ZBH · 8-K · 20260805PR335108
Operating Expense Trends
ZIMMER BIOMET HOLDINGS, INC. · 2026-08-05 · Importance 31 · Surprise 32 · No source text
R&D expense increased in dollars in 2025 but declined to 5.6% of net sales from 5.7% in 2024, reflecting Paragon 28-related spending and technology projects partly offset by lower European Union Medical Device Regulation spending. SG&A increased to 39.6% of net sales from 38.2%, driven by variable selling and distribution costs, Paragon 28 expenses, performance compensation, instrument charges, direct-to-patient marketing, medical education and information technology. Lower litigation-related expenses partially offset the SG&A increase. Restructuring and other cost-reduction expense declined to 2.2% of sales from 2.9%.
Key facts
- Benefits expected to be paid 2031-2035: U.S. and Puerto Rico $133.7 million; Foreign $193.6 million. source
- SG&A increased in amount and as a percentage of net sales in 2025 primarily due to selling and distribution costs that are variable, Paragon 28-related expenses, higher performance-related compensation, instrument-related charges, and investments in direct-to-patient marketing, medical education and IT. source
- Benefits expected to be paid in 2026: U.S. and Puerto Rico $26.5 million; Foreign $43.5 million. source
- Contributions to foreign defined benefit plans are estimated to be $16.0 million in 2026. source
- Selling, general and administrative expense was 39.6 percent of net sales in 2025 compared to 38.2 percent in 2024. source
- Total other current liabilities as of December 31, 2025: $1,693.6 million (License and service agreements $139.0, Salaries, wages and benefits $477.1, Customer rebates $243.0, Accrued liabilities $834.5). source
- Benefits expected to be paid in 2027: U.S. and Puerto Rico $27.0 million; Foreign $40.5 million. source
- Benefits expected to be paid in 2028: U.S. and Puerto Rico $27.1 million; Foreign $40.6 million. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | positive | realized | +1.4% | Selling, general and administrative expense was 39.6 percent of net sales in 2025 compared to 38.2 percent in 2024. |
| operating_income | negative | realized | -1.1% | Depreciation expense was $427.9 million in 2025, $404.4 million in 2024 and $390.2 million in 2023. |
| operating_income | negative | probable | -0.4% | Contributions to foreign defined benefit plans are estimated to be $16.0 million in 2026. |
| liability | negative | probable | — | Benefits expected to be paid 2031-2035: U.S. and Puerto Rico $133.7 million; Foreign $193.6 million. |
| operating_income | negative | realized | — | SG&A increased in amount and as a percentage of net sales in 2025 primarily due to selling and distribution costs that are variable,… |
| cash | negative | committed | — | Benefits expected to be paid in 2026: U.S. and Puerto Rico $26.5 million; Foreign $43.5 million. |
| liability | negative | realized | — | Total other current liabilities as of December 31, 2025: $1,693.6 million (License and service agreements $139.0, Salaries, wages and… |
| cash | negative | committed | — | Benefits expected to be paid in 2027: U.S. and Puerto Rico $27.0 million; Foreign $40.5 million. |
| cash | negative | committed | — | Benefits expected to be paid in 2030: U.S. and Puerto Rico $27.0 million; Foreign $39.3 million. |
| cash | positive | probable | — | Company expects minimal legally required funding requirements in 2026 for qualified U.S. and Puerto Rico defined benefit retirement plans… |
| operating_income | negative | realized | — | R&D expenses increased in amount in 2025 due to Paragon 28-related R&D and higher spending on certain technology-based projects but… |
| assets | positive | realized | — | Foreign pension plan assets measured at fair value in Level 3 beginning balance as of December 31, 2025: $183.0 million; change in fair… |