Ivan Tornos
Chief Executive Officer; Director; President at Zimmer Biomet
Thank you, Keri. And thank you, everyone, for joining the call here this morning. I'd like to start today the way that I typically do, by taking a moment to recognize and to show my gratitude to the 18,000 Zimmer Biomet team members across the globe, who each and every day work redundantly in driving our mission forward. Simply [indecipherable] I'm very proud of each and every one of you. Thank you for your dedication, for your commitment, resilience and for your strong performance to start off this year, 2024.
It is truly this great workforce and the culture that we have here in place at Zimmer Biomet that gives us confidence behind the financial commitments that we're making. Given the fact that we have a very robust investor day coming up in just a few weeks, I will keep my opening remarks short with the goal of moving quickly into today's Q and A session. I'll touch on three key areas briefly. First, I'm going to provide some general comments on the results in the quarter versus [indecipherable] expectations.
Secondly, I'll cover the drivers of the performance and we'll touch on why we believe that these drivers are sustainable. And then lastly. I'll close with a brief summary on our progress against our three strategic priorities, which have been discussed since day one. Those being people and culture, operational excellence and diversification, innovation. Starting with the quarterly results, overall, we are very encouraged with our Q1 performance, which was ahead of our own expectations driven by healthier markets, combined with a strong execution across the organization globally. We ended the quarter continuing the momentum that we saw in 2023 delivering 4.4% constant currency revenue growth while overstepping as sizable day rate headwind, facing rather difficult comps versus a year ago.
In fact, it is reassuring to see that on a day rate adjusted basis, our growth for the quarter was greater than 6% with several areas of the business and geographies contributing to set solid results. In addition to the sound revenue performance, we drove adjusted margin expansion and grew adjusted earnings even while an effective tax rate increased over 200 basis points. This results to start 2024 give us great confidence that Zimmer Biomet will deliver 5% to 6% constant currency revenue growth in the year while driving sizable adjusted operating margin expansion.
So please do reaffirm our guidance for the year. This in turn, will enable mid-to-high single digit adjusted earnings growth while realizing our commitment of seeing free cash flow growing faster than earnings. Suki is going to provide more color on these areas later, but strong performance in the quarter and again reaffirming guidance for the year. [Indecipherable] is encouraging to see us exiting Q1 of 2024 with a revenue growth run rate in the mid single digit range, which is consistent with where we exited the second half of 2023.
With new product introduction ramping later in the year, we lagged what we see in terms of sustainability in our growth trajectory, which we have set all along will accelerate in the second half of 2024. Key drivers behind our Q1 results came from both a macro and micro standpoint, starting with micro factors or end markets, as we've been saying all along, remain very healthy driven by high levels of pace in demand due to a demographic shift. The continued shift today I see here in the US is also a [indecipherable] and across the board in the industry, we've seen better surgical outcomes and technological advancements, which are driving more pace in demand.
On top of that, you got to improve price dynamics and to that end, pleased to report that pricing in the quarter was about flat as opposed to the 200 to 300 basis points of price erosion that this space, this industry has seen historically. From a micro standpoint, the main enablers of our Q1 results where the adoption of Rosa Technology globally with a correlated pull-through of Persona OsseoTi. We also saw sound execution of growth drivers with insert particularly in shoulders within a sports medicine and in our CMFT cranium maxillofacial thoracic business in conjunction with rapid adoption of Persona OsseoTi that is our cement-less platform, which is quickly gaining share in the markets where we have launched the product.
As we enter the second half of 2024, this new product introductions, as well as other new product entries will become more meaningful from our revenue growth standpoint with Persona OsseoTi entering then full launch status seen higher realization of HAMMR or surgical impactor, which we recently launched. And also gained traction with ROSA Shoulder, which we started doing cases recently here in the US. On top of that, we're going to be entering the market with our triple taper hip system, that's Z1, which is going to allow us to better compete in the direct anterior hip category. So, really excited about the completed portfolio in hips and the upcoming launch we approve now for Z1 hip system.
In addition to driving successful 2024 annual results, we are committed to the three strategic priorities that outlined in my first earnings call as the CEO in November 2023. This no doubt will enable long-term success for the organization. I continue to repeat these three priorities over and over at every Zimmer Biomet meeting around the world, and I can tell you that they are resonating with the audience as the absolute must dos for the long term success of the organization.
Once again, these three imperatives are people and culture number one, operational excellence number two and innovation and diversification number three. I would like now to quickly provide you with an update in terms of key progress across these three areas. Further detail will come during our May 29 Investor Day in New York City.
First, in the area of people and culture, we continue to operate Zimmer Biomet with best-in-class engagement metrics and low employee attrition. We have been recognized across different areas when it comes to people and culture, and recently we've been showcasing various publications, including Newsweek, Great Places to work, and Forbes. In the area of people and culture is worth noting also that our restructuring program, which we announced a quarter ago has now been implemented almost entirely with no major disruptions to report.
We have realized substantial benefits post this initiative, including realizing cost savings earlier than initially expected, as well as achieving increased operational agility and enhanced accountability. In the second area of operational excellence, we made robust progress in implementing or enhanced inventory management programs around the world. Working intensely with third party firms, we developed a plan, and we executed against that plan. We remain committed to a meaningful improvement in DOH in the year 2024 and in years to come again more color in that regard during our Investor Day.
In operational excellence, we have also established core initiatives around best-in-class product launches to ensure that this new product introductions gain traction sooner than expected and we launch these products in a better way that we have launched in the past. This is beyond critical for Zimmer Biomet as we continue to deliver a rapid cadence of product launches with plans to release more than 40 new products in the next 24 to 36 months.
One final comment in operational excellence in the area of pricing, we've made structural changes to further enhance the pricing strategy that we put in place over the last several quarters. Moving on to the third and final strategic priority In the area of innovation and diversification we're making solid progress. We continue to see a strong traction in key brands such as Persona OsseoTI I mentioned already gaining share in the markets what we have launched, We've seen progress with ROSA. We continue to gain momentum with Signature 1 planning guides in the shoulder space. And we like what we've seen with our embodying soft tissue franchise. CMFT continues to deliver new product introductions, gaining share in the markets where we partake.
And I'm very excited about the new product introductions that we have seen, and we'll continue to see in our ASC portfolio in the US. We've also made tremendous strides in new products with a more focused pipeline that today has of Q1 2024 has twice the dollar value that we had at the end of 2018. So the dollar value of the pipeline in innovation is twice what it was, 4 or 5 years ago.
Worth reminding everyone that north of 80% of these products in the pipeline reciting markets growing above 4% and many of them are accretive from a gross margin standpoint. So we continue our commitment of innovating from a customer-centric standpoint, but also innovating to see incremental profitability and an increase Vanguard profile. In addition to driving results in core markets, we'd also focus on diversifying our portfolio into more attractive, faster growth end markets with the goal of increasing our vanguard weighted average market growth rate.
We have made significant progress over the past several years, balancing to what it is today, and this fact, in addition to the confidence around future free cash flow generation, give us the optionality and the far power to execute on the right deals at the right time. The most importantly, mere internal hurdles from both financial and strategic perspective. So again, lots going on inorganically, potentially as well as organically, with the size of the pipeline.
While we have flexibility in the size of the deals to come, we continue to favor the smaller tack ins to midsize deals, thus up to $2 billion in acquisition price that become EPS neutral within two years. And that from a HORECA standpoint, return on invested capital, will deliver upper single digit through low double digit within five years.
As I mentioned earlier, we're very encouraged with our Q1 performance, a quarter in what we grew 4.4% in constant currency, north of 6% in day rate while overcoming a number of headwinds and tough comps. It is this quarter results from the first quarter of 2024 that give us strong confidence that in the year 2024 we'll realize our guidance of delivering 5% to 6% in revenue growing 100 to 200 basis points of all market while delivering earnings, growing faster than revenue, and delivering free cash flow above the earnings growth.
This is a commitment that we're making for 2024, and it's a commitment that we're going to reiterate in our Investor Day for years to come. Before closing the call, I'd like to announce that Keri Mattox has made a decision to depart from Zimmer Biomet at the end of May. Keri has been a trusted partner and a very close collaborator and friend on this journey and has enabled great things for Zimmer Biomet in her four plus years here with ZB.
She's going to be missed, we wish her the best in her future endeavors. A search for a head of IR position is in progress with a leading executive search firm, and we hope to announce Keri's replacement here very soon. Zack is going to continue to lead IR interactions for Zimmer Biomet. So a plan for continuity is in place. In conclusion, we're very proud of how far we have come as an organization and are even more excited about where we can go.
Strong confidence on the year 2024, we continue to make commitments and delivering those commitments as evidenced by these results and as evidenced by the new product introductions commitment that we made and we're realizing. I love the fact that we're impacting the lives of millions of patients around the globe and I'm inspired by the fact that my teammates or I are living the Zimmer Biomet mission of elevating pain and improving the quality of life for people around the world. And with that, I'll turn the call over to Suky, Suky?
