ZIMMER BIOMET HOLDINGS, INC.

Results for the Three and Six-Month Periods ended June 30, 2025

In the three and six-month periods ended June 30, 2025, our net sales increased 7.0 percent and 4.0 percent when compared to the same prior year period. Net sales growth was driven by a combination of our Paragon 28 acquisition, market growth, new product introductions and commercial execution across the organization. Paragon 28 had a positive impact on our net sales of 2.6 percent and 1.4 percent in the three and six-month periods ended June 30, 2025, respectively. Additionally, our net sales experienced a positive effect of 1.6 percent and 0.1 percent from changes in foreign currency exchange rates in the three and six-month periods ended June 30, 2025, respectively.

Our net earnings were $152.8 million and $334.9 million in the three and six-month periods ended June 30, 2025, compared to $242.8 million and $415.2 million in the same prior year periods. The decreases in earnings were primarily due to costs related to the Paragon 28 acquisition, including acquisition-related costs and higher interest expense incurred for debt borrowed for the acquisition; higher cost of products sold due to sales volumes increases and higher manufacturing costs due to inflation; and investments made to direct-to-patient marketing and information technology. These increased costs were partially offset by lower restructuring costs due to the timing of our restructuring programs.

2025 Outlook

We expect 2025 full year-over-year revenue growth of 6.7 percent to 7.7 percent in 2025, driven by a combination of Paragon 28 net sales, market growth, new product introductions and commercial execution. We estimate the Paragon 28 acquisition will contribute 2.7 percent to the year-over-year net sales growth. Based on recent foreign currency exchange rates, we expect foreign currency to positively affect year-over-year net sales by 0.5 percent. We estimate net earnings will decrease in 2025 when compared to 2024 due to higher acquisition and integration costs, operating expenses and intangible asset amortization related to the Paragon 28 acquisition, higher manufacturing costs caused by inflation, tariffs, higher net interest expense due to higher interest rates and increased borrowings and a higher estimated effective tax rate due to favorable 2024 adjustments that are not expected to recur. These unfavorable items are expected to be partially offset by higher net sales, leverage from fixed operating expenses, ongoing savings from our restructuring plans and lower employee termination and other charges from our restructuring plans.

The ultimate impact that tariffs will have on our net earnings is difficult to predict due to their fluid nature. We account for tariffs as part of the cost of our inventory or instruments and recognize the expense in cost of products sold when the related inventory is sold to a customer, or depreciate the additional cost of the instrument in selling, general and administrative expense. Based upon current tariff rates and our efforts to mitigate our exposure, we anticipate recognizing approximately $40 million of additional expenses related to tariffs in the full year 2025. Since we capitalize tariffs as part of the cost of our inventory and instruments, the impact in 2025 will be more significant in the second half of the year.