Globus Medical, Inc. Q3 FY2025 earnings call

Keith Pfeil noted overall Q3 performance was strong with sales growth and record free cash flow. Base Globus business saw profitability expansion. U.S. Spine business led growth with 32 weeks of consecutive growth and focus on competitive recruiting. Enablement Technologies had lower revenue but positive pipeline view and new product launches. International Spine business had growth across regions. Trauma business had strong growth with manufacturing challenges behind. Nevro business showed positive progress in integration with sequential sales growth. Strategy focused on partnering with surgeons, operational excellence, and share repurchases.

Base Globus business delivered revenue of $669.8 million, growing 7% as reported and 7.1% day adjusted versus prior year quarter. Recently acquired Nevro business had $99.3 million revenue. Base Globus business had adjusted EBITDA margins of 35.3%, growing 435 basis points over prior year quarter. Nevro business had adjusted EBITDA margin of 16.2%. U.S. Spine business grew 9.6% as reported. Enabling Technologies revenue was $28 million, declining 27% year over year. International Spine business grew 5.6% as reported and 6% day-adjusted. Trauma business grew 17.2% with highest quarterly revenue since inception. Nevro revenue totaled $99.3 million, growing 4.9% sequentially.

Adjusted 2025 net sales guide to $2.86 billion to $2.9 billion from previous $2.8 billion to $2.9 billion. Adjusted 2025 fully diluted non-GAAP earnings per share guide to between $3.75 and $3.85 from previous $3 to $3.30.

Hospitals may have changed ways to acquire capital affecting revenue recognition, uncertainty in Nevro integration, competition could impact business

Q: Richard Newitter asked about strength and acceleration in U.S. Core Spine and Enablement Tech.

A: Keith Pfeil said U.S. Spine had broad growth across portfolio and competitive recruiting impact. On Enablement Tech, model changing away from upfront purchases.

Q: Vikramjeet Chopra asked about Nevro margin progression and Q4 Enablement Tech.

A: Keith Pfeil talked about Nevro margin improvement through integration and cost reduction. On Q4 Enablement Tech, pipeline strong but no specific Q4 numbers called out.

Q: Matthew Miksic asked about Nevro product portfolio expansion and robot lease mix.

A: Keith Pfeil mentioned potential areas for Nevro product expansion and lease mix increasing but not over 50%.

Q: Matthew Taylor asked about Nevro margin progress and gross margin outlook.

A: Kyle Kline said R&D and SG&A cost reductions in Nevro with goal to get gross margin to mid-70s.

Q: Shagun Singh Chadha asked about 2026 outlook.

A: Keith Pfeil said positive on spine, international, trauma businesses with focus on integration.

Q: Caitlin Roberts asked about Enablement Tech hospital reasons and Nevro top line risk.

A: Keith Pfeil said hospital review of offerings and operational leases impact Enablement Tech. On Nevro top line risk, early innings of integration.

Q: Samantha Munoz asked about profitability sustainability.

A: Kyle Kline said profitability driven by U.S. Spine growth and synergy execution. Keith Pfeil added focus on free cash flow generation.

Q: David Saxon asked about trauma portfolio breadth and Simplify.

A: Keith Pfeil said trauma portfolio at critical mass and had 2-level approval but no further details on Simplify.

Q: Thomas Stephan asked about Nevro top line growth durability.

A: Keith Pfeil said early to comment on full year-over-year growth on pro forma basis