1) Q1 2026 Financial Performance
- Sales grew 2.9% on an organic constant currency basis, reaching $2.087 billion, with adjusted EPS of $2.09, up 15% YoY.
- U.S. business increased 3.2%, while international sales grew 2.5%.
- Notable growth in U.S. knee sales at 2.2%, driven by a 20% increase in partial knee sales, offset by declines in legacy products.
- Adjusted gross margin was 73%, benefiting from tariff-related items, while adjusted operating margin stood at 27.3%.
- Free cash flow was $246 million, with operating cash flows of $359 million.

2) Strategic Initiatives and Leadership Changes
- Zimmer Biomet is focused on three strategic priorities: people and culture, operational excellence, and innovation/diversification.
- Dr. Jonathan [indiscernible] has joined as Chief Science Technology and Medical Affairs Officer, enhancing leadership in technology and innovation.
- Transition to a dedicated U.S. sales force is progressing, with productivity increases noted in transitioned territories.
- The company is on track to complete the sales transformation by the end of 2027.

3) Market Dynamics and Challenges
- The company anticipates up to 100 basis points of price erosion for the year, with a 50 basis points FX tailwind expected.
- U.S. knee sales faced challenges due to the transition in sales strategy and loss of two large accounts.
- International growth was impacted by distributor changes and a few one-time order delays, but mid-single-digit growth is expected in the second half of 2026.

4) Product Development and Future Outlook
- The launch of the Monogram robotic system is anticipated in early 2027, with significant investments in clinical evidence and sales force expansion.
- The company is committed to innovation, including investments in the mobility revolution fund and the Canary smart implant technology.
- Guidance for full-year 2026 remains unchanged, with reported sales growth expected between 2.5% and 4.5% and adjusted EPS revised to $8.40 to $8.55.

5) Conclusion and Missing Information
- The call concluded with a farewell to CFO Suky Upadhyay, who is leaving for a new opportunity.
- While the company provided comprehensive insights into its performance and strategic direction, specific details on the impact of macroeconomic factors and competitive dynamics were less emphasized.

Bottom line: Zimmer Biomet's Q1 2026 results reflect solid growth and strategic progress, with a focus on innovation and operational improvements. Despite some challenges in the U.S. knee market and ongoing transitions, the company maintains a confident outlook for the year, supported by strong product pipelines and leadership changes.