ZBH · Zimmer Biomet Holdings, Inc.

Medical - Devices · mkt cap $16.2B · calls: Q1 FY2026 vs Q4 FY2025

63.0 conviction · conf-adj 61

conf 4/10 1-model

enthusiasm:24.0 · trend:8 · quantifies:5 · impact:0 · under_radar:14 · credibility:5 · business_impact:4 · disruption:0 · commitment:0 · confirmation:3

Enthusiasm latest 8 / prev 7 (rising)

ZBH’s AI story is surgical robotics and navigation: OrthoGrid as an explicit “AI-based” hip navigation product contributing to mix today, plus Monogram/mBos as a semi- then fully autonomous “AI-driven” knee robot slated for U.S. launch from early 2027. Management quantifies near-term impact mainly through bundled technology revenue growth and hip mix, not AI-specific revenue lines; the Monogram thesis rests on clinical timelines, rep build-out, and claimed sub-4-minute cases. Enthusiasm rose from strategic framing (Q4) to operational milestones (Q1 enrollment complete, AAOS feedback, AI-portfolio executive hire), but Persona IQ/connected data is discussed without the AI label and remains data-gated.

GROUNDED NEXT-FY IMPACT vs CONSENSUS

Grounded on actual base — revenue $8.2B · net income $0.7B · net margin 8.6% · diluted EPS 3.55

These are next-fiscal-year annual uplift estimates, not next-quarter numbers.

Aggregate next-FY est. rev uplift: 0.0% · next-FY EPS uplift: -2.35% · vs analysts: unclear · priced in: low (model's call-read: high; verdict above is the hard-data one used for ranking) · confidence: 4/10

Claim	Figure	Arithmetic	Next-FY Rev %	Next-FY EPS %
U.S. hip triple-play mix ~40% (OrthoGrid AI nav) engagement · soft	nearly 40%	Level mix share of U.S. hip stems, not incremental $; no disclosed U.S. hip-stem revenue or prior mix in claims → cannot compute Δrev (e.g. Δmix×H). Not additive to next-FY rev.
Tech/data, bone cement & surgical +12% (Q1 FY2026) revenue · soft	nearly 12%	Segment growth rate only; segment $ not in claims or financial base. Illustrative only (do not aggregate): if segment=8%×$8,231.5M=$658.5M and excess vs consensus FY26 rev growth 4.13%: $658.5M×(12%-4.13%)=$51.8M → 100×51.8/8,231.5=0.63% rev; @8.567% incr margin → $4.4M NI → 0.26% EPS vs adj NI $1,681M — segment % invented.
Technology sub-segment +30% (ROSA/TMINI, Q1) revenue · soft	30%	Sub-segment growth without disclosed sub-segment revenue base; cannot apply 30% to a $ denominator from inputs. Not summed to aggregate.
Monogram 102-patient clinical study enrollment other · soft	102 patients	Clinical milestone; no mgmt $ for trial cost or future revenue conversion in claims → no FY26 rev/EPS bridge.
>200 robotic clinical sales reps by end 2027 cost	over 200	Headcount anchored; overlaps 2026 robotics channel hire pool (deduped in aggregate). Ramp phasing not quantified separately → per-claim EPS not standalone.
>200 Monogram-dedicated sales reps (pre-launch) cost	north of 200	Same hire pool as 200-plus robotics reps for 2026 channel / mBos prep; not additive. Consolidated: 200×$250K=$50.0M pre-tax FY26 opex.
mBos procedure time <4 minutes productivity · soft	under 4 minutes	Operational claim; no $ throughput, utilization, or cost-save quantified → no rev/EPS.
mBos semiautonomous U.S. launch early 2027 revenue	early 2027	Next FY from 2025-12-31 base = FY2026; launch after FY2026 end → FY2026 incremental product rev = $0; 100×0/8,231.5M = 0% rev; 0% EPS.	0	0
mBos fully autonomous U.S. launch late 2027/early 2028 revenue	late 2027 or early 2028	Outside FY2026 attribution window → $0 to next-FY (FY2026) revenue/EPS.	0	0
200-plus robotics sales reps (2026 channel) cost	200-plus	200×$250K=$50.0M pre-tax FY26; after-tax drag=$50.0M×(1−21%)=$39.5M; rev_uplift=0%; eps_uplift=−100×39.5/1,680.59=−2.35% (adj/consensus NI basis, not GAAP $705.2M).	0	-2.35
U.S. tech/data, bone cement & surgical +10% (Q4 FY2025) revenue · soft	over 10%	Growth rate without segment $ in claims; cannot compute incremental consolidated rev for FY26.
U.S. ASC hip/knee penetration 20–22% (exit 2025) engagement · soft	20% to 22%	Penetration level of ZBH U.S. hip/knee cases, not Δpenetration or U.S. hip/knee $ revenue in claims → no FY26 incremental rev.

Assumptions: Next FY = FY2026 (calendar, fiscal year-end 2025-12-31). Incremental product margin on revenue = 8.567% (FY2025 GAAP net margin); tax rate 21% on opex only. Sales-rep cost = $250K fully loaded × 200 FTE (single consolidated pool for overlapping rep claims). EPS % vs consensus/adjusted NI $1,680.6M (FY2026 est), not GAAP NI $705.2M / EPS $3.55. mBos commercial revenue phased to FY2027+. No supplier-side AI revenue claims.

Top line: Hard next-FY (FY2026) product revenue from mBos = $0 (launch early 2027). Mix (40% triple play), segment growth (10–12%, 30% tech), and ASC penetration (20–22%) lack disclosed $ bases in claims—cannot sum to consolidated rev uplift; illustrative segment math at invented 8% mix would be <1% rev, excluded from aggregate. No adopter supplier revenue.

Bottom line: Only hard FY2026 bottom-line math is robotics rep investment: $50.0M pre-tax → $39.5M after-tax drag → −2.35% vs adj EPS base ($1.68B NI). Clinical study and <4 min case time are unquantified in $. Using GAAP NI would wrongly imply −5.6% EPS drag.

Consensus FY2026: rev $8,550M (+4.13% vs $8,211M), EPS $8.49 (+3.81% vs $8.18), NI $1,681M. Hard adopter aggregate: +0% rev, −2.35% EPS from reps—no quantified FY2026 AI revenue bridge; growth claims are rates without $. mBos upside is FY2027+ (cons rev $8,855M, +3.56%). Rep drag (~$40M after-tax) is ~24% of implied FY26 NI growth ($61M) if not in models—partial EPS risk, not upside vs street.

MODEL CONSENSUS (impact)

1-model degraded to composer only

other model unavailable: claude claude-opus-4-8: {"type":"result","subtype":"success","is_error":true,"api_error_status":429,"duration_ms":1063,"duration_api_ms":0,"num_turns":1,"result":"API Error: Server is temporarily limiting requests (not your

QUANTIFICATIONS

U.S. hip stem mix (triple play incl. OrthoGrid AI navigation): nearly 40% (Q1 FY2026, topline)
“our hip triple play of one which now represents nearly 40% of our U.S. Hips temps, OrthoGrid, or AI-based hem navigation platform”

Technology & data / bone cement / surgical segment growth: nearly 12% (Q1 FY2026, topline)
“Our technology and data, bone cement and surgical business grew nearly 12% in the quarter.”

Technology sub-segment growth (ROSA/TMINI; cited in Q&A): 30% (Q1 FY2026, topline)
“30% growth in technology in the first quarter”

Monogram clinical study enrollment: 102 patients (completed pre-Q1 FY2026 call, both)
“We recently completed enrollment in our 102-patient clinical study”

Robotic clinical sales reps (Monogram/mBos prep): over 200 (by end of 2027, bottomline)
“targeting to hire over 200 by the end of 2027”

Monogram dedicated sales reps (launch investment): north of 200 (ahead of early 2027 launch, bottomline)
“We are hiring north of 200 sales reps behind the launch of Monogram”

Expected mBos procedure time: under 4 minutes (at/after launch (if clinical proof holds), both)
“we can do cases under 4 minutes procedure times”

mBos semiautonomous U.S. launch: early 2027 (calendar, topline)
“launch of the semiautonomous version in early 2027”

mBos fully autonomous U.S. launch: late 2027 or early 2028 (calendar, topline)
“followed by the fully autonomous version in late 2027 or early 2028”

Robotics sales rep additions (channel plan): 200-plus (2026 channel transformation, bottomline)
“we're adding something like 200-plus sales reps in robotics”

U.S. technology & data / bone cement / surgical growth: over 10% (Q4 FY2025, topline)
“Our U.S. technology and data, bone cement and surgical sales increased over 10% in the quarter”

U.S. ASC hip/knee penetration (Monogram cited as future ASC fit): 20% to 22% (exit 2025, topline)
“we exited 2025 in the 20%, 22% range. So 20% to 22% of all the hips and knees that we did in the U.S. were done in ASC”

PAST (realized)

Q1 FY2026 — Ivan: OrthoGrid delivered its strongest quarter to date, with significant growth and accelerated adoption.
Q1 FY2026 — Ivan: We recently completed enrollment in our 102-patient clinical study.
Q1 FY2026 — Ivan: At AAOS, surgeon feedback on mBos was overwhelmingly positive.
Q1 FY2026 — Ivan: with enrollment complete in the Monogram clinical study.
Q4 FY2025 — Ivan: We debuted mBos at the Hip and Knee Society Meeting in Dallas… we've gotten just tremendous feedback.
Q4 FY2025 — Ivan: Our U.S. technology and data, bone cement and surgical sales increased over 10% in the quarter, driven by the strongest robotic capital sales quarter in over 2 years.

CURRENT (now)

Q1 FY2026 — Ivan: OrthoGrid, or AI-based hem navigation platform, in the U.S. hip triple play (~40% of U.S. hip stems).
Q1 FY2026 — Ivan: Continued strong ROSA and TMINI sales; technology and data, bone cement and surgical business grew nearly 12%.
Q1 FY2026 — Ivan: OrthoGrid solidifying as a core driver of our digital ecosystem.
Q1 FY2026 — Ivan: ROSA Shoulder moved to full market release; scaling deployments.
Q1 FY2026 — Ivan: Persona IQ connected-implant program tracking to expectations with published outcome/cost data.
Q4 FY2025 — Ivan: Robotics/navigation suite strategy continuing to pay dividends; adding 200-plus robotics reps as part of channel specialization.

FORWARD (guidance)

Q1 FY2026 — Ivan: U.S. approval and semiautonomous mBos launch in early 2027; fully autonomous in late 2027 or early 2028.
Q1 FY2026 — Ivan: Hire over 200 robotic clinical sales representatives by end of 2027 ahead of mBos.
Q1 FY2026 — Ivan: New CSTO role to lead AI-enabled robotics, software and data, smart implants and connected technologies.
Q1 FY2026 — Ivan: Exclusive orthopedic investor in Mobility Revolution Fund for AI data applications (among other musculoskeletal tech).
Q1 FY2026 — Ivan: Monogram cases potentially under 4 minutes; bold launch with heavy clinical and economic strategy investment.
Q4 FY2025 — Ivan: 2027 transform musculoskeletal space with mBos launch.
Q4 FY2025 — Ivan: Monogram positioned for ASCs (speed, efficiency, accuracy).
Q4 FY2025 — Ivan: Optionality to integrate robotics platforms at the right time while maintaining category breadth.

TRACK RECORD — PROMISE vs DELIVERY

50/100 track record too-early 6 calls reviewed

ZBH talks up AI navigation (OrthoGrid) and autonomous robotics (Monogram/mBôs) but almost never sets numeric AI KPIs; the few dated autonomy/commercialization targets are still in the future and remain on track with no elapsed misses in these six calls.

Launch semi-autonomous mBôs (Monogram) in the U.S. in early 2027 — promised Q3 FY2025
too-early Q1 FY2026 reiterated early-2027 launch after completing 102-patient study enrollment; product not yet on market.

Launch fully autonomous mBôs by end of 2027 or early 2028 — promised Q3 FY2025
too-early Still guided to late 2027/early 2028 in Q4 FY2025 and Q1 FY2026 with no slip disclosed.

Hire 200+ robotic clinical sales reps by end of 2027 for mBôs rollout — promised Q1 FY2026
too-early Hiring initiative newly stated; no headcount results reported in later calls in this set.

Monogram acquisition to contribute to revenue growth beginning in 2027 — promised Q2 FY2025
too-early Deal closed Oct 2025; revenue contribution not expected until 2027 per repeated guidance.

Monogram to reach high single-digit ROIC by year 5 post-close — promised Q2 FY2025
too-early Financial milestone (~2030) not yet measurable; no ROIC update in subsequent calls.

Monogram deal neutral to adjusted EPS from 2025 through 2027 — promised Q2 FY2025
too-early FY2025 adjusted EPS grew to $8.20 with Monogram closed late in the year; full 2025–2027 neutrality not yet testable.

PRICED-IN (REFINED)

LOW (room left)

Est. revisions falling · Fwd P/E 10.2 · EV/Sales 2.8x

AI claim maps to Knees, Hips, S E T

Analyst sentiment is not migrating up: combined strongBuy+buy fell from 11 (Jan-26) to 8 (Jun-26) while holds stayed ~17, and price targets stepped down (all-time $123 → last year $103 → last quarter $93; no fresh month targets). Forward consensus growth is modest (~4% revenue, ~3–6% EPS through 2027), so AI-driven acceleration is not baked into estimates. At ~10.2x next-FY P/E and ~2.8x EV/Sales, the multiple is not rich for mature medtech—falling revisions on a non-stretched valuation imply AI upside is largely unpriced; any thesis would most plausibly show in Knees, Hips, and S E T (robotics/planning, mix, utilization).

COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS

5Q4 FY20246Q1 FY20258Q2 FY20256Q3 FY20257Q4 FY20258Q1 FY2026

AI enthusiasm across 6 calls — trend ↗ rising

OrthoGrid hip AI matured into Monogram mBos autonomy, with trials, launch dates, and sales build-out.

RECENT AI CATALYSTS & NEWS

2026-04-20 · Here's How Zimmer Biomet Is Placed Ahead of Q1 Earnings
2026-03-31 · Zimmer Biomet Holdings, Inc. (NYSE:ZBH) Given Average Recommendation of “Hold” by Analysts
2026-03-25 · Is Zimmer Biomet Stock the Right Pick for Your Portfolio Now?

BUSINESS IMPACT - QUALITATIVE MATERIALITY

6/10 qualitative impact moderate medium-term · mixed evidence

Where AI matters: robotics, AI navigation & connected implants

OrthoGrid AI hip navigation is deployed (~40% U.S. hip triple-play mix) and tech/robotics are growing, but management bundles AI into mix/segment rates without AI-specific revenue and mBos contributes $0 until early 2027 while ~200-rep build drags near-term EPS.

Caveats: mBos revenue and <4-minute claims unproven until 2027–2028 FDA/commercial rollout; FY2026 robotics rep ramp (~$40M after-tax) pressures EPS before product revenue; Competitive AI robotics/navigation from peers could cap share gains without displacing implant economics

AI DISRUPTION / CANNIBALIZATION RISK tailwind · 2/10

ZBH monetizes regulated implants and capital robotics/navigation, not billable labor hours; AI augments procedure accuracy and workflow rather than commoditizing the physical implant or obviating surgeon-led arthroplasty at scale.

OPTIONS / MARKET STRUCTURE

option liquidity: fair

ATM IV

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TYPICAL BID-ASK

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OPEN INTEREST

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proxy inputs — dollar-ADV $193M · beta 0.473 · px $83.75

source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.

CONFIRMATION — INSIDERS · 13F · LANGUAGE

Mixed — insiders selling, institutions adding, management language 6/10 measured.

INSIDERS selling 3 open-market sell(s) vs 0 buy(s) — net distribution

INSTITUTIONS (13F) adding as of 2026-03-31: 95 new / 125 closed positions; 411 increased / 300 reduced; institutional ownership -3.64pp; -40 net 13F holders

MGMT LANGUAGE 6/10 measured Robotics/AI gets firm launch and hiring timelines; outcomes and venture bets stay potential-led.

commit “We recently completed enrollment in our 102-patient clinical study”

commit “we continue to expect U.S. approval and the launch of the semiautonomous version in early 2027”

commit “targeting to hire over 200 by the end of 2027”

VERBATIM AI QUOTES

“OrthoGrid, or AI-based hem navigation platform”
— Ivan Tornos, Q1 FY2026

“we hosted technical evaluations of boss or fully autonomous AI-driven orthopedic robotic system, which we acquired via the Monogram acquisition.”
— Ivan Tornos, Q1 FY2026

“Surgeon feedback was overwhelmingly positive as the potential gains in safety, efficiency, ease of use, reproducibility and accuracy resonated very strongly with the customers that we engage.”
— Ivan Tornos, Q1 FY2026

“We recently completed enrollment in our 102-patient clinical study, we continue to expect U.S. approval and the launch of the semiautonomous version in early 2027, followed by the fully autonomous version in late 2027 or early 2028.”
— Ivan Tornos, Q1 FY2026

“In anticipation of the mBos launch, we're increasing the number of robotic clinical sales representatives targeting to hire over 200 by the end of 2027.”
— Ivan Tornos, Q1 FY2026

“In this role, Dr. [indiscernible] will lead the strategy, delivery and management of our global portfolio spanning AI-enabled robotics, software and data, smart implants and connected technologies while also overseeing or global medical education.”
— Ivan Tornos, Q1 FY2026

“This is going to give us the opportunity to invest in technology that has the potential to truly change the standard of care from AI data applications to cartilage repair solutions.”
— Ivan Tornos, Q1 FY2026

“OrthoGrid delivered its strongest quarter to date, with significant growth and accelerated adoption, solidifying OrthoGrid as a core driver of our digital ecosystem and interior hip triple play.”
— Ivan Tornos, Q1 FY2026

“with enrollment complete in the Monogram clinical study, we remain on track to bring this very exciting first-to-the-world technology to market.”
— Ivan Tornos, Q1 FY2026

“we can do cases under 4 minutes procedure times.”
— Ivan Tornos, Q1 FY2026

“We are hiring north of 200 sales reps behind the launch of Monogram in addition to the many reps that already got in the field.”
— Ivan Tornos, Q1 FY2026

“We strongly believe that the combination of Monogram plus ROSA plus TMINI, it's going to give us a competitive advantage.”
— Ivan Tornos, Q1 FY2026

“Companies that have connected data before, during and after the procedure. Companies that can being objective data around outcomes, promo whatnot, and they can validate that can reduce the cost of care I believe they're going to be meaningfully rewarded.”
— Ivan Tornos, Q1 FY2026

“collecting data before doing after surgery with ROSA Shoulder and being able to engage in proms, conversations, outcomes and whatnot.”
— Ivan Tornos, Q1 FY2026

“30% growth in technology in the first quarter, all in with the rest of surgery, bond cement is 12%, but the actual technology growth in the first quarter, and that's TMINI is 30%.”
— Ivan Tornos, Q1 FY2026

“the mBos semi and fully autonomous AI-driven orthopedic robotic system that we acquired via the Monogram acquisition.”
— Ivan Tornos, Q4 FY2025

“we'll be ready to transform the musculoskeletal space with the launch of mBos and other disruptive technology platforms while responsibly accelerating our diversification strategy”
— Ivan Tornos, Q4 FY2025

“we're adding something like 200-plus sales reps in robotics, countless reps in S.E.T., ASC, et cetera, et cetera.”
— Ivan Tornos, Q4 FY2025

“the main event is going to be mBos, the fully autonomous and semi-autonomous robot that -- robotic platform that we acquired from Monogram.”
— Ivan Tornos, Q4 FY2025

“It's definitely the step of moving from guided robotics to smart robotics.”
— Ivan Tornos, Q4 FY2025

“You can literally do the cases, and I hope you come to the booth, in a hands-free approach.”
— Ivan Tornos, Q4 FY2025

“We're very excited about the opportunity that Monogram will bring to an ASC environment where speed, efficiency and accuracy matters most.”
— Ivan Tornos, Q4 FY2025

ANALYST QUESTIONS ON AI

Q (Q1 FY2026, Larry Biegelsen (Wells Fargo)): I'd love to hear about the rollout of Monogram... once you launch the semiautonomous system with Persona early next year, how should we think about the pace of the rollout? Will there be a limited launch initially at select centers and how that might impact ROSA.
A: Completed the clinical trial; focused on 510(k). Launch in early 2027. Expect cases under 4 minutes, enhanced safety boundaries, democratized/reproducible/short learning curve, high accuracy. Bold launch with north of 200 dedicated sales reps plus existing field reps; heavy clinical evidence; new Chief Science/Technology/Medical Affairs leader (Dr. Jonathan [indiscernible]). ROSA + TMINI remain in a multi-robot suite—ROSA #1 OUS where CT is not preferred; Monogram + ROSA + TMINI = competitive advantage.

Q (Q1 FY2026, Richard Newitter (Truist Securities)): Canary smart implant in Persona IQ—clinical updates at AAOS, CMS/CCJR implications—where are you, why not more airtime, can this be a meaningful differentiator in '26–'27?
A: Deliberately data-first before more promotion; tracking to expectations; published robust cost/outcome data; IPPS/CJR expansion favors implants that objectively track performance; investing to be the company that can validate connected before/during/after data and cost-of-care reduction; committed to the technology.

Q (Q1 FY2026, Caitlin Cronin (Canaccord Genuity)): ROSA shoulder—updated color on launch and when it moves to broader launch?
A: Full market release; strong surgeon-center feedback; usable for anatomic and reverse; solid accuracy data (glenoid and humeral resection); efficient; v2 in development; integrated with ROSA ecosystem and perioperative data/PROMs collection; scaling U.S. and OUS unit deployments.

Q (Q4 FY2025, Joanne Wuensch (Citibank)): AAOS—expecting mBos showcase; how do you anticipate folding that into your robotics portfolio and platform?
A: AAOS main event is mBos (semi- and fully autonomous Monogram platform); step from guided to smart robotics; hands-free workflow; best-in-class registration speed in trials; optionality to integrate platforms later but today favor breadth (large/small footprint, CT vs imageless, surgeon control vs semi/full autonomy); Q4 results validate multi-platform strategy.

Q (Q4 FY2025, Larry Biegelsen (Wells Fargo)): (Implicit in broader M&A/capital allocation thread; no separate Monogram Q on this call—Monogram addressed in prepared remarks and Joanne's AAOS question.)
A: N/A—Monogram/mBos covered in Ivan prepared remarks and Joanne Wuensch Q&A on this call.