NUVA - Earnings call transcript Q1 2022

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Operator

Good day, ladies and gentlemen, and welcome to the NuVasive First Quarter 2022 Earnings Conference Call. I would now like to introduce your host for today’s call, Ms. Juliet Cunningham, Vice President of Investor Relations at NuVasive. Please go ahead, Ms. Cunningham.

Juliet Cunningham

you. Thank everyone. afternoon, Good

as are Financial Chief an Officer. quarter Matt and NuVasive’s today updates highlights Matt our on overview Officer; Harbaugh, first strategy. trends, results business Chief Chris review XXXX as Chris me innovation IR Executive and our Barry, session. website will and of afternoon, well Joining updated will which we release, has and results And is financial on with earnings on financial guidance. Form our then, the earlier The this section we’ll been filed detailed SEC. XXXX host and posted the provide the of question-and-answer X-K issued

We supplemental financial posted have on also our IR website. information

this will is our later on As recorded and website call be a available an archive IR reminder, being today.

law, SEC. obligation cause which as by statements to this speak and expressed could respective correct, factors to periodic that their news comments that materially date. results with which, information, which in to statements. to other differ materially like remind differ if involve from forward-looking filings update expectations statements, and do Before you call the prove actual The any based implied include such are by release and materialize no we forward-looking required described or we or during actual be on assume current results NuVasive’s risks factors, those Except to could they forward-looking are cause and started, our will assumptions as get uncertainties, I’d or of

are today’s release supplemental of the most Barry. Reconciliation of accessible these will which this IR the measures to Chris call measures. in information, website. to addition, now, the earnings measures comparable financial are introduce include And directly I’d of in NuVasive’s both from certain like financial non-GAAP section and GAAP In included

Chris Barry

pleased with to and led U.S. further our spinal increase adoption the in to on of decline payer by in term in the support with the headwinds This and portfolio the growth by our health strategy and near hardware and Simplified single-digit product Cervical execute confident business, remain new year-over-year for growth. long In our opportunities including CXXX continued high cervical, of introductions new system growth, particular, I partially delivered in Disc, NuVasive in performing and growth procedural U.S. key The good of quarter, increase NuVasive XXXX Clinical well fixation. year in the volumes. reported unit the performance, call, basis constant prior was and innovation we today, we our COVID-XX on an Juliet, of or Earlier impacts period. quarter a first the currency in of provide afternoon, results. XXXX today’s million, delivered an continues return I’ll X.X% our updates half to a growth international performance. commercial Despite strategy, net I'm compared saw on On This basis, first growth. of our of vectors the in to March. across strong during our $XXX.X very XXXX first with multiple on of review volumes by first as in driven biologics benefiting first procedural offset quarter expected sales business everyone. surgical February which evident our financial highlights sales you, U.S. and Pulse quarter, continued Services Overall, a and overview mix. interior reported rebounded Thank business due platform unlock a X.X% quarter thoracolumbar from was

throughout to a in to growth our delivered double-digit technology due Europe. Europe execute Japan, see offerings. the we And impacts the performance well, as to America continues basis continue Southern we differentiated to performance related to Latin and delivered constant on growth growth in high-teens year business on despite period COVID-XX see strong international in basis. our solid region. currency a reported over We prior continue low

by led technology enabling is driver platform. the growth Pulse key Another

the We cases expected with against international Pulse up our in first With as running milestone United Kingdom, the additional Pulse are in case XXX in executives units States the resonating proposition for the partners and value first Pulse. and is hospital and recently executing commercial globe. our the surpassed surgeon United and commercial plan the quarter, around

integration importantly, As into operating a Siemens Pulse Spin surgeons surgeon ecosystem used architecture the solution. software platform provides room collaboration in multiple Cios software leading integrates and with XD with be current mobile seamless unique and future can our workflow and allows the C-arm, it's reminder, when technologies. ecosystem which in a a Pulse We're XXX% and intraoperative single XD and seamless spine to multiple for between cases. the of hospitals This the utilizing surgery platform. for technologies hardware Healthineers a integration provides pleased enable Most partners extensible imaging technologies

We've to We in robotics on execute our map. numerous completed and continue year. with the have robotics throughout invest R&D labs and additional Pulse labs scheduled partners road surgeon

thus, we and Pulse approval will at complete have date. later will submitted in milestones yet robotics positive, key the a this very Pulse been for for has application and a provide we feedback will first upcoming surgeon not on early we year. human be platform, not While regulatory information

to Pulse new is is will team support making and resonate most preoperative investments we've end, platform. surgeon new for what and our advance partners. we planning and applications, broader Our Pulse that tools applications analytics our of the on integrating new progress ecosystem, the with believe out building data strategic the development surgical new made To capabilities will strategies

Turning for to strategic key driver growth cervical, the another company.

evidence Reline two-level patients differentiated this with schedule provides demonstrate used to simplified compared systems alternative our to in disc cervical XXXX. to Reline this was Pulse a to next-generation technology. Disc, publication of Cervical the to and continues $X.X platform simplify reiterates The fixation To rate delivered and further our technology today. system, data that to Spine. growth To most disc's the on support peer FDA the system comparison clinically U.S. the greater published of to success the replacement in cervical compatibility total portfolio the has Neurosurgery of effective surgeon we advance for techniques, Simplified XX-month the body clinical tremendous position from the ACDF procedure cervical with posterior seeing market CTDR. segment. study of I Reline Journal growing IDE quarter X-level the continues in benefit than fixation the disc XX% as one in significantly recently CXXX in at most follow-up cervical, third review feedback greater in quarter. comprehensive led The portfolio disc billion sub-segment, was launch Fixation first forward and look the superiority when on the integrates receive our This Cervical remain the Our by more which

to receive to incorporate in new share We Reline technology spine $X.X the on continue to surgeon technology are to most position sub-segment and we $XXX differentiated take posterior extend to million positive industry's evaluations in continue billion further innovative clinical in expand surgery, portfolio. the our the invest and sub-segment. this leading feedback cervical In invasive cervical and and less excited anterior

with comprehensive to posterior surgeons solutions and the Our or procedurally position, patient integrated any lateral address the flexibility prone procedure. NuVasive pathology a column treat anterior providing from

ALIF. posterior in begin continues We surgery. and on anterior posterior in procedures. Research Commercially We and spine latest titanium of designed porous both strong for due our evaluations adoption lateral ALIF clinical for track implant continue see on to for XD our growth XLIF MOD MOD Modulus interbody is Modulus launched expandable printed ALIF, supine development and procedures. on surgery XPL remain to to XXXX in and XXXX, surgeon for next-generation XXLIF ALIF lumbar

The remain NuVasive addition, posterior decompression for procedures. In continued launch growth comprehensive tubular driver NuVasive we differentiated the on retractor global we system, International the of tube will new will to a in of XXXX tube and portfolio procedures to around growth system less designed and half addition schedule system XXXX. globe. fusion support key in to beyond. key second be remain Anchored the prone infrastructure, technology anticipate by instruments a our and our a invasive

We technology. by recently system in announcement supports other In XXXX, City. our has Specialized surgeon our the return the San center benefits efforts precise the significant XXX benefit in and a from education surpassed as West experience is Precise than New at efficacy NuVasive. had year opened recent I'm our East outside any milestone U.S. our our Coast the training markets novel it year, York pleased of will surgeons clinical that with This publications. also of and from we expect experience international The Diego our supported Coast of is record outside peer-reviewed NuVasive center more that Orthopedics at key now business further

invasive TLIF. In in on ahead XXXX at in surgeon momentum take and As I'm share education professional to in innovation business our enabling market our international for extend drive share, our for both Simplify, excited in our the XXXX, encouraged clinical surgeon I'm differentiated underrepresented and subsegments business. and program focused growth high industry leadership and development our and less and XLIF MAS for demand our progress surgery, the had NuVasive. Pulse, where leader historically with on in by continued technology courses training remains we centers what's deliver closing, in position training,

company in a call We spine to of to Matt delivering will We're spine progress now of to single the minute. vision helping focused to transform company against subsegment sustained from that are our care. a financial future I to growth, a the results change unlocking on evolving discuss patient's detail. greater committed and making a company's value life the every turn is over

Matt Harbaugh

through Today, our first drivers. I you walk financial good financial results Chris, the will will I everyone. afternoon, guidance. also updated XXXX Thanks, and cover XXXX and quarter

results press financial today's Our have in provided release. detailed been

million, period. sales discussing GAAP quarter reconciliations. refer reported X.X% During measures and and increase our you for to a my currency $XXX.X an net constant basis be of press non-GAAP remarks, on first to were Total I compared the non-GAAP year prior as will GAAP to and X.X% both release

story halves. first a of was The quarter two

and health The significantly was impacted shortages. care the quarter first staffing half by COVID-XX related of

prior half markets. product constant cover momentum our million most continued period. and volumes including America quarter were the XXXX Japan, and the of of Despite as Cervical these the and sales first posting XX.X% results international year procedure new second driven hospital led basis a over restrictions growth. These in our grew on compared of XX.X% $XX.X Disc, in Simplify a key headwinds, all the surgeries which portfolio, of by shortly. our platform the and elective However, reported by eased increased I'll to introductions, Pulse Latin we Europe, double-digit more the detail quarter as Strong systems improved government currency positive in from cervical saw

than greater some million year of growth from thoracolumbar unfavorable X.X% the our U.S. U.S. spinal adoption Within increase platform surgical performance growth our the sales cervical net grew year share both Spinal $XX.X somewhat over including This quarter, key payer XX% X.X% to Simplify of cervical which period. surgeon hardware, Hardware CXXX period. highlights NuVasive was net declined increase business, U.S. was U.S. representing increasing Cervical prior from sales million, in net in an year-over-year by first led were by portfolios, the the compared with like the our support posting muted Clinical Services, This to I'd Disc. by $XXX.X but product quarter. Now in results the a year-over-year first prior lines. to Pulse system, Biologics driven mix. our was the sales were of due and

increase Non-GAAP the higher year-over-year $XXX.X was million quarter by period. highlights. was operating to the volume. prior year now compared $XXX.X to procedure profit driven primarily in in million The first Turning gross

low non-GAAP percent impacts, decline to and by decrease prior partially XX%, inventory by XX.X% was product basis a in quarter. the a mix of in normal in sales, offset period. compared margin primarily year XX single-digit points net the year-over-year decrease was a of driven The As charges pricing levels of gross

our in $XXX.X R&D period. of particularly net year non-GAAP in First X.X% year-over-year primarily driven was our sales The to investment commissions, freight quarter million to the $XXX.X by spine variable core increase enabling further and portfolios. expenses expenses XXXX an sales operating million, were and higher continued compared on prior technologies increase expenses

will we continue also are monitor and experiencing navigate. some to inflationary which We impacts,

continued non-GAAP XXXX basis decrease of change and prior to XXX margin quarter points XX% in the The of Non-GAAP period. $X.X in unrealized the from XX.X%, decline was XXXX foreign for the First primarily The commercial. margin expense year compared the quarter currency other by of income was year-over-year driven the million year currency income of year-over-year operating in prior to gains unrealized $XX.X foreign prior lower was period. million a and investments expense losses in year was attributable in gross period. versus first quarter

consistent $XX.X loss year the period year. includes applying senior method $X.X diluted a convertible in the prior of in or decreased or last of diluted first in diluted of the reported $XX of QX The period. million of year largely per per compared the $X.XX XXXX in prior earnings higher a sales non-GAAP gains, the net basis, tax XXXX Non-GAAP prior XX%, which diluted we was if per of year diluted to a income basis, a was $X.XX and of million GAAP Additionally, unrealized net earnings income $X.XX notes to rate we GAAP effective quarter by expense compared On $X.X of $XX.X driven contributed million to quarter tax period. in XXXX. as share first period. settlement XXXX EPS share share with result share year interest converted loss $X.XX reported per or dilutive quarter the in period. $X.X to the of earnings prior expense or the compared million which the foreign to net was first compared QX notes. impact million was per income share of currency company's $X.XX March year diluted million of net of to of This prior earnings the convertible net the On

cash flow. to Moving

flow in negative cash period. prior was the $X.X Our quarter for free positive million of versus year by first XXXX $XX.X the million

of quarter As typically the you flow first our the negative. cash historically know, lowest and year is quarter free

from impact volume addition second to in had from of increased. lessened the we COVID-XX collection as cash resulting timing QX seasonality, sales our ramping typical and In half procedure

December primarily related XX, acquisition-related XXXX, milestone CapEx consideration cash March of As and payments. million. XX, of XXXX, cash we in since cash $XXX.X QX had to equivalents was used contingent investments The and

$XXX facility undrawn. remains million Our credit revolving

XXXX year full our to guidance. Turning financial

raising as X% our growth as X% a sales the quarter, XXX currency XXXX. of of for follows: our and business X% basis growth anticipate sales provided on and of X% to net guidance of guidance range previously the in to points reported includes a to We This reported updating on or X% net basis. currency of range constant strong an the now for exited QX we as we results net are X% to for approximately constant Given negative X.X% overall updated the we as health estimate are guidance XXXX basis. our We impact X.X% sales. low-end currency a of

net to We range earnings are guidance margin, expectations on changing not non-GAAP share we earnings revised guidance We XX.X%. for range now range to earnings per $X.XX. our based our guidance per $X.XX operating a previously $X.XX. of And non-GAAP $X.XX raised provided for We diluted range non-GAAP per diluted which in to share non-GAAP for remains of diluted sales. for share at XX% our a have expect

these guidance considerations range. macro the factored have issues remain these and issues are our cognizant that into of us we affect monitoring While all, closely we could XXXX

the in momentum new confident and product business, growth. multiple our of our with vectors from are the especially positive trajectory of introductions We

continues to our open be on our plans and for the questions. benefit stakeholders. focus our the of delivering on commitments now, Our please executing operator, for all And on call

Operator

Josh Thank The At time, from ahead. first this conducting will question session. is you, Please have question-and-answer Sir. Cowen. we go from we Instructions] Jennings [Operator a be

Josh Jennings

cases and difficult to if strong any mean, questions strong case my ask environment. is the back, afternoon. market, were and for early mix. year in cases the Thanks specifically, could benefit more start taking of even NuVasive back the congratulations in late the revenue of postponed coming wondering you Hi. it's from and to potentially thoughts year revenue increase the complex last about recovery just on case. January, to quarter also that despite share more for first spine performance but one and the complex Good is coming multilevel per on wanted a I I

you types? think, total again. just receive you Or and case across benefit, a purely question the that taking XQ? -- Thanks broad-based should it for all volume it recovery And congrats was did was do So continue? in different

Chris Barry

didn't vectors I We've of in and anterior, or I've evolved. minimally we've made We idea million how really And company. a appreciate lot of sub-segment. in investments the a over our moving of one-dimensional leadership a talking been our proud if and $XXX are Josh, leader the of about What question. from I extended the attribute our last see you really from years. our you, in think company couple we've And ALIF. leadership about we XLIF growth. now was now lot mix now, the Thank growth this balanced out really invasive We multiple where really change. that I'm of

with to low couple of take to in have quarters in traditionally we've expandables. to we've share sub-segment. of case share, posterior, now technology ahead system a row, in and got tube differentiated continue that remarks, surpassed $X.X talked growth. I prepared on delivered we've make in billion, The We our still the XX-plus milestone. cervical, $X.X some Pulse, segments about with do percent that's advancements We've work a had XXX billion We the some us

and that's XX% us. a global running. consistent the digit, talked grow about, as double represents And for of and continues overall and been business that's that now to up I've lot revenue, So

see. our pent-up we demand So growth those in to. But forward, for appreciate I question. things combined going mix what see it is we'll see but I complex, the may the attribute I didn't the but

Operator

go Miksic have question next from Please we Matt The is from you. Thank Credit ahead. Suisse.

Matt Miksic

this understand mix, product is, maybe you the a congrats that comments and Thanks sure to some the year. in strong was unfavorable start Matt, A mix on, some I throughout guidance, margins, your the there full that Could on have of correct follow-up we mentioned the really margin to about on make Great. just bit quarter you year. expecting your And dynamics I then I margin you're little But the year quarter. follow-up. one the quick maybe for margin and talk guess, to holding a year? expectations your think in

Matt Harbaugh

together I how Yes. came for pleased with us. the very the quarter Thanks question. was for

lot we line higher, you with net line the EPS driven income can by came currency in tell, a sales As foreign that of as expectations adjustments. on a operating perspective. was percent bottom an currency, from of

of a all, results growth the addition pleased strong And posted They highlighted. just in topline. just to Chris our see quarter. the all Really with as So in pleased well. that business. would international I highlight, also We're vectors very good to

patch to on Good to the hard or and -- so So we chain find if we and there to higher give change little states as from wanted that macro year. these of Ukraine a end a form the rough more we to didn't continue results. we guidance that's these early events, in the year, in changes operating today into lot just interest goal the get in perspective. excuse it's provided. rate because Obviously, supply an will are start I just income our would And say on the we here an be challenges deliver, to to quarters, be future results strong range me, room. ourselves our of

Matt Miksic

maybe back get led can right you for track? and that that your will has and to you ask right then comment out know And expectations but what when pushing so if well a maybe to this Can on first-in-human think of little there when that follow-up, the many so things to Chris the question don't because for it, to as some I that's around I are expect and about the happen. is, the line robot. that to expectations bit time are of way Thanks. visibility hate about going almost talk we

Chris Barry

whole the here the Yes. making listen, the progress. I adjusting But just great expected announcement time really We're line. obviously is question.

very in been We continue perspective. to robust investment the Surgeon good. have R&D feedback has

ecosystem. submit pointed this in We assessment, we do And hardware, April, just have closer, a not project on regulatory system or involving clinical. within for within do to item early is to as a give reasons, only do labs to But systems I'm basis. which ready going will we a system QX, those continue of approval, routine will a And tell gating line. Pulse guideline we're time I want make progress the for a late arm I that software did more not we appropriate and to integration into robot as today. We on work We to to the first time the us I right. the with itself, the complex line get to to just move you, line. the provide assess but elements not time need as the

Matt Miksic

you. Thank enough. Fair

Chris Barry

Thanks, Matt.

Operator

The from question Blackman have we from ahead. next Thank Stifel. Please you. Mathew is go

Mathew Blackman

you talk Thanks have of growth international was a Good the in as everyone. color is the a what you I guys little bit hoping time driving can to actually And afternoon, business, important Japanese more question. Japan, bit that spent about international, growth you're a little revamping whole. particularly, to But proven I really for my taking it's the be driver. strength durable a on seeing ton a know there. business and us give

to get also help sustain relative that relative why of sense there? can to markets market. the the even but trying confident outsized Just U.S. Any there, you're this you to growth a

Chris Barry

a dynamics are an the Yes. And of investment different. It's us. competitive I for slightly been lot think -- area

U.S., of competitors a the here that if a competitors, out the we necessarily U.S. lot the of If dense see you get you is for level. global don’t more at smaller will,

number So one, slightly the different. are dynamics

specifically, Japan investment. as a good we've far made As

specifically supply and We've Japanese the real got products chain. for that introduce market. team, right the have commitment a We infrastructure, made to market dedicated

Our further been have developed logistics there.

into create that things, have evolve continuing led us those So a to position and leadership I very good market. in think,

our Latin development things furthest to markets, the I'd doing We're some talked Asia-Pac, what markets the the those driving we've European things that key U.S. some is like in see outside the do So in be growth. model that of in of to in along and other that’s and large is The model. us a in exactly Japanese Japan America. about. happens

Mathew Blackman

-- you I any question it's appreciate in market competitors? But I size. here Simplify. small still. one the the I appreciate you you starting the are not success seeing you is in that some you from and CXXX a sneak if a But days working today Or share really slip sense whether seeing taking early And on again, expansion? are And it's more of other could as Thanks. talk see way just portfolio to to it. to see early, for because broader of into about Appreciate pull-through are Simplify? are hearing portfolio new get starting good whole, Is accounts? as

Chris Barry

Yes. shot A that take I few one, there share taking we short-term. questions in the I'll are a believe, obviously, here. Number in

I very in technology think we've the got differentiated a clinically CTDR market.

some coming sure, time. market of durability We the I say, taking we're would starting need leading over we're see expanding in to at. early an that we're also out of acceleration answer the and in looking It's stages to market that's we of share. of we're we it. So COVID. I the believe data market, see early But for the But happening, is yes, CTDR feel and think

how gets, think fast we'll large question -- forget. the how was I And Now have I and that last to see.

Mathew Blackman

Pull-through.

rest Just of of the pull-through portfolio.

Chris Barry

opening portfolio say the is it's our CXXX benefiting the I'd product, Disc. -- Simplified lead-in doors. from which Artificial So is

that's introduced benefit is, and past answer We're meeting the engage seeing portfolio. portfolio. broader with across that new in the cervical surgeons We're yes. didn't we new in the a necessarily So customers

So and I started. think we're just technology, we're excited the about getting

Operator

from Vik Chopra from Fargo. Thank have The is you. Wells question we next

Vik Chopra

the to Thanks start Good great taking Hi. XXXX. on a questions congrats for and afternoon.

me. So for questions two

know product second still from a with think quarter? XXXX? talk your out new that about you so quarter how to this we you the question expectation much Simplify. should Can updated guidance sales growth growth the the maybe guidance? exceeded know from in for potential I new And contribute blew potentially launches. perspective? half the First, I and Thanks Simplify stand revenue you How coming do XXXX impact my much. And sorry, is on products on to about in they is of -- I'm from performance the your

Matt Harbaugh

robustness With international greater if is Simplify, XX% had Thanks. regard talking you missed for we've the bet. the cervical is to said talk in than cervical the remarks, you're Matt. portfolio we You Chris And quarters. cervical Simplify. reason CXXX last only kind the is two our This about as doing Also of about in growth prepared for that too. well, of

the the the about taking quarterly all-in-all, new think cervical, about we're think really year With I you just a share it and I'll remind I on to on around with don't basis. question in it of my coming on the really though even it the growing taking our a growth products. basis, regard And remains that share then results. last about the comments products is we're call, this So natural pleased your about is full other which and changed new today, guidance half and from in half is and on we growth business coming a from half basis. of

perspective. should you year on a full about think how So it that's

Vik Chopra

Thank you.

Matt Harbaugh

Thanks.

Operator

[Technical have David question Next we is from Difficulty]

Unidentified Analyst

of on thinking guess, rates debt Joseph is be interest much should we as I right impact is now about rate? floating This EPS How the how first increase? And that on guys. David. your question. Hi, for of the

Matt Harbaugh

Both do million XXX We are Thanks. two notes. convertible have tranches. Yes.

today. It's can data reasonable. that the the It's filed XX-Q all in see we You manageable.

which or on X% on went out drawn LIBOR our it's I way We have plus our plus we it's were leverage, of the draw not -- that, LIBOR on X.XX%. my to on revolver, to prepared If talk remarks. depending

we're So market a balance very sheet from but perspective. comfortable good we're tracking carefully, that shape we're pretty in the

Unidentified Analyst

there can chain in to procurement? notable more. should I then Is wise one Okay, Thanks. just squeeze that especially titanium structure if in with And that's the we be supply I anything helpful. guess, aware of,

Chris Barry

eye. close a keeping We're

questions some on comments I to prepared were remarks kind his close of around up a in Matt's -- keeping think margins chains. supply it had the we on sums of guidance eye

add. the anything budgets, We material some yet. feeling a this we're have if pressure. at of we're on travel an things don't of material the it. bit inflation We're internal on still areas so little particular to to that. But feeling overall, early haven't keep time. But like in experienced going anything you like I But know it's Clearly, eye in nothing year, freight, else

Matt Harbaugh

just bit goods frame labor would our cost you if From I a a financial of there Chris. of it the little roughly at and is three-fourth sold, spend further, perspective, Yes, look overhead.

so lion's considering thinking But overhead that is think particular the keeping there's right I world And going on. us on good commodity for for labor our is in if line item, you're and which we're now. share yes, something eyes the costs, what's about

Unidentified Analyst

Yes. very guys much. Absolutely. Thank you

Chris Barry

question. for Thanks the

Operator

Capital Markets. from you. is Thank we The have Shagun from RBC Singh question next

Shagun Singh

Thank Matt, Great. a could year. if or here. you through provide the I QX print cadence you much question and on so color for the was taking strong congratulations wondering some the on

consensus was about QX think EPS year-over-year previously looking down and X%. in growth for I X%

be the long-term. So puts any just would helpful? question a just and takes And on

You're about X.X% following to XXXX underlying last guiding growth growth X.X% X% to in year. about X.

and think as mostly are I Pulse is Simplify Pulse additive -- well.

So LRP your and end XXXX Thank X% X%? or You expect top to what the goal to does this imply of it? at be for above you.

Matt Harbaugh

Yes, a too frame I talking early be XXXX. but XXXX yet, would it's little on how here's just to

around -- consensus a call, at for prior this to looking perspective, didn't XXX. we're net from sales QX As it it was

ramping, that here and is Simplify we got to last quarter, so we're then good quarters. use said a what future that to considering weak a half into plan get weighted. I we've you question, the deliver couple And strong NSO seen we've should months see remind think along to far. against. for year I'll your quarter number third as and year. second a the have And just all of that's We've Pulse going for to quarter, around this back the

but released second as We quarter. to the the play performance here we field kind to So down bit strong today, of about guidance little were we further that it guidance. in a also wanted raise the us led reflect thinking

Shagun Singh

willing question. Thank the you. Are you guys from be taking what in Pulse contribution Simplify you year to share guidance? and and might your in for full assuming Thanks QX the

Matt Harbaugh

you Simplify earlier, as couple happy going about because over back in that's last the talk We're grew total. which Yes, of portfolio my quarters. to CXXX, to I'll is go the kind cervical it that greater you to the opposed that's story to cervical Simplify, really than way missed of the XX% We're we're question Simplify. specific support that's there, lion's of doing about remarks Pulse, only we units placed then U.S. U.S. was down year-over-year. And of actually it in prepared the with which we was on there focusing the were by see challenge the in only what growth NCS talked share can and The on strategically

the So a that's put we lot pleased a by but little results, with of bit Pulse. that pressure, of driven are

Shagun Singh

you. Thank

Operator

question from have Citi. Thank Joanne you. Wuensch next The from is we

Unidentified Analyst

hospital capital touch environment, Anthony some is just our the what seeing Thanks. for Good also from questions. on And on impact Joanne. Can provide afternoon. seeing you how This for appetite? spending the at Thanks taking maybe any moment? on you're staffing just commentary on you're material

Chris Barry

that an the obviously capital others I heard obviously have question. for reported some us from and keeping We're we've that Anthony. appreciate Thanks, been eye challenge. on budgets, there's

experienced haven't We it yet.

get to on executing pipeline the against those I a pretty robust and pipeline. vetted, we are think well we hearing an because job we're had I But things. eye keeping The has the milestones transacted. good it fairly a think team systems done is

are up staffing believe far I fully hospitals staffed yet. goes, that and do As as not

making think I improvements. they're

advantage in I profitable a think benefiting, past. we're procedures from taking are lot spine the generally about, also benefiting talked we've we haven't that that played We're the as of fact areas procedures.

So positive Even market it's still key momentum upside little the we're launches. our from for feeling a us. is if sluggish,

But got to as us. on we'll well we continue an and forward. keeping capital definitely spend pipeline So, with ahead pretty monitor But budgets strong, vetted we customers. eye a feel like go of our capital we've

Unidentified Analyst

Great. Thanks.

Chris Barry

you. Thank

Operator

Thank Bank we The from Craig question next from of is you. Bijou have America.

Craig Bijou

guys. in are in to wanted what you taking questions, this terms seeing of I missed up volumes those see sorry you and I comments and guys from afternoon, for the on Chris, March? Thanks procedure earlier. if April any if But see Good pick

Chris Barry

Thanks, I April be consider May. what to But seasonality Yes. now back natural business. into We're sort to starting Craig. come the would just into getting was of

spring have You breaks.

XXXX with of would coming QX. So, I QX into it was out XXXX good and volume, what like look in line at

had would very kids spring had you traveling, it's So, you have of surgeons reflective traveling. break, which pre-COVID, say you

confident these need how and that natural the indicate seasonality But we May on the prior I feel track, You the out. June pretty say we that of plays it that how reflective COVID would quarter inputs to create had that other business see. see did flowing May disruption. see April is to was but that a all I way would out. turn we're good seasonality the into sort back We'll

Matt Harbaugh

we said, being This QX, a second as for is I Yes. to do good use to the expect growth QX a QX quarter. mentioned earlier. number consensus

that's May use. number a and going are the quarter but So, it to June to good is define that true

Craig Bijou

following maybe that. up And just on

it? but on Chris. backlog talked level normal I a a to you about else pre-COVID seeing bigger volume your back really you or that Just I backlog. hear comments however define to seasonality, picture, or Obviously, procedure are want we haven't know guys a the And

that sure procedures. that's you're seeing still make a accurate huge that backlog not in So

Chris Barry

No, believe backlog. don't a huge I seeing we're

I we're think to getting back pre-COVID.

back for got bolstering demand actually It's levels have good in early the business the that us The the we didn't a to today. pre-COVID that's think pre-COVID. not little number? ways we've pent-up a dependent I Are areas growing because multiple experiencing to news probably on we're we backlog that we're we're tell. is

in to feel infection We're I in, In of pre-COVID to start we volume, which like and durable is for that But deliver spot. in didn't back happened is any we're flows of I a with can we're decent determine can assess durability great natural think pent-up flow that. demand me how ticking rates to level ebbs QX system early to in little with the sign versus showing position. past, So a what the I for the volume. confidence seeing relation us. even up, it a see It's a

pent-up be with any we'll that demand the of to continue may try volume So monitor that, and to it. top on assess underlying and

Craig Bijou

Great. Thanks, guys.

Chris Barry

Thank you.

question? Next

Operator

is Capital. Thank Please we Jason Loop The from question from you. Wittes next have ahead. go

Jason Wittes

Hi. Thanks to for year. a strong the Congrats taking on the question. start

sort be of forward? I guess curious should business drivers how And surgical terms pressure I it growing, side. on negative I'm that looking directionally could where help sounds there of relative How the that I to last three at going to because you a support year. of Biologics know positive going. on think were last the be just sounds about the all the the they're at we of some like year, monitoring which lot what like was surgical be just look maybe was growth and U.S. kind if business in are pieces about of U.S. Thank would it third in you. It part we support, Just think, businesses, Pulse. then thinking is but a XXXX? we should

Chris Barry

I'll But of want take here. Matt shot, to a and what with a got a bag complement may I support. yes, we've bit say mixed little surgical

a see And like growth, of biologics. next normalized have going line business forward. volatile which we We into market sort a to several it's as with engine next us driver for a and growth quarters, a growth. NCS be in rebounding feel of bit the is Pulse in We years Obviously, had over few then going quarter. growth the

mentioned, Matt payer It's market. with a grow a some issues. It's As mix of related the business. volume-based more

surgical three elements up the those So make support really business. -- that

accelerate going to the biologics to our looking business clearly out and continue monitor to NCS we'll we're Pulse continue forward. and the So the business build and system,

Jason Wittes

On if right now? Or Pulse, up gradually a quick sort it full of, could. are for launch now? Pulse we the to follow-up, assume still in of just we that launch we're can full a building stands is still as And kind I system

Chris Barry

line. milestone, kind got talked on about. I We've XXX starting of would we we're say case that the

pipeline and growing. got very somewhat way. right kind the this cover I is as being selling insights we've us the had the good, of there new to install wanted these to these do capital, utilization right how we in we We've to way. for to ground think always to specifically launches, So do But the

I that working in forward. accelerating the the outside as to expanding we'll safe steps U.S. globally. we're we're that and move to signify continue launch Europe, mentioned the the we First We're earlier, and U.S., But cases in starts say accelerate full in launch. overall commercial through

Jason Wittes

queue. Great. jump Thanks. will in back I

Chris Barry

Thanks Jason.

Operator

Thank go Securities. you. Richard is from The next have ahead. Newitter question Please from we Truist

Richard Newitter

year. where to a to ago, put you do of some payoff couple curious, organizational could is I'm you've are the you? that relative you Chris, Hi. And a growth about product since decisions. where to get on and taking Thanks think payoff When to from great congrats tough your think on years then, was for seeing to start off, hoping you where relative regional, I what strategic I international. you steps some to that do and initiatives taken moves? the in remember a came questions you made start decisions, just trajectory those focus, relative where decisions

Chris Barry

engine almost the as some We're in for And invested the we days, and down, in opinion, room our our markets. growth, saw international Yes. down team We posterior four pretty early doubled vectors to couple of lot we there, a came growth, procedures. cervical. run in the been good years well. position Thanks, that in And position has quarter out really still nearest And we We ALIF and as started doubled my there's I now, in of the interior. Rich ago I I of and a still was durable investing accelerating there. in there. over question. last in the years From done job. that's this to think growth through us for opportunity a talked key about multiple round of

invest to in enabling continue We tech.

things, feel kind those I say, we're now of to us all show have think, for of would last led investments quarters, start point. the to those over I So up starting just to few this us.

leveraging with really last dimensional company a What and we Pulse chance create lateral some position the the coming of really a about to durable procedures more that extend those the of the both or right pills, Day we integrating all us how Investor opportunities, say our to over organic in of create forward do Pulse investments of and really into the with growth right innovating integrating we've right the later. our sort do we platform, company, about years. inorganic us But, can unique to excited most technologies and expanding to procedure. But think in? that, have to which start ecosystem and to we over How innovator -- hopefully to Pulse it's in we've So a then the are forward. new procedure? the to capabilities forward I the from as think, walls a doing comprehensive surgical think technologies, lot by the I say, looking the early comprehensive sure think pivot that three which over going talk have to I most in to both term. We're this make four leads to of three I broad years. we're opposed allows space, of different pretty got from I we've market couple now real down, So, leading days procedural-focused procedures, think that made of brought last to last in longer in the sort a one quarters the years, investments multitude invested investments within looking what in looking the the made the make start we're We've across

Matt Harbaugh

math quarter. COVID sales years, performance the saw thing the been growth, especially the that for were Yes, consistent total to if we've that do first mid-double-digit going other this double-digit pleased over we've markets international been growth on there seen the very said two a in The is you the had we nearly a year business quarter net years, basis, it's relatively we're I've other in see, the impact, actually aggregate off. that But, our the point. some thing throughout to pandemic. what of full We has see a which at since our to total international I'd low continue in from We that despite business. is in last financial in add perspective saw

Richard Newitter

sticky can at guess, of ongoing is use, metrics Simplify, On and I you here to sense terms that. any to looking know you I be some repeat us a for early, just versus but that Thanks what in might give aspect? are that ordering? what share evaluating how it's trialing

Chris Barry

better a the mean mentioned and or but there and of was significantly some remarks, for CTR ACDF my post-op between recent I in study, study CTR I was Yes. data this Simplify -- head-to-head there's procedure.

I if type extending So excited sales And the looking we're sales at. of now organic metrics I where just But And about look They're to of technology. sales, go. this I'm repeatable. scratching we're service most don’t -- think about same-store of on the We're we're customers. at space. our I demand high. our as our and not all of taking excited is

high demand centers for training on are training device. in this Our

it's ahead accelerate. of lot of There's to we're We in the pretty organic. going of So we deliver, we're to continue number. not fuzziness feel and to a on lot like there's -- a schedule need what

Richard Newitter

if I things squeeze And could fluid. more I Excellent. just are one that these appreciate robot. the in on

a the is this that on that robotic You want likely where the timing will to guess, that's with to expanded past, not in things it something hold? set more current be delays capability I be first-generation will Chris, systems your screw it and still time. with asked kind more to question, level, you going get with on Thanks. some competitive robot, And the be market advanced advanced? thinking next-generation should when market coming right. But point placing on just we robotic causing that feature at be likely that that here maybe is in will pedicle you of be does and but comment that to you I've you come said Pulse when do

Chris Barry

Pulse I broader think ecosystem we the I the robotics ecosystem. thing mean I That would about as application its right? think think an totality, about about that in within is a

about proceduralization surrounding about instrumentation talked in we on So on We implantables, on what our talked systems. focus fixation on the technologies, past. is about I'm excited

XD incorporating and incorporating now singular robotic XD, navigation, ecosystem we're adding Now capability. into imaging, this a

an things those advance truly spine approach, the think think, I in to systemic for opportunity us procedural right creates integrated I surgery.

about think robot to don't So, I competition. robot

we'll think And I broader the enabling what I a some procedure think in space be robotic advancements space. procedure multiplier within in to and us will competition. I we're the that, say doing about force tech when for have yes,

Richard Newitter

Thank you.

Chris Barry

Okay.

question? Next

Operator

Gong JPMorgan. The last from from Thank Allen is question have we you.

Allen Gong

Hi, guys. I've got one quick question and another follow-up.

[Technical it's the jumping been Difficulty] been But one I've Sorry before, is, first I know asked around. if

Chris Barry

Did we lose?

Allen Gong

Hi.

Sorry. Can you hear me?

Chris Barry

a you the you there? lost minute. from start for top We Could

Allen Gong

been about just I unfortunately, around. say, I wanted jumping have Sorry Yes, that. to

But quarter? affecting to don’t well. asked we I So sorry that's is when know as think about second for exposure internationally, grow the that's had you, question you to in at is ask obviously and growing some I volumes very your case driver And been continued before. your China. key But we a a if one international to business all shutdown dynamics that business

Chris Barry

and of still mean of sort dealing the with related associated Yes. in the COVID-related for the if mode Australia Good certain in mean, I markets. us. last anything still is shutdown with challenging I answer look years couple January staffing we're somewhat February. was It broad U.S. impact or of into a was or part on question. simple you QX, of at was as

we've have is quarter the COVID-quarter a best and challenging, yet to but Since do one to optimism we more non-impacted me gives period. impact, late can also have for pessimism is that yet So come we’ve some had made. XXXX, not been the didn't have than what level of which that best that both we

market. more may have of of a with given choppiness that deal to last against more So and coming the the we out of challenge insulation still still some in we're we areas years, any we diverse, have we're that little couple of But us dealing which pocketed feel with. clearly gives

Allen Gong

Got a seen seen also better of it in more pressures incremental headwind I line because been little P&L expected, bits we've less but top from then, it. on mixed has is we've a And far feel so lot the a looks than bit what Omicron like of earnings, down EPS.

raising to really seeing business? Has that EPS your so ongoing you you and Thank challenges carrying quarter really raise? for And the incrementally top it what to think of the bottom are has is of you environment, I range your on just worse? own incrementally gotten it's your comes guys the kind better? But nice it quarter. EPS much. Like it first see when it for first the gotten date both so

Chris Barry

bet. you Yes,

throughout year. year. it saw We us in been continued. That that the for last challenge past the has So quarter a second say I of would freight

we're see rolling fuel that surcharges We also in. did

but As I mentioned earlier, it's operating from of hard income earlier, the now overhead mentioned I'll we're lot sold, predict a repeat labor spend goods of our cautious there. is cost where our to to things of three-quarters go. are and perspective, In it. taking right an going a viewpoint because I about

Obviously, there we supply But we to team right get to our we now, be little the and Pulse. for all-in-all, continuity wise it have chips with for exposure to so And seem field of down a events hope for to it's But some question. want all supply able kind more. macroeconomic successfully of to commodities. through I that navigate play for out think bit to with chain Thanks that the continue.

Operator

remarks. for our Ladies question-and-answer I call back conference have Chris reached and to session. of we end now would gentlemen, the turn the like to Barry closing

Chris Barry

I'm to want -- Thank growth. of really very questions our multiple participation reiterate of and these I your close you. just that I'll our executing And proud all thank strategic developing of for you and on deliver on vectors plan progress today. with to

We our all As committed vision growth, have patient's look unlocking against delivering a great you, life sustained and forward and minute. I've with said before, every to making to change to a we progress you remain quarter. value next speaking day. Thank

Operator

joining Thank and Ladies gentlemen, us. then that you. for conference. concludes you Thank today’s

may lines. disconnect your now You

Nuvasive (NUVA) 5 May 222022 Q1 Earnings call transcript