre-, intra- and post-operatively.
Acquisitions / expected Monogram robotics benefits · Filed 05/08/2026
Further, our currently pending or future patent applications may not result in patents being issued to us, patents issued to or licensed by us in the past or in the future may be challenged or circumvented by competitors, and such patents may be found invalid, unenforceable or insufficiently broad to protect our technology or to provide us with any competitive advantage.
Risk factors / patent challenges and circumvention · Filed 20/02/2026
Pricing Trends Global selling prices had a negative effect of 0.8 percent and 0.7 percent on year-over-year sales during the three and six-month periods ended June 30, 2026, respectively.
MD&A / realized global selling-price effects · Filed 05/08/2026
Additionally, certain of our key employees and third parties have detailed knowledge of our products and instruments and have developed professional relationships with existing and potential customers due to this knowledge.
Risk factors / product knowledge and customer relationships · Filed 20/02/2026
For customer relationship intangible assets, we assign useful lives based upon historical levels of customer attrition.
Accounting policies / customer relationship attrition · Filed 20/02/2026
Recent legal and regulatory changes may affect our ability to enforce post-termination obligations from certain employees and third parties with respect to non-competition, non-solicitation and protection of confidential information, which may negatively impact our ability to retain key employees and third-party distributors and to protect our information and relationships with our customers.
Risk factors / protection of employee and distributor relationships · Filed 20/02/2026
If we are not one of the providers selected by a group purchasing organization, affiliated hospitals and other members may be less likely to purchase our products, and, if the group purchasing organization has negotiated a strict compliance contract for another manufacturer’s products, we may be precluded from making sales to members of the group purchasing organization for the duration of the contractual arrangement.
Risk factors / purchasing-group supplier selection and exclusivity · Filed 20/02/2026
In connection with our ongoing efforts to transform our sales and distribution strategies and go-to-market model in China, including making significant changes across our independent distributor network, some of the displaced or impacted distributors in China have formally and informally raised legal claims against us.
Contingencies / China distributor legal claims · Filed 05/08/2026
Net sales growth was driven by a combination of market growth, new product introductions, positive price realization and commercial execution across the organization.
2024 MD&A / positive price realization and growth drivers · Filed 25/02/2025
In addition, volume-based discounts to incentivize customer purchases had a negative effect on our pricing in both periods.
MD&A / realized volume-based discounts · Filed 05/08/2026
Segment operating profit measures by segment are as follows (in millions): 24 Americas EMEA Asia Pacific Total Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2026 2025 2026 2025 2026 2025 2026 2025 Net Sales $ 1,359.0 $ 1,287.0 $ 478.5 $ 458.1 $ 339.5 $ 332.2 $ 2,177.0 $ 2,077.3 Cost of products sold, excluding intangible asset amortization 309.3 292.7 182.6 166.6 124.2 117.6 Selling, general and administrative 432.7 385.2 142.8 136.0 107.3 90.7 Research and development 71.1 73.6 1.9 1.7 3.9 3.5 Segment profit $ 546.0 $ 535.6 $ 151.1 $ 153.8 $ 104.1 $ 120.3 $ 801.2 $ 809.7 Corporate items 311.7 349.1 Intangible asset amortization 163.4 160.6 Other income (expense), net (1.9 ) (3.9 ) Interest expense, net 72.9 79.3 Earnings before income taxes $ 255.1 $ 224.6 Americas EMEA Asia Pacific Total Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 2026 2025 2026 2025 Net Sales $ 2,683.5 $ 2,493.8 $ 968.3 $ 899.9 $ 611.8 $ 592.7 $ 4,263.7 $ 3,986.4 Cost of products sold, excluding intangible asset amortization 618.0 570.9 369.0 332.5 212.1 201.0 Selling, general and administrative 858.2 744.8 292.3 259.3 195.3 175.9 Research and development 143.0 144.6 3.7 3.8 7.2 6.8 Segment profit $ 1,064.3 $ 1,033.5 $ 303.4 $ 304.3 $ 197.1 $ 209.1 $ 1,564.8 $ 1,546.9 Corporate items 540.1 643.1 Intangible asset amortization 325.5 311.6 Other income (expense), net 1.1 (6.9 ) Interest expense, net 141.7 145.5 Earnings before income taxes $ 556.4 $ 453.6 Depreciation and amortization included in segment profit is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Americas $ 45.1 $ 45.8 $ 90.0 $ 86.5 EMEA 16.8 15.9 33.8 31.5 Asia Pacific 15.7 15.0 31.1 30.2 Corporate items 29.8 34.5 60.4 66.4 Intangible asset amortization 163.4 160.6 325.5 311.6 Total $ 270.8 $ 271.8 $ 540.8 $ 526.2 16.
Segment reporting / sales, segment profits and consolidated reconciliation · Filed 05/08/2026
For example, China has implemented volume-based procurement (“VBP”) processes designed to reduce medical spending, which have in the past resulted in, and could in the future result in, reduced margins on covered devices and products, required renegotiation of distributor arrangements, and incurrence of inventory-related charges.
Risk factors / realized China procurement effects · Filed 25/02/2025
Group purchasing organizations negotiate pricing arrangements with medical supply manufacturers and distributors, and these negotiated prices are made available to a group purchasing organization’s affiliated hospitals and other members.
Risk factors / purchasing-group negotiated pricing · Filed 20/02/2026
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions, unaudited) For the Six Months Ended June 30, 2026 2025 Cash flows provided by (used in) operating activities: Net earnings $ 437.9 $ 336.0 Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation and amortization 540.8 526.2 Share-based compensation 48.8 40.8 Changes in operating assets and liabilities, net of acquired assets and liabilities Income taxes (80.1 ) (132.0 ) Receivables (24.0 ) (18.6 ) Inventories (51.4 ) (40.2 ) Accounts payable and accrued liabilities (91.0 ) 40.4 Other assets and liabilities 26.1 8.3 Net cash provided by operating activities 807.2 761.0 Cash flows provided by (used in) investing activities: Additions to instruments (162.6 ) (140.2 ) Additions to other property, plant and equipment (90.5 ) (94.7 ) Net investment hedge settlements 10.8 3.5 Business combination investments, net of acquired cash - (1,226.3 ) Acquisition of intangible assets (101.2 ) (32.4 ) Other investing activities (6.3 ) (0.3 ) Net cash used in investing activities (349.8 ) (1,490.4 ) Cash flows provided by (used in) financing activities: Net proceeds from revolving facilities 30.0 220.0 Proceeds from senior notes - 1,748.1 Redemption of senior notes - (863.0 ) Dividends paid to stockholders (93.4 ) (95.3 ) Proceeds from employee stock compensation plans 12.4 17.1 Business combination contingent consideration payments (69.2 ) (17.4 ) Debt issuance costs (1.3 ) (17.3 ) Repurchase of common stock (500.8 ) (237.0 ) Other financing activities (17.9 ) (16.1 ) Net cash (used in) provided by financing activities (640.3 ) 739.2 Effect of exchange rates on cash and cash equivalents 1.1 21.6 Change in cash and cash equivalents (181.9 ) 31.4 Cash and cash equivalents, beginning of year 591.9 525.5 Cash and cash equivalents, end of period $ 410.0 $ 556.9 The accompanying notes are an integral part of these condensed consolidated financial statements.
Statements of cash flows / first-half cash generation, investment and financing · Filed 05/08/2026
In the 2026 period, we repurchased $500.8 million of our common stock using cash on hand and net borrowings from our revolving credit facilities.
MD&A / repurchases funded by cash and revolving borrowings · Filed 05/08/2026
The following table summarizes the final estimates of fair value of the assets acquired and liabilities assumed related to the Paragon 28 acquisition (in millions): Cash consideration $ 1,241.5 Contingent consideration 35.0 Fair value of consideration transferred $ 1,276.5 Cash $ 15.2 Accounts receivable, net 42.0 Inventories 152.6 Prepaid expenses and other current assets 5.6 Intangible assets subject to amortization: Technology 324.0 Trademarks and trade names 44.0 Customer relationships 91.5 Intangible assets not subject to amortization: In-process research and development (IPR&D) 103.0 Property, plant and equipment 68.0 Other assets 2.4 Current liabilities (93.2 ) Deferred income taxes (89.8 ) Other long-term liabilities (1.9 ) Total identifiable net assets $ 663.4 Goodwill $ 613.1 The weighted average amortization periods selected for technology, trademarks and trade names and customer relationships were 10 years, 15 years and 5 years, respectively.
Acquisitions / Paragon 28 consideration and purchase allocation · Filed 05/08/2026
We expect to reduce gross annual pre-tax operating expenses by approximately $175 million relative to the 2024 baseline expenses by the end of 2027 as program benefits under the 2025 Restructuring Plan are realized.
MD&A / expected restructuring savings · Filed 05/08/2026
2025 Target Total Direct Compensation(1) NEO Base Salary Annual Incentive(2) PRSUs(2) (Grant Date Fair Value) RSUs(3) (Grant Date Fair Value) Ivan Tornos 8.2% 15.4% 38.2% 38.2% Suketu Upadhyay 15.0% 18.9% 33.1% 33.1% Kevin Thornal 6.5% 8.1% 42.7% 42.7% Jehanzeb Noor(4) 9.0% 9.6% 38.0% 28.8% Wilfred van Zuilen 21.4% 21.0% 28.8% 28.8% (1) Percentages are computed based on the underlying individual whole numbers and therefore may not equal 100%.
Executive compensation / 2025 target compensation composition · Filed 01/04/2026
Zimmer Biomet 34 Executive compensation Element and Key Characteristics Objectives Base Salary • Only fixed compensation component; payable in cash • Reviewed annually and adjusted when appropriate • 2025 NEO increases: 3.35% - 4.5% • Provide a base level of competitive cash compensation • Recognize increased responsibilities through promotional increases • Attract and retain executive talent Annual Cash Incentive Opportunity • Variable compensation component payable in cash based on performance against established goals and assessment of individual performance • Target awards are based on percentage of base salary • Tied to company financial results and individual objectives to drive total company performance in 2025: o 40%: Constant currency revenue o 40%: Adjusted operating profit o 20%: Free cash flow • Payouts for 2025 could range between 0% and 200% of target • 2025 NEO payouts: 125.9% of target for Messrs.
Executive compensation / 2025 cash incentive metrics and payouts · Filed 01/04/2026
We require executives to hold equity with a value equal to a multiple of six times salary for our CEO and two or three times salary for each other NEO.
Executive compensation / executive equity ownership requirements · Filed 01/04/2026
100% of net after-tax shares received upon vesting or exercise of awards must be retained until an executive meets the guideline.
Executive compensation / share retention requirement · Filed 01/04/2026
Incentive compensation to executive officers under cash and equity incentive plans are subject to clawback in the event of financial restatements, in compliance with NYSE listing standards.
Executive compensation / incentive compensation clawback · Filed 01/04/2026
As a result of this ERP implementation, we experienced operational challenges which affected our ability to fulfill certain customer orders.
2024 MD&A / ERP disruption to order fulfillment · Filed 25/02/2025
Shipping levels returned to similar levels that existed prior to the implementation by the end of the year.
2024 MD&A / shipping recovery · Filed 25/02/2025
The first development milestone was achieved in January 2026.
Acquisitions / achieved Monogram development milestone · Filed 05/08/2026
Corporate Governance Strengths Board Composition Board Oversight and Stock Ownership ✓ Diverse Board with effective mix of skills, experiences and perspectives ✓ Robust Board and executive succession planning and risk oversight ✓ Active Board refreshment and average Board tenure of 9.2 years ✓ Rigorous stock ownership guidelines for directors and executives; new stock retention guidelines for named executive officers ✓ Effective annual Board and Board committee evaluation process ✓ Directors and executives prohibited from hedging and pledging our stock under our insider trading policy ✓ Majority voting and director resignation policy in uncontested director elections ✓ Independent director equity-based compensation not paid out until cessation of service Board Structure and Independence Shareholder Rights and Accountability ✓ 100% independent director nominees, except CEO ✓ Annual election of all directors ✓ Lead Independent Director role ✓ Proxy access right for shareholders ✓ 100% independent Board committees ✓ Single class voting structure (one share, one vote) ✓ Independent directors regularly meet without management present ✓ Charter permits shareholders to call a special meeting ✓ Robust Code of Business Conduct and Ethics applicable to directors, officers and employees ✓ Compensation Recovery (“Clawback”) Policy covers incentive-based compensation X No poison pill X No supermajority voting requirements Zimmer Biomet 3 Proxy Statement SUMMARY Proposal 2 – Ratification of the Appointment of PwC Our Board recommends a vote FOR this proposal ● PwC’s report contained in our 2025 Annual Report is unqualified ● Audit and audit-related fees represent 85% of total fees paid to PwC for 2025 Proposal 3 – Advisory Vote to Approve Named Executive Officer Compensation Our Board recommends a vote FOR this proposal Executive Compensation Best Practices What We Do ✓ Pay for performance ✓ Require robust stock ownership guidelines ✓ Require termination of employment in connection with a change in control for accelerated equity vesting (double trigger) ✓ Require non-competition agreement for equity award eligibility ✓ Require shares received upon equity award vesting to be retained in accordance with stock ownership guidelines ✓ Subject executives’ cash and equity-based incentives to clawback, including in the event of: ● an accounting restatement due to material noncompliance with financial reporting requirements under the securities laws (as to cash bonuses and equity-based incentives that are performance-based) ● certain violations of our Code of Business Conduct and Ethics or other conduct deemed detrimental to the interests of the company (as to equity-based incentives) What We Don’t Do x Offer employment contracts to our executives, except as required in non-U.S.
Proxy / disclosed governance structure and established compensation policies · Filed 01/04/2026
jurisdictions x Pay dividends or accrue dividend equivalents on unearned performance-based equity awards x Provide excise tax gross-ups in new change in control severance agreements (since 2009) x Allow hedging or pledging of company securities x Reprice or exchange underwater stock options without shareholder approval Proposal 4 – Shareholder Proposal for Independent Board Chairman Our Board recommends a vote AGAINST this proposal ● It is important for the Board to have the flexibility to determine the most effective leadership structure using its best business judgment in light of the company’s circumstances at any given time ● A one-size-fits-all leadership structure is not in the best interests of the company or its shareholders ● A Lead Independent Director will be maintained whenever the Chairman is not an independent director ● The roles, responsibilities, and authorities of the company’s Lead Independent Director are equivalent to that of an independent Chairman, providing for an effective counterweight when the Chairman is not an independent director ● Our independent Board, which consists entirely of independent directors other than our Chairman and CEO, combined with the robust independent Lead Independent Director role and our strong corporate governance practices and policies, enable effective Board oversight Zimmer Biomet 4 Proxy Statement SUMMARY CORPORATE GOVERNANCE Every day, the Zimmer Biomet team works towards our mission of alleviating pain and improving quality of life for people around the world.
Proxy / combined chairman and CEO structure and independent-chair proposal · Filed 01/04/2026
PricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of our internal control over financial reporting as of December 31, 2024 and issued an unqualified opinion thereon as stated in their report, which appears under Item 8 of this Annual Report on Form 10-K.
Internal controls / reported unqualified auditor opinion for 2024 · Filed 25/02/2025
Net sales growth was driven by a combination of our Paragon 28 acquisition, positive effects of changes in foreign currency exchange rates, opportunistic end-of-quarter customer purchases, increased ROSA® Robot and bone cement sales, market growth and new product introductions.
MD&A / acquisition, currency, purchase timing and underlying growth contributors · Filed 05/08/2026
