GMED - Earnings call transcript Q2 2022

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Operator

Welcome to the Globus Medical Second Quarter 2022 Earnings Call. [Operator Instructions]. Please be advised that today's conference call is being recorded. I will now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. ahead. go please Kearns,

Brian Kearns

and everyone, Hope, us being today. thank you, for you, with Thank

from be Relations Vice Medical and today's accessible at is Globus Joining call www.globusmedical.com. via available will the Financial This Officer; webcast, Globus Keith being website made Chief the Chief and Dan of Pfeil, and Senior Investor President through Officer. review section Executive President Scavilla, Medical

considered the forward-looking let me or remind statements of made begin, some are during we Before may that be statements. review this you

XX-K identify Form fiscal our and that Our statements materially the for year forward-looking today. Securities cause any differ made our XXXX the with from and subsequent in those actual could certain filings results to Exchange projected Commission factors

on to of developments. not our website. Our filings, events or SEC We update a result forward-looking available undertake statements new as information or future including the are any do XX-K,

to or in GAAP With comparable that, measures non-GAAP should Our not generally together to be Reconciliations release accepted discussion read I'll certain now on website. financial information financial additional Scavilla, performance. directly that the measures our principles for replacements the considered today most the President to not We be Dan also Investor pertinent will business over calculated These directly with accordance measures financial provide our GAAP. on non-GAAP and believe with most schedules should accompanying the are the include accounting and of financial these GAAP Medical Globus comparable available are and press measures measures. the the Relations CEO. call section turn

Daniel Scavilla

surpassing solid was for again growth. difficult It's revenues QX comp XX% sales everyone. for a we the $XXX Globus, X% to good where 'XX second good review and with Brian, growth, achieved QX or Thanks, you million to reaching had quarter the with record quarter. afternoon, results our connect

currency time. with prior record monthly setting the Keith will $X.XX, non-GAAP section. In quarter The was against rate with for QX XX% in sales discuss the exceeded $XXX stronger addition, X.X% record Adjusted U.S. throughout first new and sequential headwinds XX% had we a U.S. performance June, million further and monthly sales EBITDA significant comp his QX conversions growth had primary pull-through. portfolio, Spine where the was including in and growth of versus EPS XX% a robotic gains challenging nonoperational competitive in of year drivers were growth. rep that tax for

is year customers and strong the are sell to and challenges. is units positioned our May, to throughout and these year as with we quarter. pipeline lead deliver continued growth our recruiting business. the to this recognized ExcelsiusXD labor high and single robotic year completed our and Enabling purchasing shipped recruiting prior the in well built is ground of orders all robots offering our in integration strong We'll from record view inflation, X-image Entering a versus a in that that a operating work customers' of is disruptions $XX to including navigation supply in modalities room, our first is Surgeons up year, QX, XX% an second is the Our impact a were key work us be us remainder setting a on over feel to Technology system. international rep and with pipeline XXX imaging risks, as ExcelsiusGPS since recession hands the is the cart, I we to growing a seamless ExcelsiusXD a shortages, records have technology technology and Spine surpassing in half sales. pull-through cycles. but with that we successfully ecosystem potential ecosystem interest their It is should to macro state-of-the-art this We through systems X-in-X driver year. continue both seamlessly. market. to procedures our chain continue In approximately field and sales component XX,XXX for Market said in may Robotic for continued QX. environmental high ExcelsiusXD best to designed get growth imaging up maneuverability, launch. platform, implant Globus domestic systems, a robotic and game contains the to performed strong several positioned procedures prior customer major to grow. we versus we realizing accelerate, currency constant both basis and U.S. quarterly large the changer. imaging a and communicate new penetrate XX% the procedures for continue together million,

front, progress declines last Japan, business growth exceeded a spinal continued market. XX% international year. we trend by each year on markets, growth currency the rates for we as our offset remain compared Belgium, the quarter. where constant of partially to and the implant in basis International second the grew identified of potential positive continue On the to reset business We double-digit in international through Poland, growth continue several Brazil, and long-term India our to on expect X% and growth was We prior a Japanese third delivered quarter market. including for

XXXX, ANTHEM chain delays pattern rest extended recruiting our delivery impact every To sales. but supply has remains component shortages offset Distal supply we've the procurement to difficult, XX% pipeline force Our of vendor and offset ANTHEM strong so annual double-digit vendor far growth, by faced remediate by levels. a System. driven achieved and meaningful of to without in delivered growth been The market with to Plating quarter been is we've times, team. inventory the Fragment expansion, significant family. our to able altered strongest Despite increase electronic on challenges, lead nimble strong. We're being ordering Femur second sales with Fracture its X% System We launch trauma business Mini product throughout launch our and uptake track quarter-to-date of sequential the and products

addition to to these freight surcharges disruptions, continue cost of impact goods our In sold.

to to mitigate these seek challenges continue where impact We of the possible.

elements remain new placements record the the XXXX, product record with competitive on highest monthly Distal move pleased for the quarter, we June sales System. ExcelsiusXD and into system sales Fracture and imaging core innovative I'm X As the imaging focused the successful ANTHEM in of rep robot introductions, and in recruiting. growth: of rest launches long-term the we Femur

customers it now to The over to musculoskeletal world. the feel the focus is company growth. well of second deliver preeminent achieve execution of on I about XXXX our half Globus becoming drive Medical to value Keith. in positioned is to mission and our turn I will all

Keith Pfeil

and reported imaging despite million, prior Dan, a a the as associated XXXX, international. improvements comp growing growth record in portfolio, specific Sales by of of compared We was tough XX% momentum growth X% XXXX second XXXX initial year on afternoon, especially record macro completed QX selling year on compared Globus X% basis. grew Thank days and of good when comps sales quarter headwinds. and difficult when XX.X% everyone. given rollout the profitability the in and you, a in call to XXXX. to QX and $XXX.X the currency number and building day-adjusted in compared a we revenue and had X.X% basis of our X% when the grew I of our EXD with same quarter the Revenue where of we QX strong second prior to versus QX and saw to the across quarter, also XXXX of system. launch U.S. attention QX the constant as

quarter the flat Second diluted non-GAAP was million, net $XX.X quarter XX.X% year. income prior of delivering of was over which year. earnings the share, prior $X.XX Non-GAAP second net to income million, was the per $XX.X growing fully

new our note grown nonoperating a headwinds the year versus million non-GAAP currency growing against Dan is of quarter International sales, year the quarter for U.S. the revenue rate of many quarter essentially XX.X%, quarter reflective countries, second and driven expansion with figure, these year when growth Adjusted XX.X% global $X.XX the million, of commented flow. sales into prior was within continued robotics prior our sales to portfolio. further higher Technologies' as of the second Adjusting prior when for $XXX.X to related in to and as for our do of nonoperating International reported was our EXD constant I and unfavorable compared taking growing cash of of EPS of Enabling Drilling growth generated $XX.X However, and systems, the the currency $XX.X the is robotic sales trauma revenue as have quarter This would share flat our rollout within were EBITDA and continued X.X% Spine, reported a prior reflective the earlier. second on this basis impacts. in million, continued XX% tax system second free noted implant business. growth of year. quarter. U.S. was foreign compared imaging the we higher our by second items, X.X%

as spine offset this second growth sales compared impacts mentioned year by lower by driven on by a as as the constant grew prior and as in quarter and partially The and Japan, However, implant Japan quarter. X.X% basis earlier. Musculoskeletal XXXX portfolios, reported offset revenue. currency revenue growth reported in was X.X% trauma was to constant currency lower of the

second in and our We half. share have confident growth and strong across continued to our to products drive ability a market portfolio deliver of remain

improvement Enabling quarter. revenue prior prior by compared of with the in XX.X% robotics compared year grew second Technologies a Consistent quarters, quarter. comments, call to constant as to saw our on resulting sequential quarter Second basis first the units QX and reported currency and as higher XX.X% year robotic pipeline sales when the between our

our was this received The and extremely the high and system. market EXD as product. by have initial been In our interest well customers. favorably sales of addition, remains in by Technologies Enabling And revenue shipment imaging impacted Dan initial shipments exciting noted, new also

into the P&L. further Moving

continued spending the year compared write-offs profit Our prior year. profit lower million prior second reserves, not was sales were in and the to the XX.X% of offset The sales, or and benefit product and compensation decreased partially meeting higher compared and The were to of that and spending decline was quarter for costs. in quarter second or higher continued quarter lower Research costs, of of sales, second inflation or growth X.X% These increase year compared in in gross prior of we X.X% quarter reflective the of driven the prior the $XX.X did drive or million expenses. R&D expenses headwinds planned in of travel in portfolio for gross line by regarding second $XX.X current made the the to the drivers. is by our in consistent partially as in The future across quarter. expenses comments expectations with year. development quarter with earlier on our repeat driven SG&A $XXX.X XX.X% increases investment in onetime $XXX.X million XX.X% XX%, were inventory by freight spend sales offset year. million quarter is by

of SG&A benefits rate did for of XXXX. of the realized tax QX percentage impact in addition, revenue quarter sales. The to lower prior second in which the in quarter the year current tax versus of exercises, the higher stock In tax reflective increased quarter. XX.X% The rate income the related as leverage is XX.X%, in due is effective not repeat quarter a option to year was

by increased flow currently cash, $XXX.X reflective share continued million We operating of free equipment. quarter, the have and operating provided million and investments repurchases $XX.X previously its in will on working was predominantly shares repurchase CapEx the with A its flows million debt-free. company repurchase cash excess namely investment with The machinery capital, and company We with Class remaining The share marketable announced repurchase quarter spent authorization. The well its remains securities. common as is cash. activities cash and the $XXX.X equivalents the of $XX.X million free Net cash million. as ended cash inventory authorized $XXX.X fund flow in company connection program. in During and lower was cash share to

guidance XXXX includes which sales of estimated in reaffirming non-GAAP are EPS, billion and in our net impacts. fully diluted previously $X.XXX provided year We currency full $X.XX

Looking partners back supply with pleased the on and quarter, currency inflationary we note our pressures, and fluctuations. performance manage challenges the second through and resilience our chain employees am as I of

the technology we implant half sales remain their the we will patients, As to for our across focused on as on we thankful our continued of lives enter I to pursuit items execution operational of maintaining delivery key XXXX, back managing improving share continue musculoskeletal of excellence. our value. throughout Globus marketplace, the focused expand on our and driving long-term continue taking care We shareholder businesses, performance, to the while driving cost are XXXX, and team through improve in team discipline the of focus products remain we and of which serve drive that are

open will questions. for now We call the

Operator

Instructions]. [Operator

Our the from Singh first question Capital Shagun RBC line Markets. with comes of

Shagun Chadha

on I any seen was was any provide on question wondering shortages? And QX? procedure and/or guidance? from my FX into on in robotics just understand staffing of you're as how how impact you if is much And some magnitude imaging volumes versus out COVID your much into color last Have Can you you could Tech, QX. then Enabling the seeing? what's just then supply, built spinal macro help inflation the absorbing guidance. of are you us and You pressures called

Daniel Scavilla

pass then and start, it Thanks, off it's to Keith. I'll Dan. I'll

QX, you, we strides. off. where we've impactful seen yet related on date, comment would in obviously, to of not significantly So procedural question volumes we're would we about honestly, I comment, to your that tell being But anything won't

on eyes are Our that.

when You of know can now, change, never right but we that lightly. are that's where kind

the are. this time point. that's you volumes imagine would intent that to the But not see how we of being over Tech, imaging. at robot out Enabling where of those majority We'll from really it that is robotic adjust. But really break vast moves as both For

as far hand Keith. As I'll it to guidance,

Keith Pfeil

Yes.

QX saw is Enabling a prior one -- robotic thing that our just So look would other when higher Tech, made sales units comment year. add in you versus in I there, on of Shagun, we specific I that

is a business grow. call-out robot our that did So that

which to a As from I I perspective, we had the take, we're have guidance look remember, of give or say, $X.XX repurchase the full factored But currency. year to that, in, share would offsetting and you we the currency a additional share comfortable at But year. by planned felt we to have finish is is some $X.XX getting repurchase, why items in offset guidance really perspective. still that from the

Operator

Chopra from Our Vik with Wells next Fargo. question comes

Vikramjeet Chopra

of Can chain question year? of -- capital you half meet the was your Are Just orders? the the two for your heading the to you're me. your on trends about the into my And in imaging seeing any for these take the on environment system. the and on capital some just capital ability supply back impacting -- looking talk shortages, side demand is the of issues to chip second get any

Daniel Scavilla

again. Vik, thanks. It's Dan

things. when of with we capital Trends kind I'll So some of somewhat have go tough through the right, to a out predict, still few and uncertainty there COVID.

called hospitals, somewhat so meaningfully able date, we before you things. To need of issues through would all there systems through to everyone They it say But to of The the certainly been And the on to any need So our we're many banner would if distracted for working you materials look our as with now, is through I of out go assuming things. we've year seen daily the we months at intent to day-to-day improved demand we are we shortages, that what of surpass last momentum without year, what else. obviously the has certainly us, -- look was for as has but through build think all due in from weren't because the out we significant cycles arise. in sale. with pleased so a second quarter. disruptions just had year, over those chip XXXX. We pivot no environment done pandemic, first we've of to carried We've had our and the I market that they're have COVID. was that pent-up to that off projections. with overly that while penetration elongated for some coming work tell far nonetheless, quarter,

that's to So we've not to been again, that hindered shout a an date. out team incredibly But that's just possible. procurement strong making

Operator

is question Richard next Truist. Our with from Newitter

Richard Newitter

relative better, provided was you just Or a of reiterated hoping you since spine it it to that and same out expectations, of Spine, I that's this. ultimately, international but was Enabling you through little kind the thought a wondering you're -- little outlook. that if getting is piece place? could I your original playing changed talk Where are know guidance, lot maybe originally been feeling U.S. you your you're the and Tech I way there's that would? to like worse, a you the all that

Keith Pfeil

the for Thanks question. This Keith. is

the had business, that at Tech perspective, where As that, in remains into has quarter. kind we from realize land. say, When pipeline we soft business. would coming we business, there don't did that we the our when pretty bit of look last robot the further have thought look we feel still musculoskeletal the our U.S. of back, the Tech and to still But -- driver where that much we the hospitals we Stepping what realized back the quarter, key that as that's it -- But pieces. year-over-year. think But we would could and look going We we of had robotics through parts little Enabling of a from good. bolus out, good for you grow give back, at ton used year be and Enabling to business year. also robotic of year top a about last we all business, you for that all, land I that of I we On on a we're we we to again, back look a the the that a Spine saw the When would a insights bit saw this a feel here, QX of remainder single-digit we have half gate of we're year, and talked overhang cautiously that portfolio. the into out the a But back and to optimistic second across half look maturation as call And out Out and growth look we as cautious year looks a year. money. the business. going look high Spine maybe hospitals feel growth little more We're bullish that bit know feel back may the to business last may that of the that COVID business. -- little get we lower. our you growth came

Richard Newitter

in, you're range, math, up or going I because then half for currency, And it. needs back there international by double-digit Got constant the link low to international Spine missing the digits end it, that would imply is double if U.S. to the guess my be about XX%. call

it that international the good little So Or single than back double half maybe -- digits with -- is the a stronger would maybe do high half original feel in ramps is thought have that low to back international? instead and XX% of you and you assessment, digits?

Keith Pfeil

I'd caution splitting on it out.

we are. in As about remain about positive we landing the where on the the of way. I rest We're think year, we we where X and we're would, strong of thought rest extremely planning the months finishing

Richard Newitter

-- the just range? kind given EBITDA just the about margin what one, currency, margin EBITDA Last still mid-XX% of Okay.

Keith Pfeil

still margin. to mid-XXs a Yes, turning we're EBITDA

Operator

come will Co. David from question Saxon next Our with Needham &

David Saxon

Yes.

Sorry, I with I'll was Tech. on just start mute. Enabling

of the strengthened book quarter? you is in the the into the weakened are of then looking we you still the bag in systems And half on Or comment order now you have of quarter you third into in success you order second kind individually? ecosystem? combined kind back Can was are obviously I just system quarter, Just first selling of curious, book being as how each kind just go multiple the here. the selling the that there, saw

Daniel Scavilla

Thanks, David. This Dan. is

have even we this in it's a quarter. question. began yes, just combo And this a as great the we second with So certainly opportunity launching seen

smooth use the are and hear is intent there to we And seeing is be So you further. ecosystem, be do and intended together. it the these that, still because activity. used that the are them to using built out needs phrase, together, us But that seamlessly value

to that way. half? do that make And to the to that intent you push inroads will handle be continue want so and the Do and to second

Keith Pfeil

you repeat as The -- your part relates the it of half could second question? second

David Saxon

how book, Yes, just you're on the about it? feeling order

Keith Pfeil

Yes, the order book.

when look year, X still you when at Qs are a at so And quarters. and X -- historically, historically look you slower

would X. QX quarter building. quoting, We the remains robotics book are is and around Qs X is and that the But I order typically than But caution activity Enabling a robust. slower actively Tech

David Saxon

on relative robots strategy? a existing thinking how latest you're related just want And some the launch maybe set talk then the to question Maybe the market? of about And robot. on knee the about Okay. timing, in to if the you feature

Daniel Scavilla

tell approved no yet. No, Well, been not development. that under would it's it's problem. I you listen, It's

to So going is. about it walk talk market. I'm And looking and It's out where not on well. features yet the the it we're forward actually, to just out of progressing it with getting

to the next we certainly planned, to have as and want going Our exact it if again, That's we features. of of it approvals be. add we benefits. more half initial estimates, that But really out is XXXX. everything goes first be need year will appropriate before would get about in what several market to go talk through, It a

Operator

question Zimmerman Our BTIG. with next from Ryan is

Ryan Zimmerman

to beyond. certainly want guess perspective to be I mid-XXs maybe adjusted make of as little there, Keith's in around for a and push whether you, to on adjusted the bigger I the cetera, continue helpful would reinvestment Dan, and margins your that trauma, at into in maybe little you EBIT to look you comments And lever, as these level recon appreciate I'm you longer on get growth margin higher 'XX stepping it want I and inroads et around expect out bit your that. join view expense be to we term CEO curious EBITDA the as being guys role. and but in for a start into about positions

Daniel Scavilla

that long-term spend with for we we're and And it. the tend profitable is have not those the that I today one we we to means by mid-XXs if for growth. we and Again, okay being quarters, by. long that of as other items move invest Thanks, do Ryan. question. enjoy term. hampered downs, the through you've appreciate and as And short-term the We're seen

go think longer always that we date, I over But that to invest leverage that grow to to and opportunities would where on on remain can we we EBITDA. there time. within can up work mid-XXs be feel that ramp through a we everything and ultimately,

us at off particular, And that So hampering set don't signal see hindering that. in negative I to us of stage, in I like any coming this don't for off investments feel a would of reason we're a or fashion growth. levels

Keith Pfeil

would Just you thing that, at our numbers, spending look to R&D when the our one at I is add quarter, XX% as year-over-year. example, an about up

So are investing. we

Dan as investing been think, thing. our as I come robotics to you R&D. looking that the that those We And lot business. online, can't big businesses of in a to reinvest continue go said, we've forget next continually the we're in took portfolio grew

Ryan Zimmerman

color. you That's a guys then, did Keith. good that, And I as shares this mean appreciate quarter. repurchase just I some follow-up,

You signaled be least still on to front. you and million, sitting think, have, particularly a I think aggressive, I intent have year, of around you Keith, at lot on said more last But $XXX M&A cash, you're your the remaining.

And more so Because, and sitting curious on not as you you've while, M&A probably does signal you repurchase we again, seen cash get at for or share items would haven't guys there that assets the there's there have attractive that expected. this kind this on we incrementally time? front out really the aggressive of I'm been are to a out

Keith Pfeil

change they become mean interest have going look valuations did, make to We're sitting a one stay borrowing to more on increase back the is the continue now But cost took our we're companies. doesn't coming call some going into of grow organically. and around going I signal shares would in And but really the sidelines. down. complementary up, these out to to of thought that we to continue to rates long-term went question. that where acquisitions. quarter, strategy. some for the other have opportunity really thing is it's buy slowed would favorable. market with We're during would One I They COVID, IPO has we that way. continue and the a going to great Yes,

I I with opportunity for like more think, us. create to environment, cash, it's think a in it's And sitting sort going opportunities for us recessionary any amount better create us. company a a going of of to for that

Daniel Scavilla

I'll to that just you that, know add Yes. Ryan, act to of us, feel we pressure don't right? too, think because I the cash.

the move. strategic be a we've long-term willing growth, to the It's sake to move for, right just, not the over it. to but for of we'll And seen use use But it to it. not again, got that date, make anything for we're the happen With move we're it time. will going right

Operator

from Our next question comes Canaccord. Kyle with Rose

Kyle Rose

Great.

in constraints to if EXD. your biggest, So I guidance chain understand components. chain, are what just the guidance relative supply one the wanted top where it got and end of the like situation and/or worsens us the gets guess, I bit to now. talk sounds Maybe new to that the line with help through products a you as headwinds of would year? pertains assuming little more stand about you the It launching just be electrical better Obviously, you've supply

Keith Pfeil

So thanks for the question.

look right really we dealing with remain job out, challenges. supply nice done spite in it line chain looks guidance, and challenges. look supply the confident now feel these comfortable we I But working as keenly as of We're in aware our that we of can Dan chain challenges. around ability our And as year. even deliver a to has the at fulfill commented earlier really -- we top and that a from the perspective, very our of team supply So chain

Kyle Rose

at they on towards talking total ortho then that joint rentals, And sales one earn-out placements trend, earnings of sort. when Okay. larger was an of increasing were peers about the things that your commented in some moving the the capital space of least

regarding a on tangential existing seeing question building and my fair think it acquisitions mean, now? question any Ryan's any had type or buy ask I'll think bit perspective. you've than external purchases more as historically, M&A. there? commentary is you of I And about that Just have TTOT from build a you're in products little we a Is well, which made that you're then but rather last versus on assets inorganic to markets come when biologic's bias, Excelsius would

Keith Pfeil

would As let answer second me the the going of I'm part -- I first. question

Second part things. look M&A we're is, from an all at to continuing perspective,

there's we be within could musculoskeletal company. out spine. our advance grew of help diversify you ago. there a acquisition to joints If that complementary think mission, did Enabling And up We're We also to couple spine a in company is years story. Tech, we technology known The as But itself. about the a Excelsius company. pieces a continuing want of

focused really buying things more business any bit appropriate on part of you it's think a little time. our question? for first that we the expand Could So in point on your at are

Operator

you are lost have move we I'm him. to and on question. It there? going go our ahead next looks Kyle, like to might still

comes next Capital. Jason Our with Loop question from Wittes

Jason Wittes

follow-up. Just a quick

FX, I you're first potentially think think I as if right you market least opportunistic, in assume you, I And the given where is recent share somewhat the it's in one and out made is? you it just think memory, there. way you repurchase, way to to disciplined to from buy were going a share the about the it? clear offset the seen that of I've that what additionally, at be in being still terms you're look at price But I

Daniel Scavilla

if as well. Jason, past, we've you year last back done this the in look

that is setting long-term the this, we're first. we stock was make the with believing moves not look. undervalued out to prior our some versus And So this just did

term, and clean felt opportunistic -- it in actually worth to you're where think right, an more. be buy some was to that of And it because off it's we way this going long the make so we

Jason Wittes

of terms then can portfolio, product on size in mass I business, is with Okay. don't at you out. about kind if I you've you're at where right for now talked sort us. of it point additionally, know And your Trauma Trauma? you know filling it of this And critical it think the Do

Daniel Scavilla

for how's distal that I past have you, markets. mini us And us. enough products out Almost, this us second meaningful directly. the the develop, the larger get with critical into that? we cusp will year enter tell right or have to there's XXXX, Honestly, some are on Really of products launches think anticipate pleased half frag part and product families how The the in femur family certainly steps will to put and we the latter flipped X I it, of significant year, compete we more I to while this at still offerings really exiting mass. of would year, believe of out

Jason Wittes

you And launch? going robotics joint how we also be putting in piece. joint stake in about a that's larger accompanying how ground we large there's that appreciate terms of launching Can assume to Or then you'd question. last implants be positioned? should when the that I thinking be the

Daniel Scavilla

right, exactly in Trauma, basic Jason. that's are need with like in We No, progress had those. we we and to done with the bag build joints

robot. it that Our those to anticipation that advance. robot, comes in the will too, implants be we timing, at out, that But not used close be offer is implants the robot with very for would in in time approved point, much to when our

Operator

with Barclays. [ph] comes question next from Misek Matt Our

Unidentified Analyst

as Technology So I imaging and go back follow have your up Enabling one robots half. the into and you on

in comment whether think I pipeline inform of QX, that are in make back to here pulled made second the sequence QX understanding any I into seems to love of think came that like how just like about quarter. the about estimates terms or all there I the some have in we thinking through it would then any QX sure QX cadence? one And was and our follow-up. should that, half you

Daniel Scavilla

Matt, thanks.

had like had felt tell we had QX we you, pipeline with I'll into when QX. we as So weaker about come QX, exited a talked we

what that's had rebuilt feel commented on I stronger like exiting team is we're feeling. you pipeline. we're What see that can good and traction, for If a QX as with had gotten I really QX. you remember, The

demand predict is so break QX, eye the is And I think and The as would hard But and than stronger high, enter nor we helpful the in out our to always certainly would as we QX. I kind say with it of was is we actually stronger, very pipeline us. quarters. on the that. were that's And

don't as in third, had exit second potential done delivered than would So say know. occur. But we quarter QX. when it would into we we we have say can't quite We when the I more the

Unidentified Analyst

of, sequential off kind same little flat up still that like place, we tempered the then that? on but in expect QX earlier see into Okay. pipeline is by being QX pause, should sequential something that is and and a way not to enough seasonality, flow? a right? But of comment that your sort the to then seasonality weakest, or just below Or as maybe past is QX deals these grow Your to seem

Daniel Scavilla

necessarily of to the human suddenly capital. of isn't vacations of is at they assumption the impact pipeline, because and that a year, the that's use right nature your end No, need

would for were think if of don't I seasonality. plan would So shift I anything you. And type there's that that, I

Unidentified Analyst

everybody the Great. color sort And QX. growth saw in question Spine, a that into mean, then around not I you saw squeaky-clean one of on which growth just

can I than love a cadences to seem across across average, differences And but any anything fair or comp. or geographic, QX the maybe given was recovery the strength to quarters your get in implants, volumes of in musculoskeletal during there perhaps? like of previous especially noticed I color think you that, give peers on of amount U.S. just regional procedures, versus mix in do that better sort or your you you

Daniel Scavilla

year. recruit skewing it it. Yes, I like the It's it is by you was that geographically or driven X go that anything We or and out that nothing factors. there with really the versus tell would reps throughout main significantly lumbar we cervical even

coming there. the That's fruits seeing in that of online so done XXXX. and had the -- you activity giving you're are XXXX acting And in fruit new that of and out one lifts

QX that, that well, come I to know, you in express rollout of part enough am the mentioned than script to pleased can't greater last that field peak achieved exceeded us. done in year. such for team it. really of gotten actually have we of year the was a it's think I testament a to hurdle the really I then placements and over. thing I into such average as a as robot that pull-through this how and related my It is and As

Operator

comes Lichtman Steve Our from next with OpCo. question

Unidentified Analyst

I installations a we've And players placements. It's the about [ph] I from space. orthopedic sales And had -- for you just in you to Can terms are what ground? that seeing follow on guys at something of a the was the CapEx in for are just question if up, on shift And in overall also seen wondering Amir robots a talk that's you Steve. appetite hospital? to around seeing

Daniel Scavilla

that which would you purchase. we Amir. Thanks, in and we've customer I It's sell, to Dan. to the had different tell always to mechanisms for date, continue

of shifted shift pressure that date. the haven't seen haven't off of to we to And We off that.

Unidentified Analyst

That as know Based also today a makes margins. just materials, sense. quick in And also the Okay. to and expansion out headwinds? you chip, any guys I are of follow-up you guys an quick also the you margin you as on help seeing XXXX? of take to follow-up gross on what seeing gross guys opportunities opportunity terms are in called for see do cost that, offset pricing to a And action

Keith Pfeil

question. It's a This is great Keith.

As a we we've always company, at gross mid-XXs margins, look we remain there. we're margin said and gross

business. get we we're mid-XXs I costs. But too are year want this with don't some a inflation into We as look XXXX. product and really some to seeing far trade

for our in take lot introductions. are you older through we at price offset the helps of into we price, But to of end see If there will. product of price, us a we're relates products. drive a lot That of new contracts to the places the it As day, customers. advantage locked decline with the

Operator

with comes Morgan Stanley. question Ranieri next Our from Drew

Andrew Ranieri

know you're Globus? what on Just more just you Are a talk but but like customers you in it as of just any selling account question wins? competitive ahead? another little EXD a out you're could existing terms you X? rolling about very talk I for maybe to take where seeing EXD, opportunity days, for piggyback looking of EXD? these it's early bit Is about that look with mean, advantage moment. might the I this pull-through And prior is an for to pricing incremental sorry off of pricing, And

Daniel Scavilla

that, I'll Drew. take

So things. going Certainly, a a both. of over units into of into first as placing time a Globus kind chance that for together, for and and through and couple competitive getting wave well, that's where is users the initial accelerate Certainly, and us to benefit will went. work them the areas

it the there ecosystem first few strategy not about. been of talking just So think concerted I of began are hospitals is a part that, that go we the the interesting hands. way. to just in to itself in people's benefit technology is we've think an procedures, then branch pull-through I The to these But And out was again, because Globus and from the designed and will customers the question to be again, many And that just not spine. spots.

a that footprint our of So when other robots going just and be time data. together. to and for and and you hopefully them to the and it with combine our have beneficial it's seamless hub better work data going be quality soon-to-be do customers It's to to flow actually way technologies, save all

sale will out, pull-through of equipment using I obviously that capital we implants. other of pieces So then do and put and these up believe generate it lining as the

Andrew Ranieri

Japan, have country expectations for set set could us But or talk our about on forward? anniversaries. maybe in you And Got you I quarter there. then it. the the help for it just Maybe that going expectations third just believe -- resets the kind of maybe level just

Daniel Scavilla

Japan. bullish Thanks. No, on I'll I'm you, tell very

fourth what of we some economy, experiencing, would to what I the one slowdown is per is make been But have the one growth we've have offerings begin that in -- and X think strategic given should neutralized of years. expect reasonable strength markets quite been But and then it be us XXXX. I market, possibly X can't that be our of quarter the I sized the over what happens through, the predict market years. working year. see over our think we planned I that top major next for to focuses of next the the a can in

Operator

JMP with Our next comes Securities. Turkaly question Dave from

David Turkaly

just had ones Enabling, if I really quick two Great. on I could.

if those mentioned in model, I our combo our terms we throw folks follow-up got maybe number? it's use it's think you some don't about the you together the could over be, to and sort would imagine platform refresh maybe out as bigger combo as sits, can And a and at moving ahead versus on of even Medtronic? be be just the but memory XX% any half, would where robot? early you peers, I there, but of of that as know there's the the and look I potential think know and would EXD you like on you X compare that just You

Daniel Scavilla

of can you. how and couple to It a refine the to what to first and all things. Dave, as would to guess very early is even more that. that model And that a get we past get probably quarter, to certainly leave out. data combo for be me going that I'm venture we too as

So It I that a but I decent to. guide those you along lines. the what just don't to is to part have of plan, fall know answer right really now, would don't out

the from to designed unit of as The you benefits intent had of seamlessly our alternative the as to opposed our I something been up technologies us have far our these together said thoughts. and with with bring remember and both by engineers, one them. from as these is it ground together software, buying as As work to patch that is start with trying

us a having for with design is sheet We for taken be not be think would out can options there, more advanced is planning but started much blank a only there and the more far much is data that up. or I think and that outcome you benefit your them the where images the technology think that currently -- I as is. loading So benefit packages are the of better than into as the competition that will better

Operator

comes Bank of question next from Our Bijou America. Craig with

Craig Bijou

have discussed U.S. guys follow-up you of core that it's some on really the sentiment on half the in Apologies you but if have back spine. a this,

a seen or a I guys rebound you've in number first has -- normally in been half the bit used expecting acceleration. what big and lower we're seeing, than what years obviously a you prior to second and an believe half you're So and

good more you internally within signs And the if what that little is market ramp you feel you're in Dan, or half? it second the in about you maybe, what just So into seeing that bit just go makes about can the confidence that a detail gives ramp?

Daniel Scavilla

such with Yes. a pandemic. look at been it's Thanks, over of past holistically, it confusion you, couple tell the the Craig. I would years,

half what So second in occurred strong if of and the somewhat then a the you QX a extreme you year. year, QX of and at strength in had spike look leveling last of

you first exiting as us look of at what of in you're we're half the the half for coming of, in comps even that out a So XXXX. and the just of was be XXXX, second probably XX-plus off percent growth wouldn't repeated

That's don't you second stronger that seeing we're have, by the our So recruiting deliveries just year. gives really into launches of given get do drives, just going see strength half to to in sales levers and with our and of why you're the by growth levels wouldn't strong I them, our from used what to a of the to Then me we us. maintaining the the have confidence maintaining couple that. would that you get the

Craig Bijou

I what you answered to through some And so this already. recovery, just just comments, have But saying. it's again, hopping around, the there's parse spine and been everyone might sorry, market procedure hard was a is follow-up,

your from guys you get Some to of bit some sluggishness, where a sit? thoughts softness, people calling out just wanted little

Daniel Scavilla

a it's of question. level a great there. there out listen, No, is And uncertainty

some We month. there's that in June come soft have record record weeks. I called weeks. was and out Then a you'll

are throughout not So the procedures country. the certainly not stabilized, fully certainly

but we're year the where of it second we I think experienced the year. in we we've get half that, as what the a monitor the through to lumpy and first move certainly half continue going with of

Operator

[Operator Instructions].

Canaccord. next Rose Our comes with Kyle from question

Kyle Rose

my button time. Hopefully, works Great. this mute

follow-up to ask continued -- it's I or that the on X just pipeline. the questions. you conversions robust to encouraging was talked sales to One wanted about see see force hiring. Just wanted

spine As business where respect more Is imaging? to it other they are side it you kind reps the What the -- from? when weighted trauma on are the coming of with is and parts seeing? of on or

Daniel Scavilla

sources. So they X I different kind different in of obviously things, them are and call

that's market are, that conversions. looked And a Trauma lot So lot having again, players of you is come. sourcing of and at if who competitive the appropriate a want see where you

There on it the where the the kind certainly it's one of comment. prorated they I other. for of if for amount over based it's sizes same those that would recruiting that given out effort. just Spine well, quarters that versus the market share. you be think almost you are with as appropriate But are map It's reps see pretty heavier type time,

Kyle Rose

something Great. don't that at And think before. then heard I you mentioned earlier least had I --

Enabling hub with product about the to Tech. talked You respect

of us. kind could you that out if flesh wonder Just for

Daniel Scavilla

year. we'll We had, just a ecosystem things finishing few there's a approved again out. earnings previous had mentioned out. navigation a And had go up we that few Well part system in we still before last of bring that that it's calls. that We're

that comes talked to it the be a right of market And solutions, Hub orthopedic, So We'll the growth the whether with we've imaging. then time. drive robotic spine subpart always and the will about be that or we again, that and that for as make look well. to can at that then bring sure

Operator

Medical's With evening. questions, us, have good no Quarter a and concludes Conference you for that Globus further joining Second Thank Call.

You may now disconnect.

Globus Medical (GMED) 5 Aug 222022 Q2 Earnings call transcript