GMED - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. Welcome to the Globus Medical First Quarter 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference 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, Crystal, us being today. thank you, for you, with Thank

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

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

call President CEO. and turn now our the I'll over to that, Scavilla, Dan With

Daniel Scavilla

support EPS flow the $X.XX, outstanding in XX% this structures products create best-in-class new offerings of launched with formidable the to $XXX and $XXX to the into common state organizations year, we product change, so Adjusted prior Globus we X million, team we which increasing the all XXXX, of systems drive solutions compete. surgeons, globally, XX% delivered and sales shares a and the first portfolios is incredible clock to quarter. QX was rolling to and challenges record a the the working drive was to overcome everyone. QX, merger. out synergies cash coming growth. These reporting reach versus Non-GAAP shape months. can integrated integration, results are quickly tremendous stage Globus push future team, our $XX Thanks, or field and in into Brian, quarter in we tirelessly markets Through growing around has free our X create number where new million. begin XXX% increase driven to steady launches as and unlock the and good EBITDA a for was with in testament million Globus afternoon, the organizations, scalable XX% for of by even set implementing NuVasive reorganizing combining that QX

We will future over cash flow adjusted and EBITDA increase and our focus on this calls. free earnings earnings per in share

with combined been real While companies years, years. growth, consistently we mid-XXs and potential operation we've that over a flow adjusted XX to and as in that free measure achieving is for have been for able consistent cash especially feel delivering strong sustained strong committed accomplish several of shareholder EBITDA the we remain value, to for profitable

rep and biologics, recruiting the performance growth by driven above-market printed prior of our across the Moving offering, notable portfolio competitive implants U.S. implant increased and QX product into XD XXX% of pull-through. cervical our gains MIS our with combined This usage screws, from offerings. quarters areas. Spine expandables, through grew business product in strength in robotic is

'XX. significantly rep has recruiting Competitive increased QX in

as once a professional seeking XX with competitive team. of most and recruit, them years Competitive in tenured point and offer over to join any great can and successful we future off reps are than a is more the and recruiting XXXX be Now start. of tenure, to history, the a choice destination record to growth. year potential our reps innovation for power a are has the rarity our to seeing

an meaningful development to new due continue continue expect launching introduce products new going to developing hit product prolific is development and processes. quarter. launches beginning improved R&D development combined pipeline, we its products, stride product with forward and collaboration our front, launching the from this The product to to team new in and internal execute we X pace at On accelerated GMED products

want these you. recent with share to meaningful I launches

initial market. preparation are The tissue into products VERZA hard tools represent the and our entries power DuraPro tool that power and soft first systems for

systems Beyond tools entering offerings imaging orthopedic as spine, these implant best-in-class surgery. proceduralize to we innovative solutions, cranial musculoskeletal navigation, new robotic and market, biomaterial enabling interoperative seek and X a greatly our complement comprehensive

DuraPro navigation changer oscillating using neurovascular removal The easily disc while around a to drill safe ExcelsiusGPS. structures. tips robotic bone soft being with drill while is upon The and oscillating a subchondral an providing reaching our removal to and removal, for allowing uses or open them cuts system approach MIS game and tissue bone cartilage optional sensation surgeons, fast to perform through disc disc system technology easy tactile The enable harmless anatomy bone.

a has eager are removal robotic to birth in and coming over look RPMs. applications and distribution The using are burring styles drills excellent, for weeks. VERZA, offer the coming well, seen including for gone first rollout designed XX,XXX up we foot to various been system and controlled drilling, joint clinical have months. forward arthroplasty Feedback used ExcelsiusGPS to the trauma. ramping start and speeds up and The orthopedics this interchangeable spine of navigation and power on cases surgeons We our extremely tissues using full are controlled drills in have high-speed heart technology it. at

profile as was usability well platform for perfectly as extremely to the allows by Spine, is limited of with In XD technology as angle the system cobb most to access spine reducer and cases complex reducer of Reline complex actual and reduce and QX in that even for rotation for spinal the latest is X-dimensional anatomical ideal load deformity cognitive efficiency It significant Reline for constraints. augments the our the cases. is evolution where the launched screws complex versatile complex correction, low spine. The control designed in

screws. reducing lateral to variety ] introduced easy interbody for February, situ of a approach. a anchors, a migration system [ stability coupling versatile compatibility of and of the used facilitating spacers spacers, construct and significantly stand-alone attachment with creating spacer repeatable bone risk spacers plate range bone offers of rigid X with surgical a expandable static system when screws enhance to It construct bone interbody and The allows ADIRA a in provides promote placement. and in interbody

to procedure ability single by insert the the construct instrument as plate number Additionally, a spacer the streamlines passes. reducing the of

distal out ANTHEM portfolio. great the is with plate more options and the and side, fitting, strong radius It On system we plates introduction. streamlined trauma improving receiving our clinical existing risk and a volar launched rounding additional plating had since has offering the feedback of start

to it wrist the expect portfolio. of plate fixation be fracture our flagship We

technology, have up since and enabling seen prior we XX% sales million, This QX were our and driven launch, year. robotic accounts, Robotic we prior XX,XXX later In procedures exceeding since versus which $XX believe in positive not performed year, robotic yet was highest tailwind will the NuVasive year versus sales. effects this imaging XX% by system accelerate, procedures and growing launch. of continue to higher be

growth constant basis and we these sales in to In year. regions international we through record delivered QX XXXX, currency growing business business above-market on investment implant XXX% spinal compared international and achieved increased in consistent prior for have people, and Our a our result. products a as our XXXX sets,

and product We have a feel harness fully of this offerings moving significant NuVasive the internationally tailwind and Globus to yet the will combined be power forward.

continued and X penetration of these combined performance and by now. combination with a our market-changing XXX% the delivered trauma of broad growth fast NuVasive for our business combined QX, specialty base trauma NSO market of X The is strengths merger, product innovation. range businesses driven of the of The of uptake offering growth and orthopedic the strong the business,

January, our implemented teams opportunities support cross-training field the sales We're to can tech U.S. the enabling increase their they product into so sales to worldwide. surgeons. and their offerings and with we on in investing integration Moving experience surgeons in team hands international structure status and realigned growth

In post-implementation X want system quickly daily in addition, platform. team our the work working speed any the a to new U.S. levels. in areas that implementing well, as operating require systems, we Like and enhance our in-house who and areas but as towards and the especially record structure improve groups are processes, and to out this pushed continue us steady this team. Memphis support dedication implemented quickly to their X out field operating allowing call and company productivity. debugging, system quarter, to common I want state pushing new for to we system future areas shipments only I team rolled to the not implementation, and there our thank their

existing our increases are offer demand long is made to preparation we support enabling portfolio cross-train investments newly for key products root lead more beginning to time components product sets as to formed In higher surgeons XXXX, these take share their teams in and treating significant ready and patients. for and Cross-selling options in in tech areas.

leading standard clinical advanced industry. procedure, the is market to work CT an across spacer development, the remain surgeon that needs. key the and lateral surgeries and the developing pioneering history partners gold working of with intraoperative now thought of we proceduralization standard rich surgery, product the forward leader our create rapid imaging, most all of XLIF in technology we the unmet to as robot best surgical to expandable address In carry spine the industry of we're the final care development create spine to From

last on robotics. this, and enabling have the intellectual to continue spinal of and ongoing for strong further especially to the continuing existing spine are and committed be To arenas tech navigation expanding property forefront #X on we'll presence in we tech we Coast projects, decade, industry has at this imaging, and lead, the enabling a PD focused in remain been the to committed solutions. West accomplish as portfolio Our we

as combination have our our of with portfolio R&D and IP leading revamp innovator process. development the a NUVA believe I never stronger and people, been GMED long-term our prospects the

our how we and in engagement enhancing with impact We're programs further business. our our strengthen increase surgeons of all aspects with interact to them surgeon

scientific added with been all professional affairs, we've individuals. and marketing affairs expanded, has team talented team communications and Our

In and our clinical of presence expanding institutions. addition, and and teaching research investments the in education coordination we're increasing our enhancing programs

expanding the Operations begun of center our in-house the part distribution the as Memphis system and ongoing role of is strength Carrollton on The capabilities overall synergies. We've remains now the its in West common of merger. increasing facility our business. production

third-party vendors enabling equipment invest manufacturing our also and instrumentation We implant, cost We're accelerate high-tech volumes for with times to will working capabilities. continue in consolidate to production and savings. delivery orders to drive and tech

All are as progressing of activities these planned.

first out-of-pocket state see benefits, you XXXX. reach As match to been can from being future by have prioritized investments focusing are and steady implemented identified the spending plans. and synergies organizational have on In-house growth to realize and structures midyear quarter begun should actions results,

been employees sustained of focused resources merger have payback the been future for is potential to by While up the We the our or cuts. impacted believe Globus greater. has on support deep long-term markets. harness building shape I driven It's employee us an never some and to remain by reorganization, profitable our not growth. spending the and merger to organization

at we this. realize have everything our need fingertips to We

pathway incredible thank team QX the worldwide technology an becoming delivering to the the to dedication for preeminent world. in and the Globus want I and musculoskeletal furthering your company support

the I will call over to turn Keith. now

Keith Pfeil

good and everyone. Dan, Thanks, afternoon,

Our expectations. earnings exceeding both with strong and a results start sales XXXX, fiscal to first point growth, quarter in

integration alignment, and and objectives, team namely remains synergy sales and Our against capture. process retention focused key on was standardization executing

comments for will performance X, to X, and X, and the of as QX comment synergy this focus integration I on updates my XXXX. remainder afternoon results; XXXX on insights on goals; provide our

our QX attention turning Now to results.

per quarter The loss first revenue on over growing was resulting $X.XX $X.X net a a million, on quarter. QX was of the Our GAAP basis year XXX.X% XXX.X% loss as-reported constant $XXX.X an share. million, GAAP basis prior and in currency

impacted in-process merger-related charges research development and by first expense. results quarter costs, Our as as well were restructuring

of Our $X.XX profit. net on non-GAAP earnings when which $XX.X was QX $X.XX gross comment drove a QX per I provide update $X.XX I of my non-GAAP non-GAAP onetime EPS further favorable million, on share. noncash XXXX will income includes which diluted The adjustment,

non-GAAP quarter XX.X%, non-GAAP while income first EPS grew XX.X%. by Our net grew

synergies, grew partially volume and the NuVasive by approximately Excluding the impact cost inclusion results of worth EPS drivers onetime The prior share quarter. non-GAAP of to primary million, offset lower-than-planned higher the realization $X.X of increases, are with sales count. growth compared core by XX% coupled the dissynergies, year sales a

compared the was QX shares XXX.X our year illustrate, count shares To XXXX million million quarter. prior in to share XXX.X

were cash $XX.X was was or NuVasive million. growth and U.S. the year million the driven the quarter quarter, assuming as quarter a musculoskeletal sales from adjusted in XXX.X% first grew the spine the quarter versus forma basis, Musculoskeletal contributions flow free trauma by EBITDA sales prior our Our the and forma -- international was primarily our in XX.X% prior period first NuVasive pro On from $XXX.X XXXX primarily businesses of prior X.X% totaled year Pro merger. prior year. products. driven of well as versus results, higher

prior and driven by first versus quarter our XX.X% Our sales sales system. totaled technology year quarter, the EXD $XX enabling million, ExcelsiusGPS of growing primarily increased

A the development further of set and vast was the up legacy believe entered QX. into close quarter We The and transactions cross-selling into XXXX future majority push more pipeline so saw EGPS as customers strong and a activity purchases. norms coming for being of with to outright us as QX the beyond. The of first remains we further will we was pipeline. into QX this NuVasive driving quarter focus return success historical

grew were growing First U.S. International as basis, $XXX.X in growing Trauma the forma totaled sales On technologies. in sales reported. pro enabling XXX.X% XXXX, growth and million a XXX.X% $XXX.X quarter reported. led U.S. first million, Spine, of by as quarter U.S. sales X.X%,

Ireland, revenue Germany, spinal in basis, and Spain, forma Looking Poland. including at Belgium, focus X.X%, led on Arabia growth Italy, international countries, pro Saudi sales by grew implant key a

GAAP gross namely amortization. compared prior merger, year the first the quarter. NuVasive profit Consistent to in prior with is largely gross in year, quarter in XX.X% with was XX.X% the step-up the the decrease profit associated

to impacts NuVasive amortization, by adjusted is acquired step-up to useful merger. $X.X EPS profit adjusted a period relates the adjustment was worth approximately the a million, depreciation accounting by purchase non-GAAP favorable Excluding gross $X.XX noncash assets the onetime adjustment of expense adjusted XX%. profit This in gross gross profit of impacting of measurement X.X%. and lives through Included

our by impact, Excluding driven NuVasive in this year which the been profit the synergy will adjusted prior of versus later discuss decline prepared actions, in onetime consolidated quarter inclusion in by XX.X%. gross I gross would results, profit offset have cost The is my adjusted remarks. partially

year to QX XXs earnings comments we the call, expect full adjusted rate XXXX. mid- gross in the my with profit our still upper full for Consistent during be to year

the the quarter a X.X% of million for $XX.X were or expenses development sales, of development. and Research acquisition research million which $XX.X includes charge to and related in-process

innovation, the cost in prior in expenses the inclusion compared million NuVasive sales spending partially Excluding research development increase driven R&D new this focused R&D been IP IP X.X% the million a in acquisition technology charge, in objectives. taken again quarter. internal go quarter. the of out would business in commitment $XX.X and forward, seeking to our year mission the actions is or applaud our and achieving for The have to of during teams offset The or our We X.X% to aligns sales the merger which driving market. our while by of integration on quarter remains testament results, its of by is and the during quarter with $XX.X synergy

of full expect still to consistent year, with the be R&D in range prior comments. we X%, to the X.X% For expense

million XXXX taken. of increase impacts quarter were cost XX.X% the $XXX.X by with the XX% to sales in of expenses first being the offset or NuVasive or SG&A compared partially driven sales the merger, $XXX.X actions of by million of

XXXX X that Our to points SG&A SG&A will is improve full for expense. continued expenses expectation year XXXX percentage over X

restructuring The the and quarter facility X in million incurred as costs incurred during workforce XXXX reductions the to primarily charges of to costs. quarter. GAAP compared quarter year termination as non-GAAP first the in million prior totaled $X lease and totaled restructuring $XX.X relate well costs

decreased is interest close as lower well note. expense as at quarter. year paydown of $X.X line income by the the the compared was merger first during balance, million a interest result a of prior the cash income quarter senior credit in $X.X interest former the The Net NuVasive driven of convertible from interest of million expense to net

items, totaled during GAAP GAAP loss QX former the XXXX the was to with FX reduced merger. prior quarter. to discrete XX.X% pretax well prior versus as in XX.X% associated the quarter. of year tax deal loss acquisition-related driven the prior a million million of tax combination quarter R&D The as rate rate lower during acquisition for year relates was impact $XX.X a The IP compared by this predominantly quarter profits the the to a FX $XX.X the NuVasive noncash for quarter.

our look be for we approximately expect further into XXXX. full to As XX% year we rate the tax the year, non-GAAP

to cash liquidity. and over Moving

Our were of convertible against our March line million notes $XXX.X long-term in cash, senior our cash not short-term XX, due the equivalents and of any XXXX. marketable credit We and at have borrowings securities only XXXX. consists did X.XXX% debt

for to March be are intent used Our XXXX. they due be until capital remains structure in the part of settled to our notes

QX free net operating $XX.X provided $XX.X million was by million. cash and flow was activities cash

We in result as accounts We and delay, U.S. resulting be which second cash driven this flow impact operating of accounts the systems working as higher our as and quarters expect integration a receivable. note first a reflected to the impact higher will a temporary a receivable go-live. and temporary by investment capital balances

a We have concerns and view go-live impact. temporary regarding no systems collectibility this as

this X.X% $XX.X during revenue. quarter of or million expenditures Capital were

X% will range of be to in year full of sales. the Our that expectation remains X% CapEx

result million context, to shares X.X with our on $XX.X stock. of merger put approximately have demonstrates of repurchase the approximately X, competition. shares common $XXX.X the these closed X.X NuVasive ourselves equates Class quarter, from million the drive we this separating approximately this stock. merger. a spent to dilution million Since X in created deal companies into continued bringing belief September together and our A stock-for-stock the to To During first successful to repurchase the of spent repurchase of This our conviction million share in as a outcome XX% this we further great

remaining million $XXX.X program. have We repurchase our share authorized on

in discretionary favorably in our million will that or approximately attention to of $XXX figure synergies. actions, during during result achievement the efficiencies, gross and reaffirm actions namely renegotiations facility and expected well upon to are within remaining and as impact will chain cost progress have result implementation predominantly of when combined spending pro integration margins OpEx and Turning and our million contract of on total of as compared our synergies. acted third-party legacy in will synergies headcount spending made driving around and rollout of Operationally, forma expenses supply consulting Significant $XX consolidations. in through XXXX the We million again organizations. systems revised achieved reduction achieving realizing spending be $XX consolidation the million primarily commitment are The and which was quarter XXXX. fully the XX% $XX policies, a cost reductions, through to fiscal

enhanced prevent production a legacy both potential disruptions manufacturing expand also creating NuVasive to all due next attention of to examination This will drive achieved about products will cost cross-training our are of through at turning driving we manufacturing an and and efficiencies steps, to be think facilities locations. chain processes, to now cross-training. renegotiations manufacturing of and manufacturing we this our material supply stronger This reductions. material future Globus As while cost insourcing, legacy

P&L later to and XXXX savings actions taken expect will which in in XXXX XXXX. XXXX, We drive be and

like to performance the our of some remainder for make I'd comments year. brief the Lastly, on

are to EPS billion, sales previously the be result quarter expect growing the XXXX to and a of billion per first our diluted and continued net range range now our provided to $X.XX fully non-GAAP of We in of share. our confidence, $X.XX guidance. be strong $X.XX $X.XXX to in we updating As

forma sales pro revised to guidance net implies X.X% Our totaling XXXX billion. X.X% revenues, $X.XXX growth over

XX.X% year impact in appropriately the confidence remain EPS non-GAAP into As increases $XXX commented non-GAAP the dissynergy merger. our result on as EPS last conservative develop. revised our we of the projections XXXX, guidance move further quarter, million further as level includes $X.XX. potential growth see implies of EPS over Though our revenue the guidance to revenue a prior The XX.X% of the year we we a

Our the approximately XXX revised estimate shares for year. guidance full includes million of an

closing will brief. My be comments

and while our are only merger products, to QX of expanding with on and the leave not quarter thrilled steadfast driving our you both our achieving achieve product our market force, new are against driving and We driving achievements Dan I the strong expansion with performance in confident integration, on first penetration execution, year. commitment should commitments our also extremely commentary our further to and launches, but musculoskeletal our touched mission. for delivering the into continually further sales Excelsius on

the while done and of strong of cash maintaining in responsible consistent All Globus a with will be profits driving a manner, this financially history balance flow sheet. strong free

to their our you for as the becoming the this driving we QX in entire Thank of mission progress achieve tremendous team efforts continue company. tireless Globus to musculoskeletal preeminent

now we'll the for questions. open Operator, call

Operator

comes the [Operator line Instructions] Blackman question Matt of of Our from first Stifel.

Mathew Blackman

lower the first to Keith, number. heard dissynergies million think, qualitatively original dissynergies should you follow-up. any talked lower that in and just through we than I take $XXX by million way the you that Just dissynergy dissynergy lower saw, $XX to that being you a help sort then of you that number, But of as maybe curious, you fact and reflection the number. magnitude expected? say bumped the then about in quarter us a didn't think guidance I I'm number that you

Keith Pfeil

did up would were pick first on revenue $XXX that's out quarter. But out I called what quarter, we year it's last level we say full And set, of And we this a really with great because wanted So question. to the commented guidance. your point, million pleased performance. to the coming we we

I are to we're locus more the further feeling, year, still really get earlier. The some into it back we applying we goes but confident said conservatism. So the what appropriate

Daniel Scavilla

the would performance because I build throughout Matt, what to it the And that of raising on is business. we're

bit raise was called of a million of all the business the little While primarily strength but reflects Spine U.S. and international, here. that our that throughout we out, $XXX

Keith Pfeil

QX, material, other raise QX. that say, other situation would that thing finish that remain and update way. important as we the time talk believe haven't would going on reductions I any last we the anything you We to think about the we what us together an seen that, you I And as got is cause positive was confident or like would rep that to the and give

Mathew Blackman

That's guess color. first really helpful. robot? implants And you not appreciate is on all after I did maybe of for the I getting is, second the cross-selling I evasive the opportunities half the the or the getting year. follow-up, in that Excelsius mention on contingent the still part guess, that approvals so

frame It And like then like mean could think opportunity of I set? side a think perhaps opportunity question really you of NUVA a way or unique it robot. how we've year -- you your about from for cross-selling into we seems guess opportunity the work. may could other of have is, distinctly don't big Just some NuVasive that number selling us set a very done that potential robot next? the But competitors be some later accounts into this I accounts. any do on also that the coming seems the

Daniel Scavilla

Dan. it's Matt,

did would and base. customer our So listen, rapidly we whole we force the about when talked premise of the fact was merger that our one the that we grow sales

usual our through done we've what accelerating significantly recruiting. fact, competitive In

moves the We're I in to are as made with guided but and implants enabling year. through We've forward and that for up these the to this have working us bag know technology reps second with technology. help for we're the not are existing the hands-on So the half this us products, familiar accounts actually already and And of Globus new to half a and making in, best comments, only in was open the intent robot. onto build for should further appropriate those as instruments my our leap for bring that, ready that with Reline that mentioned year. of the very trained of sure second accelerate to with

Operator

of RBC. the comes question Shagun from of line Singh next Our

Kendall Au

I on players, coming Kendall market share spine for on competitive compete Shagun. ability and have is potentially into nice the as on system implant been X How these a the new to do of you last This robots position market done a the know market? Congrats And major quick I the the X companies larger defend have robots X upcoming quarter. market. there's to coming spine client their from them dynamics has do and in robot? in years. expect better several against to think your of you especially over a the share new market question what

Daniel Scavilla

like the merger relatively stay set poised the we're up. a we've that tough on we that through have fact stay and a we into the that that Ken, and would or for That's recognized focused with best tell going have the technology. competition we're always to velocity. our X new the you has remain we drive on through. I feel continue focus penetration increase answer belief market We're would heavy in it's a more and team sales that someday to to in this we course the do focused going come. to to very with pathway to deterrent low best come We've enabling in actually do a technology get get total. We're the And have But and the ability our best may hands. not surgeon's and investments, cadence our and to someday on anything. change the us in

Keith Pfeil

an robot. more line would our from importantly, feel the thing about positioned think best-in-class to compete a still investing we perspective. well here I thing But because to implant that is extremely have the And is, in we here think we're that only to product I add we're still

with to some R&D. because we to companies as we're product that together bring the market coming market, reasons drive some So still to about core believe to the that innovation think gets the invest innovation. back we And we're with and to really these in wanted moving forward coming we're working our to of portfolio implants continuing we robots, business and

Daniel Scavilla

tools, up power to me as is I'm enabling game differentiation just that, changer to create X coupled that thing and when to add DuraPro that's just and going you going we're too, our existing type further heard VERZA technology, what with going offer. announce significant to a throughout the

Kendall Au

you just And quick on X Or have have have seen in you especially follow-up. of of then capital you sales? you I more what upfront QX, have parts couple the seeing seen are a seeing environment early from in questions more also the leases What about I side? that are QX? spending And

Daniel Scavilla

So the for question. thanks

environment So the capital remains robust.

we commented QX of QX. really starting that saw former that into I where we the we the during quarter I Our invasive close the not return and majority that we're in did, we a to on felt QX of quarter, strong, into the customer. was purchases. coming out QX pipeline did same And only during of our vast to also deals the of together normalcy of quarter, really on coming more out pipeline fact the sales bring were commented the first the outright way

Operator

Our the Jefferies. next from question of Matt comes line of Taylor

Matthew Taylor

there you that to anything strong guidance QX, else And I why the just that raise you the is Or conservatism? the on I by as is guess, ask much beat raise you're didn't in considering there? top line. wanted about that as had

Keith Pfeil

extremely as it quarter. nothing that the enthusiasm leads is This look said I earlier, say closed thrilled it's it's as mean, question. year, But me where we look to the We're I now, first like would the for shouldn't believe right I I But -- came quarter Keith. my still into the ahead. we out change Thanks that of conservatism. with still we early. there's landed. just Yes, we

Daniel Scavilla

but results not here at our first no a And putting would signal we're raise Matt, do if sending belief the tell look I us our to matter we what on as by this you usually are, out. you, quarter historically,

Matthew Taylor

follow-up. a just And

could this for be mentioned to year You which see and surprise how just Maybe may a that's some record matriculate. we would hiring, people. start about that evolving when talk

Daniel Scavilla

things. interest And would of I out and great norm at as we know a be goes proactively. than type well a of different lot have team is the with coming that who you've again, any don't if out seeks it those us got

contractual the be and stronger follow in in the is the the that that recruits I'm these onboarded out would get the adhere X current portfolio tell sure The see first what in I we a than second And and we're that this signaling into that lift a recent year year next would be saying properly, in active you year. believe onboarded the we've not then year amount. that you seeing is I make third it's going And record. anything, so would course. remember precursor quarter in to a like history. the think from all And is kind you what and that would we I to The half of a folks in you level a reveal you of stronger year. fact to can obligations. of second strong usually they

Operator

from Our next question the comes Zimmerman line of Ryan BTIG. of

Ryan Zimmerman

there gross see. was Congrats. Nice bit your with start to little in vendors, for said margins. How margins, said to consolidating just mistaken. language, there. And guys really about XXs, now long kind about take the kind enhancing of It sequentially last does quarter, a of me like margins. for talk know through? you think high That's around I'm XX% you see XX% to behind to manufacturing. this really Keith, gross And guidance benefits. I Keith. actually, not work a you kind about we scenes, guidance some if I want But talked proven those improving to to benefit do of are you gross onetime looks you I doubters. When

So gross kind and this for move as want the we year specifically understand into to 'XX. thinking margin your just around of cadence

Keith Pfeil

Thanks, was great question. Ryan. a It

nature. gross quickly messaging is is that the perspective, XXs as U.S. freight, off for But knock from we that I around out -- what getting a where renegotiating consistent the that to things quarter. high the done, for standardization chain and communicated things driving going system last quarter and supply you we're for year warehousing my of margins at, contracts with look kind to mid- So the was things about impact on think of

renegotiation bit contract expand a to little The longer. takes in-sourcing and manufacturing

into the you you Those of to have of you machines drive machinery additional buying We've online, equipment. -- puts actions delivered, have put to drive to do have half year. one get bringing that that. So to the taken that and get things or first second is the

QX well producing QX, and and as QX as get next going into you as to QX You're year. start

that terms into going you're So pushes date. That's you're the actions XXXX taking it inventory going been the see first that you're XXXX. the P&L. until not very through you But going to to in-sourcing, you're we've But in and of P&L actions through show are get to basically not the with see to you're going that is where had aggressive of why step up. to until that that I see comments roll

I really earlier about in also some just focusing commented spending. statements on of my

help of lot think improve out spending really I X to kind costs to until is us doesn't the about of more things around the big legacy year. what savings getting the all of are occur see in that we and things of I Those are sweating As are One to really to call expect approach us would next approach, commonized there. everyone really a that but get that the going margin into gross to Globus

Ryan Zimmerman

then, was was the like maybe This to power Excelsius margin AA&S, Hub, core at the tools, I bit away feels spine X nice the I an for of the Dan, on see. extension to of more it a from you. some And some neurosurgery. got into little

way And if the imaging of not to downplay and and your view of spine. away with business you're outward thoughts I does kind had trauma core would our the pushing you understand and of business, it longer-term past your the feel appreciate go to of -- on spine vision. the kind from kind in but almost where have pushes curious guys and just combined You want

Daniel Scavilla

and Look, recognize company, technology Ryan. predominantly that can into do. things we we'll become we spine These being out that meaning X go continue with thing always and what applications. said those musculoskeletal lose have spine, they never is look also areas. we'll to be all to of we've we we We Thanks, focus to going say always other a will all enhance but spine, while

applicable as So those in And things doing solutions even within to they're applications creating that cranial, end hub the the and we're the and or again, think refer mind of orthopedics, even that and the help power core all to to at in the I itself, areas. things that trauma, the you driving we other the -- those is to different fact lot. do. can even help capital But day, spine also a spine, the again, ASCs about the if standardizing in you procedural that keep that tools

than technology So I trying that's would move tell and anything borders But opportunities beyond this all have we're with spine in. not from other you, doing. great take away what to we're we're or we those to signal

Operator

next question Oppenheimer of Steve line comes Lichtman from Our Company. of the &

Steven Lichtman

as that much Spine I U.S. forma guess the pro would look itself? first first peg low how number, at the the we in look you at in quarter business, as of question, sort dissynergies of you single-digit sort through

Daniel Scavilla

something to through whole and give going for a particular. tell area growth so certainty tease in different with for where it's lot we've are end of just good mean, the there's it. could overall. Steve, with have actually you to At honestly number team We everywhere, you or mean, probably the I here's things I that. it that know I'll put of kind would I always really areas would disclose and the a on don't I we're that. what not be is. give the U.S. take looking I I what But say, tough you day, won't

do new number I this. And new new of I a procedures folks, with really created But we're say with new impact. distraction a so with have with from could And what certainty, new don't that a really dissynergy driven that's think level what's you've there's with team when with a products, a system. here's I to looking

Steven Lichtman

just your and then cash -- the towards follow-up EBITDA more a comment about And flow. dialogue from free adjusted on EPS shifting from and

comments free in On appreciate, Keith free on over term, your about cash absolute on flow expectations level whether the cash conversion this talking first year basis? dollar an set and flow can the your medium AR us half. then basis a about what or you latter, I on for the are

Keith Pfeil

Yes.

So of -- that off. this we look 'XX, generated, say the first for I or we free way take, want I cash. I thanks identified over think synergies. The about $XXX at of at term longer to fiscal give million million to way question, I the also look the $XXX is If think

really to put yourself that that's see kind contribute term. numbers kind you of over EPS. the going driving of focus Near on going cash X So to savings the is term, are you long those together, where

the again about think I synergies commented I things would realized So look year of and some on to at we related that this last the year. that

Operator

Chopra Our next question Fargo. comes line Vik Wells from the of of

Unknown Analyst

This the the Maybe side. is robots. starting I Vik. on on robotics update I for on on quarter. Simran Recon think heard Congrats off a great latest a just don't

latest what there? lines time So the are

Daniel Scavilla

great We with asking. for FDA. a filed question. recon the That's actually Thanks robotics the

approval. ready getting inventory, waiting we're so roll it where a doing to stage What now waiting at we're And building we're we're while out. approvals, we're

don't is really of part could the later half the waiting beyond My of third would give you. be an the again, probably quarter the But towards FDA. that thought have year, So always the exact I I for. the looking for we're we're remains, power date what second tools.

most things think this out year. the we'll the get So I door one of exciting

Unknown Analyst

That's business Enabling great. think should thinking Very your how just about And seasonality growth maybe helpful color. And across you about we in XXXX? how that are in Technologies business?

Daniel Scavilla

mean to really QX drivers, I the seasonality I expect bringing business change. going from a We that about the the have is the coming. still drive robot, to that and portfolio convert think NuVasive Excelsius expect you products the think EXD, growth growth the I going portfolio, pipeline when fold. consistent into but with mean, the EGPS you NUVA then I perspective, -- new key and be our be and of into have would the some QX of you growth mean, the doesn't forward. legacy the to customers business you

business. the the overall grow So rate you'd than positive. terms long-term know of it for to a at that higher very cadence in business should expect growth I be

Operator

comes the question of line America next of Craig Bank Securities. from Our Instructions] Bijou of [Operator

Craig Bijou

number maybe that to or comfortable you to wanted I understand Keith comments than integration Dan, going on your taking more just better trying when may So feel start the either And down guys with expected. the you're force. disruption ] -- moved of or past going sales potential areas the not to you've million some the that see integration that essentially kind $XXX of of with [ or

Daniel Scavilla

comfortable. to Craig, really get But and my you'll same I We're see think way I the the the December you don't would for the But XX. us would we first you are tell get happy through going first we quarter. quarter. again, cadence we're know. thought feel what for more just as second is, I going, get was again, where think with

to personally think trying So the I that responsible deep through I is will we would sure third be make that we're to shareholders personally, better. and phases. into quarter the when get But feel these

Keith Pfeil

And agree with I Dan. would

we as I third through so feel As get far we positive where the we're year, quarter. quarter. at would entering the through probably we remain the second most with here comfortable get

Craig Bijou

guys of by you helpful. may adoption don't on more one you're hospitals. and deeper in you've that by typically the ever revenue, and anything acquisitions QX. are kind Got as seeing had, the the a highest that little the of Spine? surgeons that's very pretty it. revenue quarters know little a That's what have And talked some little driving tech, I bit -- about robotic that more a follow-up, seeing see of on the good, kind ground but robotics you I you capital bit a be And bit Are drivers? of it, good the obviously, mean -- using is enabling technology pushing within --

Keith Pfeil

customer the deals has was The now a capital pipeline NuVasive only customers. as pipeline bringing one was Globus the I sales saw in force Excelsius, couple mean quarters, legacy not legacy NUVA strong. EXD. lot There's just consistently about but think those is the we when forward, we of active last interest. new haven't their the would to say very the still is closed remained the that even stand-alone were things yes. accounts, we on pipeline. strong, The the I and adding Globus, you're And yet for of as -- of in the but the look also we is pipeline answer to

of So the ahead, couple lot of in in positivity next business grow having we quarters. a look see as we that

Daniel Scavilla

these that I it's add think curve. proven. I at curve, past technologies just point, are Craig, market has And moved And adoption its would you've the gone this the through adopters early

that And actually they is to more bring it for willingness something so a there well surgeons hospitals to the feel as as in this patients. as use benefit is to

So for use along I curve it. think people to that that moving maturity willing we're

Operator

next Our of Canaccord from comes Genuity. question line the of Caitlin Cronin

Caitlin Cronin

on great quarter. a Congrats

you to color Any begun plans about as off, lines start for well. to redundant Just What product product well. vein and PULSE? and as think ] this and towards about kind have updated in team any that enabling updated discontinuing tech of the [

Daniel Scavilla

for Caitlin, question. the thanks

drive prescribe pieces. that rationalization. to X a use. into think feel I'm offer we direction don't surgeons And No, time, it we've I to stated can like out to take follow. openly position everything not what we'll product to We're certain a customers going SKU will we customers. So they products proactively to going migrate in I or over are will that

think I for need stay focused they we goods. to have on their own what

can we is different Enabling path look always no has which that So that the rationalizations. are, piece will we continue planned on over time, tech purposes at.

at would to out don't have feel or or we're anything we obsolete like So state again, given today pull this going time. that replace we we

don't And we're looking think help plans. a I it fine-tuning build there some We've long for it are this driver market. strategies, enabling lot a the think a it be can of good feeling to for of some there's us penetrate growth great these a We're technology but we're we have as a made applications things capabilities major forward. our further that I into and we that that think PULSE clear will in of further place that us, term. it offerings globally going I use it integrate now. has going forward. step There's

Caitlin Cronin

for then augmented the timing updates And Awesome. reality just a quick on Any headsets. one. the

Daniel Scavilla

year. one but We through. We're would now That's get queue of I still the our approved about to to through get and do good need back processes. it's we that right to in it, feel filed it. say ready half where just

Operator

line question comes next Matthew of from of Piper the Sandler. O'Brien Our

Unknown Analyst

on for on great Phil is Matt. This the Congrats quarter.

the picture. for the clarification And Does Just million. the on bigger number starters just I point. guess of One EBITDA and margin. onetime EBITDA ] quick adjustment $X.X X.XXX include [

goes. post on that mid-XXs in margin said year be as X back as far You in closing, the EBITDA you'd the of the kind past

guess, of to expecting XX%. even just a that you're So get it over the leverage X years I to next, lot

confidence EBITDA in just to So the back mid-XXs talk that getting margin. about

Keith Pfeil

understand I the of your want to part make understood sure I I question. first --

the $X.X that included excluded? million, was You said or

Unknown Analyst

Yes, EBITDA. in the

Keith Pfeil

be not EBITDA. was That expense, of Yes. depreciation that part would so

that So for adjusted results EBITDA in not be EBITDA. the or would

As we longer believe about can mid-XXs, absolutely get back that we term back mid-XXs. think we getting to to

to cost transition of as to But and is, single-digit combined a as ahead, cost to that together business intent to get year growth back as Dan to of standpoint range. leverage the from you're is You're additional high the mid-XXs cost back occur synergies expect savings sales see you on to driving help the you mean bit the our as goal the this top going bringing with a stated will forces into the of that drive growth. look drive leverage I sales get organization, still earlier, you And disruption. drive a the forward. here, going little

Daniel Scavilla

into pretty add script with these and to we're that everywhere answers, I our we need investing it. through just to What we're reality. bring our I'll feel saying invest good this. through Phil, And Yes. to

capabilities or and And want activities confident even Everything feel get multiple path. the the of that we levers have it's where think would or have really third-party of in some services manufacturing whether Keith the I to machines We ranges play our laser to of on I us is that in-house of instrumentation. into some up we doing or our us both this, take for path be. renegotiations

Unknown Analyst

my That's helpful. And I question. last guess just

to opportunistic the given is price how where that or curious take pertains to ongoing? stock in to it M&A, past. which more called your get stock at that tuck-in if ability in impacts more priority out your And quarter, the then a was As do the any you've purchases as

Daniel Scavilla

that going I'm too. answer Yes, one, to

of is the future. even bit of answer in take stock, taking more a absolutely back remove an feel that we undervalued advantage earnings to forward we some and we dilution and So share both. power the the per go and is what we're as we're little created, going add of But

overdone of so think that that over cash term. has the strongest one benefit things can I of doing we a here that's from long that actually we we're the to it is using flow take think strong something advantage been

Keith Pfeil

it And acquisitions, still now, profits. at do the as go balance, where balance tuck-in cash. not business relates a by to really as look generating sheet business on I tuck-ins. the cash right large We're ahead, we generating is is strong And as we're we're our look at sitting to limited

to credit we should want of untapped We anything. have do line plus ample cash on have hand an we

I that see moving look don't tuck-ins us So limiting ahead. as at we

Operator

Our next Truist of question comes line Securities. the Richard Newitter of from

Unknown Analyst

is for in This ] Ravi [ Misra Rich.

that for Could on So and around picture you had a the I things say help new approval. questions coming impact of you about both should you're Excelsius, you with market. kind around this margin years -- maybe and gross could on now of inventory have robot of new How post begin of paint future the heard I seeing that's potential I had contemplating that maybe accounts placements? you're to accounts future sales approval? in versus go can current what guess the utilization And the robot, to ahead for terms build right then a I kind believe where few once robot, now think we

Daniel Scavilla

answer that. So Ravi, I'll

latter marketplace coming to us with allow that part is more different volume ramp-up our will Again, of knees robot that be start the is let's have So and implants the of hips. out. ortho what of in think will I a that

forward. there'll And way see that going degradation any as significant overall on pressure-wise benefit the a I to of there that we're those type coming be business we along lines. look so it where think don't that at I

that you part strength it's even usage, robot, and If different different first several X Spine at build not to and more or sites, growing some robots have we've are X they they this where need utilization than point of but the that for with get different the integrate and seen or in this obviously, it back your enough sites multiple what and is get accounts usage X just there in a or But in X really needs. growing X Excelsius cases.

and sites we at buying that really usage a activity seeing So lot are point. multiple robots are this of of high

Operator

This Thank does earnings the call. for conclude today's conference, Globus Medical you participating.

You disconnect. may now

Globus Medical (GMED) 7 May 242024 Q1 Earnings call transcript