Okay, thanks so much, everyone. Appreciate you joining for the first day of the Mawlitthami Healthcare Conference. For important disclosures, go to mawlitthami.com/researchdisclosures. Thrilling. What is thrilling? Very, very happy to have Ivan and Suky here as the CEO and CFO of Zimmer Biomet, respectively. For us, should be a fun conversation. Thanks so much for coming, guys.
Absolutely. Thanks for having us.
I'm going to start with the most open of the most, you know, one question ever. I apologize. You know, H2, you've got a planned acceleration implied in the 2025 guide. Could you help walk us through how that acceleration is looking?
Sure, absolutely. To my hedge fund friends, we're going to stick to the public commentary that we made back on August 7th. I love how the lights are on. Everybody's looking at my body language. Is he going to smile? Is he concerned? I'll stick to the public commentary that we made. Starting with the level of company, it's very high. We noted in the call back on August 7th that we'll be very surprised if in Q3 we don't scratch 6%. Here's the part where I won't make any facial expressions. If the 20 basis above, below, are you still confident? We said we'll be very surprised if we don't scratch 6%. We'll be very surprised if in Q3 we don't scratch 6%, with Q4 obviously being somewhat softer, given the Q4 comparable of Q4 of 2025 to Q4 of 2024.
That's the quarter commentary for my friends in the hedge fund world. In terms of the overall dynamics, why are we confident about the second half? External and internal reasons. Externally, we continue to see a healthy environment. We noted July was strong, June was not. I'm not going to make any additional comments on where we are in August and September, but the markets are healthy. We take the market globally somewhere north of 4%. Externally, life is good. Pricing continues to be a nice tailwind for all of us, and all of us is everybody in orthopedics. We delivered 20 basis points of price favorability in Q2. We believe that in the year 2025, price should be flat, if not slightly better than that. Those are the macro reasons. Internally, we love what we've seen with new products. We continue to see an acceleration.
As you recall, in Q2 of 2025, in the U.S., we saw sequential improvement in hips and knees of about 150 basis points in each category. That's a great indicator of what new products are doing. We continue to see an increase in penetration in robotics, Persona Cement, and whatnot. Beyond that, the last two data points that I'll offer in the second half of 2025, we don't have the day rate impact that we had in the first half. That's about 100 basis points. We also have a nice comparable in the second half of 2025 versus the second half of 2024, given the fact that we don't have that ERP debacle that we had in 2024. External and internal reasons give us high confidence that we're going to deliver on the guidance that we set forth on August 7th of 3.5% to 4.5% for the year 2025.
The Q3, the scratching 6%, that's.
Here we go.
That's a bunch of the easy comms. Can you break it down for the crowd so they can kind of understand the different moving parts for you guys and the base product offering as well, because it's going pretty well?
The acceleration from a new product standpoint is what we call the Magnificent Seven. I don't know if I need to go through all of those products. Surely, you probably have heard about that, but I'll just highlight a couple of them. Oxford Partial Cement continues to go very well. We at Zimmer Biomet are the only company in the U.S. with a partial cement that is a lower surgical time with higher levels of accuracy placement and survival rates that are in the mid 90%. Survival rates is how long does the implant stay in place, you know, call it 10 years later, with 300,000 patients globally in the registry. Oxford Partial Cement is going really, really well. Z1 Triple Tapered Stem continues to gain market share. We lost between 500 to 700 basis points of market share in the U.S. for the last five, seven years.
We are meaningfully regaining part of the market, part of the market share. Again, acceleration in Q1 of 2025 versus Q4, Q2 versus Q1, and Z1 Orthogrid continue to do really well in the quarter so far. That's another meaningful growth driver. We love what we're seeing with Persona Revision in Europe. We are the leading revision company in the world. We launched Persona Revision here in the U.S. four or five years ago. We have a 51% market share. We launched a product in Europe, Q1 of 2025. Started to really get at it Q2, Q3, and we love where that's going. New products are moving in the right direction. Execution is moving in the right direction. External dynamics are solid. Beyond day rate, comparables, and whatnot, we're very confident on the guidance that we put forth.
How do you think, you know, talking about a lot of that Magnificent Seven and how that's working? How do you think that flows through H2 2026, not often for a 2026 guide? It's more like, should we expect more of a contribution from that Magnificent Seven set than what we're seeing in the back half of this year?
It will definitely accelerate. As a proxy, we've seen the real impact of a new product launch is between 18 to 24 months. I'm not going to go through every single product launch, Magnificent Seven plus, a bunch of products in set. If you look at the press releases that we've done around 510K approval, saying two, three months later, we launch the product, and then 18 to 24 months later is when you start to see the meaningful contribution. Why is that? You have the sets, you have the inventory in the market, you have all the medical education strategy in place, you train where you need to train, you got your internal sales force trained, you got the products and formularies, and that takes a while. You have to compete head-to-head with other products.
To your question, simple answer, in 2026, we'll see an acceleration of all the new product introductions in 2025 plus. In 2026, we're launching a lot of new products as well. We're going to be first to market with iodine-coated devices. We're launching ROSA D15, that's the internal R&D name, version 1.5. We call it ROSA Optimize externally. That is going to be ROSA with the ability to do kinematic knees, with a much faster registration process, with the ability to deliver a level of accuracy that we don't see today with current ROSA. The feedback so far has been outstanding. We've done some surgeries, and the 510K approvals will be imminent. We're going to be launching at the end of 2025. That's another meaningful contributor to 2026, in addition to ROSA Solder, and I'll stop right there. Otherwise, I'll stay here six minutes giving an answer.
Yeah, I mean, to flip to one sort of really financial one again, Suky, the EPS guide increase, can you walk through some of the components of that so people can understand what the strengths are?
Sure, happy to do it. It's interesting, on our second quarter call, we actually moved our earnings per share guidance up, and it's almost back to the original point we had at the beginning of the year, even after consideration for Paragon 28, as well as tariffs. Two major events, and we're pretty much getting back to the same place. What gives us confidence to increase our overall earnings per share? It's a few things. One, our tariff estimate has come down. It's more favorable now, where we originally said $60 million to $80 million, and we said it's now going to be about $40 million. As we continue to see stability in the overall tariff environment, we get greater and greater confidence around that. I feel good about that number. Secondly, our interest expense is moving down from our original estimate. It's a good thing.
Our cash flow generation has been stronger than we anticipated. That's lowering our debt load. Secondly, the mix of our U.S. ex-U.S. debt has been a little bit more favorable towards ex-U.S., where the interest rates are lower. That's structurally our Treasury and Tax teams doing a great job in managing that number lower. We originally said that after the Paragon 28 transaction, as well as tariffs, that operating margins would be down about 100 to 150 basis points year over year. We're moving that to the more favorable end of down 100 basis points. There's some operational improvements in the business we're also seeing. The last much smaller amount is there's more of an FX tailwind than what we originally anticipated. The thing is, you got four things in there, tariffs being very real, the interest expense being very real, and the operational improvements. We feel good about where we are.
Really helpful. I'd love to hear on some end markets, maybe starting with, I don't know, knee. You know, knee has accelerated both for you guys and for the market as a whole. It's been a really healthy market, I think, that most people would feel. I think we can probably get rid of the backlog argument that you remembered briefed on. This did last year, but that's probably gone. To your, like, is this consumers, is this like pickleball and consumers fundamentally being active and they're older? Like, what do you think has driven the market so well?
We love for pickleball players. We keep them active, but I think it's more than pickleball. I think it's demographics. I know that we've been talking about demographics for a while, but it's real. You know, 10,000 to 12,000 patients or people actually turn 65 years of age here in the U.S. every day. COVID did change a lot of things, one of them being the lifestyle. We want to be active. Again, pickleball is an example of that. We don't want to have the life we used to have. GLP-1s, you know, a year, two years ago, we all thought that GLP-1s were the end of the world. GLP-1s is a massive tailwind for us. We got data through the academy that shows that roughly 25% to 30% of all the surgeries, of all the patients that go through surgeries, are in some sort of GLP-1, which makes sense.
You know, you're lowering your weight. Now you can qualify for surgery. You lose weight, you want to be active again. You may have some mobility challenges. That's been a tailwind. The biggest tailwind by far, at least in the U.S., is the ASC dynamic. Prior to COVID, you know, 1% to 2% of the sales of Zimmer Biomet in the U.S. were at an ASC. Today, that number is already north of 20%. If I can do my knee on a Saturday morning and leave at night, an Oxford Partial Cement, I'm going to do it. If I can do my rehab, through digital means, and we do that through Apple, I'm going to do it. That's been a huge tailwind, the ASC dynamic. By the way, we delivered early units. That's only going to continue to accelerate. The backlog is gone. The markets are healthy.
I don't think the markets are the 6% to 7% growth rates that we saw through 2022, 2023 given backlog. I think globally, 4% is solid. Here in the U.S., the number of things are going to continue to pick up.
I am. I sat next to the Head of Hip and Knee Surgery, Mount Sinai, on the train back home randomly once, and he was ranting about how much he loved working in the Ambulatory Surgery Center he had in New Canaan. It's a similar thing. On that topic, it's a fundamentally different channel to service with different challenges, whether it's sterilization or whatever. How do you guys approach that channel differently to how you approach it inpatient?
Yeah, we typically talk about what we call the three P's of the ASC strategy. First of all, you do need to have dedicated people, and that's something that we missed 10, 5 years ago. We had the same folks calling on hospitals, HOPDs, hospital outpatient departments, and going to ASCs. Today we got dedicated people with a dedicated President going over to an ASC, so a dedicated sales channel. The second P is around partnerships. We need to have the right partners. To your point, sterilization is a must. We have an exclusive partnership with Getinge, the Swedish company that I cannot pronounce, but I think it's close to Getinge. We also have a partnership with Aspheris in some locations, a very meaningful partnership. We also partner with a lot of different companies in an exclusive way.
We are the only company that can do real estate through CBRE, you know, A to C, soup to nuts. There's a lot that we're doing in the partnership side of the equation. The last piece is around processes. You know, how we think about contracting, how do we think about segmentation, how do we think about the commercial execution in the ASC space has dramatically evolved. Truth be told, Zimmer Biomet was late to the ASC strategy, part of the reason why we struggled in the U.S. for some years. As of the last two, if not four quarters, we've seen a very meaningful uptake in the ASC space.
Yet an immense wasp in Swedish for what it's worth.
That's it. All right.
How does that work from a sales force perspective? A nerdy question, like getting the sets in the right place, it's not easy to shift the channel, you know what I mean? How do you manage that?
You do need to have dedicated sets and instruments in an ASC. The rotation is higher. That doesn't mean we're building more inventory, but we're being more efficient around allocating inventory from, again, hospital inpatient places and whatnot. You do need to have a dedicated sales rep, but the productivity is much higher in an ASC. Your typical sales rep in the U.S. will do two cases in a hospital, it's two and a half to three, maybe. In an ASC, it's not uncommon to do six, seven cases. Pricing dynamics, we're worried about pricing being lower in an ASC versus hospitals. It's actually quite comparable. If you look at it from a, let's call it a P&L standpoint, your productivity is higher in an ASC. Your gross margins are comparable. Your cost to serve is lower, from an OpEx standpoint.
We love the ASC, and we are becoming really aggressive in terms of how we're thinking about investments in an ASC space.
Is it okay for the reps that are just getting in and out, scrubbing up in places way faster, right?
You got it. The more aggressive reps are actually doing, you know, two days of surgery, these Mondays and Tuesdays, in hospital, HOPDs, and then Wednesdays, Thursdays, and Fridays, they're all about the ASC. The productivity is much better in this dynamic.
You mentioned pricing, and obviously, during the inflation we created, everyone took a little bit of the pricing. Makes complete sense. Do you think we're going back in nominal terms to where we were, I don't know, five years ago, or is it?
I don't, and I'll let Suky elaborate on our pricing strategy. This is the only company that I know where the pricing group reports directly to the CFO. I'll tell you that discipline is in place. The true comments I make on pricing, why we're not going backwards, we're launching a lot of innovation into this space. When I say we, it's not just Zimmer Biomet. It's Matt Pierce, other Strykers, Smith & Nephew, and Johnson & Johnson. There's real disruption when it comes to orthopedics, disruption that is taking cost out of the system. The one data point you got to remember is that the biggest expense in an orthopedic procedure, it's not we, the bad guys, Strykers, Smith & Nephew, Johnson & Johnson. We account for around 15% of the cost. The other 85% is labor, which, you know, is higher and higher, especially in the U.S.
with nurses and whatnot. It's inefficiencies in a hospital, even in an ASC. You can reduce the time in surgery. You can reduce the time in hospitals. Your length of stay now is dramatically different. You can lower readmissions. All this innovation that we are bringing to the space is meaningfully reducing that 85%. That's one compelling data point of why the pricing discussion is not what it may be in other areas. The second data point, and then I'll pass it on to Suky, that I'll offer is that orthopedic procedures are the second highest margin contributor, in the U.S. for sure. I don't know where we are outside the U.S. As you see hospitals in the U.S. with an average EBITDA of around 1.5% to 2%, if there is one procedure you don't want to lose, it's orthopedics.
High contribution margin, lower length of stay, overall great dynamics, orthopedic cases pull other cases. I don't see us moving back to 2019 when it comes to pricing.
I think on top of that, the portfolio that we've been launching and will launch, continue to launch, has been giving us greater portfolio contracting power. Also, the newer products tend to be stickier on price and price erosion than older generation of products. I think those two things complement. Regardless of where the pricing environment goes, just our internal mechanisms around defining account-level strategy, data and insights around that account versus, you know, like accounts and where they're priced, and just the governance and the model that we use around making sure that we've got discipline around not just top-line growth, but also margin. The account level is better than it's ever been.
Out of sheer curiosity, who's delivering the message of the CPI to the customer? Is it the rep, or are you building decks and going in, and how's that work?
Generally, it's at the ground floor level. They're given a corridor, if you will, in which they can price a particular account. If they moved outside of that corridor, you start to escalate from a governance perspective for approvals.
I'd love to touch on Feds, because it's just, it's been a great end market for you guys. There's obviously a lot of different things bundled into that. I don't know whether you want to tackle it by like shoulder or trauma or whatever suits, but how are you feeling about the market overall and your place in it?
Screen market, and truth be told, I think our set business is one that most people don't realize how exciting it is. It's around $2.6 billion set as a category. By the way, set is a lot of things, but primarily sports medicine, upper extremities, now foot and ankle with Paragon 28, then CMFT, cranial, maxillofacial, thoracic, is the bulk of it. Again, $2.6 billion with less working capital requirements out of recon business, with a great opportunity for gross margin expansion, growing with Paragon 28 double digit. It is a business that for us has delivered at least mid-single digit, mostly upper single digit for the last nine out of 11 quarters. Seven quarters in a row, we delivered mid-single digit growth or above. To the conversation Patrick was having on ASCs, that is your business. I love that business.
Actually, I'll tell you, without making any commitments, I'll be really surprised if we don't double the size of that business over the next five to seven years through organic and inorganic means. Speaking of inorganic, that is the perfect platform to build new businesses. We already acquired Paragon 28. There are all kinds of opportunities adjacency-wise in that space. That's the most exciting, one of the most exciting businesses that we have.
I'd love to bring up Paragon 28. I mean, you guys brought it in, how's it going? How's the integration?
Better than expected. Paragon 28 is a company that has been delivering double-digit growth for a while. It's going to continue to deliver double-digit growth now that it's part of Zimmer Biomet. It'll contribute at least 270 basis points of revenue this year, and again, meaningful growth in 2026. We have fully integrated now the Zimmer Biomet portfolio into that channel. We're not seeing any major disruption when it comes to our sales personnel. As we stated in the earnings call, we kept the entire commercial team, the commercial channel. A lot of companies buy an asset and they talk about keeping things separated, isolated, you know, the culture remains. Then a quarter, two quarters later, everything gets integrated. I'll tell you, we're not doing that. They have their own design centers, their own management team, their own quality management system.
We love what we're getting from Paragon 28, and I think it's a great proxy for future deals.
Does that matter for future? I mean, do you have any reputation for keeping people? Does it make it easier to retain people later?
100%. 100%, especially if you stick to it, right? There are best-in-class examples of companies that have done that. We've struggled in the past. We have built best-in-class integration capabilities. I think the folks at Paragon 28 will tell you they're happy with the fact that we kept them isolated. I do think that's definitely a competitive advantage for future attraction of deals.
Just for those in the audience who might be less familiar with it, the extremities business, for everyone, it's growing dramatically faster than like hip and knee and things like that. Why do you think that is?
Their demographics play a factor. Younger patients, you know, sports people, you know, they're in their 30s, 40s. You also have older people. Demographics, the volume is higher. The growth is much higher given mobility and whatnot. Again, as I mentioned, set is a bunch of things. You get anything from a meniscal repair to some sort of shoulder issue where you have to do something around rotator cuffs and whatnot. You got foot and ankle, it's one of the fastest growing segments. It's going around 6-7% in the U.S., comparable number globally. These are very easy procedures, not so much very easy procedures, they're easier procedures to do. Most of them go to an ASC. Reimbursement is very high. Those are some of the reasons behind why set growths are faster to it than recon.
Does it matter being part of an integrated business with a fully formed set business and then large joint? Does there be synergies between those two, or should we just think of those completely?
There is an element of category contracting, but I think that's overstated. I'll tell you, quality of the products is number one, right? You have companies that, I'm not going to do any publicity for competitors, that have a great portfolio, let's call it in sports medicine, and they've got nothing else going on in recon and they're doing really well. The quality of the products, the innovation that you bring to market, matters. Can you do some category contracting, bundle altogether? There are examples of that, but I'll tell you, Patrick, that's not the number one reason why an ASC or a hospital or a doctor or a group would select one company versus another one.
Speaking of acquisitions, Monogram, love to hear more about, from your perspective, excitement, rationale, everything about that.
I got to be careful how excited I get. My lawyers remind me that we haven't closed the transaction yet, but I'll stick to being me and being excited about it. It's a great opportunity. It's a great opportunity. I give a lot of credit to Stryker 10 years ago, being visionaries and changing the standard of care in core orthopedics, introducing MAKO. I think we at Zimmer Biomet have a comparable, if not bigger, opportunity to do the same. We're going to leap forward into the world of fully autonomous robotics. That brings us to level four, level five automation, where the surgeon can now apply her or his cognitive function to doing something else. The robot has now done fully autonomous surgeries in India. We're going to bring this to market in early 2027, if not late 2027, early 2028 for the autonomous. Same autonomous, early 2027.
All the due diligence we've done, we've been tracking this company for five years. It's been outstanding. I think this is revolutionary. I do think we do believe that this is going to be a groundbreaking introduction in the world of orthopedics. What I like about it is that we're not getting married to that one platform. We believe that optionality and category leadership in navigation is the way to go. If you want full automation, we're going to have it. Only company will have it. If you want to have a portable handheld robot, we're going to have it through our exclusive partnership with Think Surgical. If you still believe that a normal quote-unquote robot, like ROSA, is the way to go, we're going to have it. We're going to invest on it to have CT scan, non-CT scan.
If you think that robotics in all modalities is a waste of time and money, and you do have customers believe that, we also have other modalities of navigation, whether it is Orthogrid through AI, whether it is mixed reality, whether it is lighter, cheaper navigation modalities. By early 2027, Zimmer Biomet will be the one company that offers all kinds of navigation, robotic, non-robotic, to all kinds of customers around the world. I think that's transformational.
How do you think surgeons would respond to automated? You can imagine there might be for them a conflict in their minds.
We have to work on the language because we're not selling a driverless taxi to a taxi driver, and that's as important to know. We believe that this is an autonomous platform that is surgeon-enabled. Again, this optionality, if you as a surgeon want to do less, you can do it. If you're going to get more involved, you can do that as well. I think segmentation communication is something we need to work on for the next year and a half, but the optionality is there. We'll work on it, and I think we'll get it right. This technology Monogram also has the capability of doing remote surgeries. Do I envision a world where those surgeries are done remotely without anybody in the room? I don't want to be in the surgery myself. I'm old-fashioned, but you know, who knows what the future is going to look like?
I love the potential and the optionality, and then we need to decide how we deploy it.
Makes sense. You guys made some changes to the commercial organization. Can you give us an update on how that's going and how things are?
Yeah, I'll start by saying that we've been doing this for a while. I guess in the Q1 earnings call, a lot of people got concerned about all this timing. Right now, at this moment, we are restructuring our U.S. sales channel. All this time to do things differently. It's an evolution of what we've been doing for the last six, seven years, especially here in the U.S. We believe specialization is the way to go, and we're going heavier in specialization. Why now? Because we have the full portfolio. We didn't have a full portfolio in sports, CMFT, foot and ankle, biologics before, shoulder. We have it now. Number one, specialization. We're going to have dedicated people that wake up in the morning and do reconstructive specialization, data, digital technology solutions, et cetera, et cetera. Number two is this Ambulatory Surgery Center (ASC) conversation we're having.
We are adding people into the ASC world, and some of them come from the recon world. Number three is incentives. We have paid the wrong way in the past. We paid people without growing. Now at Zimmer Biomet, if you don't grow, you don't get paid. Sounds like something simple, but that's a change that we started to do for a variety of reasons. We slowed down on it. Today, our incentive plan is totally different. I don't want to ramble through a long answer. This is evolution or something that we started. It's going well. Our engagement rates remain very high, our turnover rates remain very low, and we're going to go faster at it.
People sometimes roll their eyes at these kind of questions, but you've both been tense, guys. How has the culture of Zimmer Biomet now versus, you know, are you where you want to be?
I am exactly where I want to be. Speaking of tinies, pressure is a privilege. I think the pressure is on us to deliver, and we are making sure that we're sharing that pressure with the 2,500 sales reps that we have in the U.S. For a variety of reasons, the accountability, the focus was not there. Today it's there. I love the culture that we have. I love where Suky and I are, and certainly, we're excited about the future here.
There's a lot of focus that goes on US and knee, and you guys actually saw a bit of an acceleration there on that side of things. Could you walk through what you're seeing in the market competitively and what drove that?
You have seen the numbers. We increased Q2 over Q1 by 150 basis points in knees. We said it before, I'll say it again, you should see a very meaningful acceleration in the second half of 2025, and you'll see it. We had portfolio gaps. We were late to market with robotics. We were late to market with partial knees. We were late to Oxford Partial Cement. We were late to market in the Ambulatory Surgery Center, in the startup care. I can go on and on. There are no excuses. We have a full portfolio, and that acceleration is going to continue to 2026.
The US always gets a lot of focus, but what do you see in the rest of the world? I'm curious about EMEA and APAC relatively.
The U.S. will get a lot of focus. It's 62% of our revenue, around 50% of our profit. That's why we continue to invest and maybe the changes we're making. Outside of the U.S., from a macro standpoint, the markets I mentioned are healthy. There's been some timing, so that's why the first half of 2025 looks kind of unusual for the international. We mentioned in the earnings call there was around 50 to 60 basis points of revenue coming from international that shifted from Q2 to Q3. That revenue will come in Q3. We continue to be excited about the opportunity. China continues to be a question mark for us, but made of China, I cannot think of any country that today will be a major headache.
Will come, sounds like has come already.
It will happen in Q3.
Okay, that's good to know.
The part where everybody looks up, you know, he's rolling his eyes left, right, trying to get what I can.
There you go. I mean, what about in terms of the base markets? We had heard a little bit in EMEA, like some surgeries not really quite picking up in the same way as the US. How have you felt about the base markets?
Sectionality is not as steady as here in the U.S. for, again, a bunch of different dynamics. Yeah, the market remains strong. I mean, the waiting lists in Europe are still compelling. Again, made of China in Asia-Pacific, all the markets are very strong. We are seeing growth in Japan, you can call it upper single digit. Australia, New Zealand continues to go really well. Again, the core countries in Europe are pretty much the same as they were in 2024 and 2023. No major changes there.
I think if I could just add on that pricing, an important point that Ivan brought up was the seasonality. We are seeing sort of normal seasonality. Just as a reminder, as you look at the back half of our year, Q3 in absolute dollars is generally a step down. Better growth for all the reasons that Ivan talked about, but a step down in absolute dollars, and then a rebound in Q4. That's our strongest quarter. Operating margins will follow accordingly, Q3 being in line with 2024, and that'll squeeze you into the rest of the year. Cash flow should follow the normal cadence that Ivan talked about as well.
Yeah, the usual system. I love that we love the pricing dynamics outside of the U.S. They're being more in the right direction, which I didn't expect. Now we have three, four years in a row where pricing is a tailwind in the international markets.
What do you think is driving that? I mean, it's that everyone thinks of them as more budget constrained.
Yeah, I do think it's the comparison we had earlier around the 85-15. Actually, in Europe, even with lower prices, the number is higher. I do think it's the efficiencies that we're bringing through new technology, that dynamic of the 85-15, and new product introductions. You know, the European markets are five years late because of MDR. We're bringing new technology there.
How should we think about and how are you feeling about ROSA? I mean, I remember AAOS in 2015 or 2016, all the commercials everywhere and getting it out there. How do you feel about it today?
We are married to ROSA for the long term. Again, that's another point of confusion. We announced a partnership with Think Surgical a year ago. Everybody thought that we were going to make Think Surgical the platform. We didn't. Now we're announcing Monogram Technologies. Make no mistake, we're going to continue to invest in ROSA because we live in category leadership. To that point, I mentioned earlier, we're launching ROSA Optimize, hopefully mid-November at the Knee and Hip Society meeting. We had six different indications of ROSA that are going to hit the markets in the next two years, with at least two to three in the next 18 to 24 months. ROSA is the number one robot outside of the U.S., because people outside the U.S. don't believe in CT scan as a pre-planning tool. They don't like the radiation involved with that.
It's not getting reimbursed in a lot of countries. It adds complexity to the procedure. Long way to say ROSA is here to stay. Lots of new indications coming out. North of 2,000 installations already. Number one robot outside the U.S., number two here in the U.S. We are married to ROSA for the long term.
How do you think about, I mean, knee, large range of motion, low down the muscles in the body, so you can sort of see where the benefits come from there. How do you think about, you know, hip and shoulder and all the different indications over time and how viable robotics are there?
We're really excited about what we've seen so far with the shoulder and the fact that in 2026 will be a meaningful contributor. We're getting the surgery down to a science. We are the only company that can do reverse and anatomic shoulder arthroplasty using ROSA shoulder. The level of accuracy that we're starting to see with ROSA shoulder is very meaningful. Given the dynamic of Ambulatory Surgery Centers, given the demographics that we spoke about, I do think that shoulder robotics can move at a much faster pace, penetration-wise, than partial and primary knees did in 2015 onwards. We have a hip application that we launched in 2026, posterior hip, which is meaningful outside of the U.S. We are working on other indications that I won't disclose right now.
I do envision a world in where one day, most of these procedures will be done through different robotic or navigation applications, that being shoulder, that being hip, already knees, foot and ankle, some modalities of sports, et cetera, et cetera, with the number one company in the world on diagnostic and treatment of epilepsy using ROSA brain, which is probably a product that we don't talk much about, but that's also a differentiator.
I want to finish on the one I always finish on, which is, for both of you, what are you surprised that you don't get asked about more? Or, another way, there's a lot of external focus on certain topics. How does that compare to where internally you're really focused?
Yeah, I love the difference with you as well here, but what surprises me the most is that investors fail to realize this is a different company. I guess quarter by quarter, we need to put that to you. This is a company that in 2019 didn't have a pipeline of innovation, had four FDA warning letters, we were just closing a monitorship with the Department of Justice, we were paying debt down, had zero chances of doing responsible diversification, and we had all kinds of people and culture challenges. As we sit here today on September 8, we have the strongest pipeline in the history of the company. We have zero warning letters from the FDA, no compliance issues. We have some of the highest engagement scores in the history of the company. We have the strongest balance sheet in the history of the company.
We have a level of operational execution that we didn't see before. We need to prove it to you all. This is a totally different Zimmer Biomet than the Zimmer Biomet that Suky and I joined back in 2018, 2019. That surprises me.
That's a great summary. I think that's almost perfect, Tommy. Thank you so much for today.
Thank you, Patrick. Great to be here.
Thanks, guys.