GMED - Earnings call transcript Q2 2024

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Operator

Welcome to Globus Medical's Second Quarter 2024 Earnings Call. [Operator Instructions]

I'll now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, please go ahead.

Brian Kearns

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

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

considered the forward-looking begin, me or remind statements of made let 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,

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

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

Daniel Scavilla

as merger. flow shares range. build for increase we mid-XXs versus $X.XX, year, $XXX driven $XX million, million. or quarter XX% Globus our even and another adjusted post-merger of by with the QX afternoon, prior million Non-GAAP increasing in outstanding EBITDA back in the way with Free $XXX everyone. crossed good cash to the sales the XXX% and XX% delivered Brian, quarter was EPS was Thanks, growing robust XX%

reach Globus best-in-class of to and systems organizations, one to NuVasive all X out QX, we growth. drive have for surgeons, and reaching scalable our structures year-to-date X portfolios record support shape integrated our team, and launches a to rolling reporting which months. results solutions in quarter around quickly second the change, the are the of new and to new create can integration, a formidable we stage the and into offerings challenges future Through field product launches products Globus common begin incredible state drive a compete. product launched tirelessly overcome this create unlock set synergies is clock QX so in steady where team These markets to implementing reorganizing organizations to in combining the testament working number globally, coming that we

with XXX% quarters QX pull-through. notable simplify disk. on Spine through rep Focusing across our biologics, implant in U.S. and combined product This business. performance grew driven in robotic recruiting portfolio and is of gains offering, competitive our the offerings, product strength expandables, including cervical by increased of growth screws from our prior usage MIS the cervical

pipeline the growing. and QX is through solid remains recruiting rep Competitive

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

and collaboration products pace this these launching launching improved execute hit front, products, X prolific to in accelerated at stride On pipeline. its combined we the processes. to we and product new new continue The R&D development has our meaningful product to development due from development expect team developing continue with

stand-alone expandable these help restore share to to sagittal to providing an delivered at expansion spacer reduce continuous ACDF impaction disc Revel-S with is and while tissue minimized want controlled, and I retraction system meaningful height a height launches balance. you.

with help situ posterior introduced achieve In EXD. system to deformity the promote band HILINE is solutions fusion. system another strong bone ligament to instruments. testament Prone bone help graft advancing XLIF-procedural our and positioner correction, reduction spine, The The provide is with and engineered be cervical stabilization fixation instruments robust versatile reliable is a and anatomy and delivery allows yet additional to XLIF augmentation. commitment to facilitate EGPS expansion during for featuring combined after and and compromised for thoracolumbar dedicated advanced implants system

and safety, X retractor the nailing instruments to XLIF trochanteric ergonomics. patient are streamlined platforms. improve the and procedural self-retaining AUTOBAHN Pro targeting surgeon a nailing The surgical invasive the procedure, of wires, The and system solution compression, while and universal emphasizing that handle, features the is workflow. Femoral targeting EVO secure improve tactile AUTOBAHN system Nail for digital stability anti-rotation for aiming minimally Nail reliability and sleeves allow efficiency for AUTOBAHN targeted next-generation reproducibility Troch MaXcess the instruments designed instruments positioning, Pro

our XX,XXX to products to rental QX the growing with sale, highest launch, driving launched we number unit go as launches continued over X% this robot future year a the acceleration the prior year, prior procedures so the through sharing $XX revenue were exceeding and was where, life. million, up far versus that Enabling to recognize prior including procedures accelerate, since of sales I impact X addition from contract performed of we In technology growing rest XX% of unlike program, Robotic versus over growth we've placements year. rental XXXX. robotic XX% look unit launch. forward QX, since the

Modulus our are NuVasive and robotic later a poised customer half this expand healthy, platform and such on as plan QX, great and have is are offering our to Reline options adding second we to year. to performance. pipeline enabling this Exiting We products tech robot

QX. as to the systems and with enter penetrate for remains market we continue also high We market imaging ExcelsiusXD interest EXD

XXX% sales year. to spinal business basis delivered international on growing compared implant constant Our prior in currency QX, record a

business our in and products have international as throughout and investment for consistent people, achieved growth we above-market sets, a increased these regions Globus result.

offerings and range of will these moving market the performance by power be market-changing our XXX% Trauma a of business of our The one fully the continued combined NSO penetration internationally delivered driven base to powerful growth yet growth innovation. forward. tailwind business, product of the the businesses with this and of innovative products the The orthopedic combined of Globus specialty is offering the QX, and for combined strengths NuVasive merger, significant broad of uptake a Trauma combination fast now. feel have harness and X We

XXX(k) components business. FDA significant our of Late in QX, X for we arthroplasty received clearance

while ExcelsiusFlex planning ergonomic the user advanced with best-in-class workflows of robotic a a system while engineered restore surgeon the to tactile to platform, algorithms application, already is Total ExcelsiusFlex the and ecosystem streamlined consistent sole unrestricted, the control engaged. accommodates to paired TKA resections. and Excelsius procedure is enable Arthroplasty It Joining registration The feel. surgeon, the with jig-less simplified varying and and accurate preferences interface. the cuts Knee the is efficient navigation to flexibility CT-based by along surgeon features imageless ExcelsiusFlex maintaining enable designed and offering TKA, and active tracking procedure

our porous engineered System pairs and preference cementless efficiency with Knee with robotic-assisted is lattice combine cementless The or a fit. interface forma varying Compatible force in Clinical Launch surgeon operative expand fixation, anatomic a ACTIFY XD later as to and Total for element patient sales cross-selling reconstruction proceduralization key a growing implant, workflows, is anatomies. X% begun manual programs addressing this total solution and a basis. market to endurance NuVasive products XD pro we for penetrate our is knee synergies, contemporary that ACTIFY and these Services have continue on the direct to year. strategy

neural is procedures. expanding ensure used in that our worldwide, NCS Globus investing monitoring our more inventory is in to neuromonitoring of

with we've investing in our ahead, automation add Looking and signal that surgical seamless next-generation systems enabling will technologies. more analytics, begun expand applications, integration

into integration status. Moving

in sales increase training, to invest with teams through tech growth they and key field opportunities their can surgeons to in investment continue We sets, and product cross-selling. hands-on our their experience so significant product offerings cross enabling

company to the International one start this work common as allowing one will implemented have in synergies operating later We year. team. systems us and U.S., system

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

we the Globus the to the enabling is To and stronger. accomplish the West been never neuromonitoring have leading #X in has we have long-term spinal imaging, an portfolio as lead, been solutions. robotics. spine Coast as decade, especially I arenas this innovator of in property remain and further intellectual be last navigation on this, PD we'll projects, to expanding to and our committed existing believe committed ongoing prospects industry Our and presence tech at continuing forefront a focused continue for on the

VIPs, with of our Merck programs we marketing enhance posted And over surgeon further approximately increase all globally observations. the education. we our visits through or about strengthen interact training. surgeon alone, affairs, surgeons XXX addition, programs and and where they aspects We continue affairs, to and products learn through second business In trained professional in-house our them quarter engagement how XXX surgeons impact and in case programs with hands-on to in scientific through

reaching have As plans. of financials, in out-of-pocket be you year. investments been for organizational benefits growth begun match and can quarter's synergies spending towards this are to identified actions see second we state to from structures half have working implemented, and prioritizing and been future the the focusing realized In-house have steady on

potential the of for resources been us never our Globus and harness It's to shape markets. believe I our to the up greater. has future

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

and the to want call musculoskeletal team world. I delivering furthering support, to the thank incredible preeminent worldwide the the in will the company becoming Globus to and for now quarter an dedication technology pathway your I over Keith. turn

Keith Pfeil

Momentum good everyone. to quarter we've transformational at Globus our closing September afternoon, X, XXXX. impressive as of continues the and merger Dan, completed another since grow Thanks, on

next on wave Operationally, we remain preparing efficiencies for heads teams bonds deeper of of drive investments while continue growth. ahead. greater path place the into to to down efficiencies our put plans to of looking Commercially, a forged realize have

profitable cost energized path chart quarter second as drive in growth our prudent steadfast commitment. our demonstrate our the and results and control remains we culture for forward Our

Revenue U.S. in XXXX. of QX the and was more into international constant day growing selling X XXX%, as basis. quarter. Day with second Digging was a on reported to the currency compared XXX.X% and XXX.X% million, adjusted as $XXX.X growth

income net was $XX.X QX diluted of million, fully income million, share. net earnings per delivering of Our per $X.XX $XXX.X earnings GAAP non-GAAP non-GAAP $X.XX in QX share. diluted was resulting fully 'XX

The earnings second over net income quarter, while year per quarter share non-GAAP XX%. XX.X% grew the prior grew

earlier, as XX.X% a a However, the adjusted as was in commented million. EBITDA increase cash free by flow $XX.X shares impacted XX% diluted on merger. was non-GAAP Dan was QX result EPS of and

was growing our Musculoskeletal to driven million, quarter year X.X% XXX.X% primarily grew the in year revenue forma contributions $XXX.X musculoskeletal versus quarter. the assuming prior of On quarter, results, NuVasive pro in prior compared a from was the prior merger. period revenue second the basis, NuVasive the

quarter. to by third businesses in the revenue portfolios. the quarter in trauma well grew our as musculoskeletal growth X.X% year market. forma the primarily combined revenue driven compared Technologies is consecutive U.S. spine our U.S. the prior international of and was as Enabling strongest second growth This Revenue quarter pro

robotic impacted it Overall, units during rentals our or quarter a moved of for was units purchase, by outright quarter. volume-based highest and the arrangement. rental, combined a higher at ever during second capital the partially quarter, EGPS mix stands whether quarter an highest However, lease

technologies. we market we penetrate with to Excelsius suite As of look well ahead, further positioned remain our the

a to million, was on contributions the X.X% International call second NuVasive. and full compared XXX.X% pro technologies. revenue year million, by results basis, fact merger we've quarter. with trauma Our to basis U.S. growing on quarter compared to compared from I forma XXX.X% quarter to was year pro revenue quarter in $XXX.X $XXX.X U.S. each prior year reported quarter, basis On the growing since driven as the quarter. attention experienced second forma enabling U.S. the growth spine, prior prior the that during grew revenue a an sales of the as-reported

lower forma capital pro grew as uptake, as X.X% international a Pulse a unit by partially implant reported, led sales. strong by primarily On lower of offset basis, revenue sales, result

prior of Our sales XXXX in profit compared XX.X% EMEA growth of year quarter strongest regions. the the implant Am and in to were quarter. GAAP in was second Lat the XX.X% gross

with namely the amortization. is profit the decline Consistent commentary from previous step-up merger, in with quarters, gross NuVasive associated

fourth expected step-up As during to end amortization is quarter. a our reminder, fiscal

gross the impact NuVasive as The XX.X%. expenses. step-up amortization, adjusted higher of consolidated adjusted reserve profit the decline Excluding gross inclusion as by driven well was of nonrecurring our inventory profit results largely some is in in

full Consistent with year in to be still expect my for year rate the we comments adjusted upper to gross the of XXXX. last quarter, XXs full the profit mid-

to offset achieved in by the year in-sourcing to compared the X X.X% which million of of taken. through expenses to The inclusion $XX.X sales a X of X% the consolidated $XX.X NuVasive is prior impact Research mid-XXs our quarter. synergy plans. actions with profit is sales or will return development goal profile, the of and our be year longer-term cost increase synergy or and the of Our million result partially were in spending in results actions year primarily cost and second quarter gross

partially now of X% million in the SG&A second in in on year Looking as year is XX.X% dollars increase R&D fixed to full of well of merger, prior be XXXX or compared quarter a directly result the the taken to to expenses sales total actions as of offset XX.X% XXXX. X.X% sales of the or full ahead, year. the SG&A expense expect were the we $XXX.X spending. The cost $XXX.X leverage cost second for million by in of quarter range NuVasive

expense X to as improve interest expectation share resulting line sales. the pretax income the $X.X of from percentage the that of buyback The SG&A during the cash the is close, was Looking SG&A XXXX interest credit year Net million $XX.X year to X full our driven expense quarter. compared note, plan, repurchases percentage interest ahead, XXXX is expenses at our senior a close. merger $X.X NuVasive impact NuVasive merger paydown second of related from quarter by over million in points which at million full expense to the will of of the to year unfavorable prior assumed convertible use is fund net

second the year The XX.X% allowances in losses. on GAAP quarter, higher was driven primarily tax compared valuation for XX.X% prior the by rate foreign to quarter

rate tax second non-GAAP Our during the XX.X%. quarter was

tax non-GAAP in range year full to our expect rate XX% be to We of XX%. the

over Moving cash liquidity. and to

debt closed, was line million NuVa June X.XXX% million short-term have to as $XXX.X million due spent as credit, XX, on well cash, million XXXX. and XXXX. share a Our equivalents and We which notes repurchases. only of cash senior paydown, marketable $XXX.X did not Since the $XXX.X any merger of credit the borrowings total long-term securities were of of convertible against our consists in $XXX.X at our the line we fund

they remains Our XXXX. when notes intent March focused are due settling on in of these

call, driven with cash operating and by was Our reflected million, balances U.S. a last This impacted QX the our was a provided go-live. accounts as the $XX.X during flow first net quarters temporary cash to quarterly million. investment free delay working accounts and of $XX.X systems result Consistent activities in higher capital cash operating receivable. impact flow receivable second as we by and comments my higher temporary expect a integration

have regarding $XX.X X.X% We higher Capital and second expect and during collections of no quarter collectability to the our during or cash were fourth the concerns revenue. quarters. see million expenditures third

X.X% of in sales. year to range full expect to XXXX be We the CapEx of X.X%

integration. Shifting attention to

offerings team sets, providing We product and continue with we by increased to tech field hands-on experience growth new opportunities surgeons. high in enabling cross-training commercial drive our can sales to invest investments their so expanded in

continuing international and later the this businesses to out team operating one work to this will the which as globally. this common remains to refine begin plans allow us of our merger. rolled in system we year, to the Earlier year, are Operations rolling out U.S. a strength

costs are faster. machinery and actively which manufacturing our to and our in cost executing We plans drive supplier in-house expand synergies renegotiating around new capabilities, will investing equipment planned

with system business. volumes Globus are distribution overall The third-party to of drive operating on consolidate times part larger Memphis activities a to working and now All delivery becoming orders a center to is plan. savings. the progressing accelerate cost We're also and and vendors common

year synergies savings. We synergies. are will achieving working drive the cost actively to year our now and commitment X We on that reaffirm $XXX million X again in

to with range upbeat thus of an of commercial sales as share. range $X.XX billion and now execution and be results be growth year. Based operational enter guidance. confident to XXXX We the $X.XX provided in the and enduring remain fully updating back net billion and our the expect $X.XX per on share $X.XX we earnings the previously We diluted our expect per far to that, non-GAAP on focus to we half our are in of

net over implies XXXX XX.X% pro of to implies of X.X% sales revised billion. due despite growth count the guidance over confidence forma year revised with to enter XX% to so the of more EPS we projections, guidance We Our The EPS the non-GAAP the as more prior share revenues continue X.X% year. $X.XXX growth our conservative non-GAAP second as gain to appropriately and stock-for-stock $X.XX a higher we merger. remain half

closing, a team to internally, In the want med our I opportunity space. has been great challenge. in stood companies an to team. tech of company the leading a to change driven Bringing our take lot to our up X and for these together us We've has minute thank create

we We positive new to resources, the we the most have have financial drive manufacturing and take chain, have achieve heights and the us have the people our mission. to and to we supply technology, importantly, change

of steadfast We a adhering pursuit Globus historical manner responsible sales our to growth remain in financially in will principles.

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

Operator

Barclays. comes from Miksic the line question of first The [Operator Instructions] Matt of

Matthew Miksic

in of and strong first the congrats a really half. And great sort here on results quarter

of of sort but been you've sort numbers the that is initiated you forma out the kind of NuVasive referencing. really subject sort around and So of laid I just plans acquisition when one of multipart same had that you kind of the question, pro the

opportunity I start, think what given put. But way we updating expect that you X.X years. at should the the I'm to what maybe bit at with get start whole simple also, than things talk everything sense last integration? those And you point, look now, and we were first the point I'd to you of a all just then the how intermediate to at long-term success you trying helpful. familiar and of a numbers are half better expected. start It's with for about great not be of a So might to the to to kind over the is front-to-back little point that going, here? say, color expect would should going

Keith Pfeil

is the Sure. to your Matt, Dan will the take this of part Keith. take first I'm second part. going and question,

your So off to to a gotten we've strong start. comment,

as companies I think was about the we're where messaging wise, as million forward. announced And closed the as of well the -- for the together. as when with the thesis we we synergies thought merger deal well in when February cost $XXX we when in the we that, why cross-selling 'XX move remain very steadfast talked me, us opportunities identified deal of that in to terms number, the would bringing on September, of be -- there to

get we strong the into and consistent that and get in -- outset. relates at the move together, insights We've have merger gets We're more months a start, coming third back, the together. as see think how some us and to And to XXth performed negativity the companies the of I the gotten off as of to take confident. we But it I Dan more basically some each of passed, this quarter, company we first being now light provide of start quarter as being forward. been you'll after the we're up help really the especially in XX look as recast through we a month

which X the the known profitability shifting the to is But and million. we getting in Globus prepared attention mid-XXs to years I And really, $XXX profile, profit relates up as said good standing in-sourcing gross has like historically here back X been for. about my that towards gross feel remarks, and it years today,

Daniel Scavilla

Yes, Matt, on I'll build that. in

know, and long year, into us So the that coming of see. get what anything for go up, a projections to of certainly at always We'll that. going what into we this really Keith you'll that share like a and do we'll and going for when are plan. obviously, more we to rest Day we you to some X-year strategic team Investor that a into rather where longer-term look roll to the think see take going that develop also that's our is be from but plan not where I Again, going commitment to X- XXXX. It's directional. of we We're as term from what as project do, we're

tuned. So I would say stay

think want year third through share longer-term could year to those assumptions. want we what be, projections where the I next or we'll the to we fine-tune on we then quarter, get based think and be

Operator

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

Vikramjeet Chopra

One, congratulations follow-up, you X for well should me. had How quarter. on margins The the full please. EBITDA margin XX.X% for in think of QX, And we Also I expectations. then about a year? up great put ahead a

Keith Pfeil

Sure.

So thanks, Vik.

necessarily see think that's as QX for the a to -- into additional bit a the we EBITDA As you revenues coupled on here QX. EBITDA. forward, step sitting sequential you'll year, what to on from QX when 'XX full I we're capital we're That a a with create for closer down I look forward sales little little today, QX, year, and full move work did thinking it I will to we to get will think guidance, headwind give but think step of But still the I but be a little fiscal going year, in XX% to a we're get revenue. predicated think over look XX% bit QX. think to expect a we is I that. XX%, about to QX difficult to down at bit really of in going we full move going don't as in with that like we really little We're

Vikramjeet Chopra

question, seeing capital follow-up Great. my wanted just the And to you ask then what on side. I you're

the at talked has One another competitors end the for received recently orthopedic the the FDA and robot. up large the spine competitor with of approval robot about year spine of coming

the competitive landscape. and about talk market the Just

Daniel Scavilla

Thanks, Vik. I'll take that.

our things, right? enabling of its couple there's about mind and we existing We'll have occurred expand a tech from Keep long-term talked executing that's that nothing that been and plan, that. our in So through openly us have continue with proceduralization, applications technology take we've things deviate would that. to

As you recall, one of the main available for drivers of total areas the company merger rapid penetration. was to, market in fact, increase our more create and

where So this at we'll while there's we play take has we from QX seriously the our that's in in the or portfolio nothing in QX, any at it's which market tell were and altered with entrants would strongest. look that where very and pleased working was that, we're one capital point shifted with I going. of you, the we're I we plans on occurred

stay and focused. we'll execute to so continue And

Operator

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

Shagun Singh Chadha

I of your -- doubling pipeline double of And as head into it And a sales force pace follow-up. wondering, why for I focus growth? I'm wanted just Congratulations. the can here. of I'm then A share color of have given combined seeing sales lot the bright the seeing robotics. possible you such -- of guess force? on What on like? the the XXXX? place any incremental provide to you the your you spots look strong Are placements if I your is does to you're benefit wondering we just

Daniel Scavilla

potential. Thanks, love Shagun. of I'll I'll to backwards. uptake that. that And would double the that. have take we certainly start I

and I right think you're to off, willingness markets adopt first what technology. is, seeing now continued willingness the the

Folks pushing it really which are get no So it to with you, longer pulling helps. or in you're actually there. fighting

sign so we're way. working And been things that more will And to. I've do that Modulus, primarily thing doubling, to the try the because Reline, the we get to applicable we that's as Globus occurring I we'll this within going we'll the that, again, on that's I'll part still point and acceleration. that's other where that, type certainly coming when our of but the think of half said, But think do NuVa technology for I'm focused to year. and push to users. see I not do an really make It has see second up

Shagun Singh Chadha

Mako Got the helpful. is Recon on And a system helpful. and a an elaborate since a Can your exactly you robot. it. just it's That's And can in talk then on commercial you differentiated what well-penetrated would That Rosa? your versus already strategy be about market?

Daniel Scavilla

no problem. No,

I commercial on the won't that go not that react to to execute So elaborate everybody to. for bear and I want lay out strategy.

I'll way. this. while than back that or offline further takes this take to some out down go do developing And and we're it now on let's as right I we get do to So this the technology differentiating it with there's point rather just that think I it and path. compare our with head and puts but I'm of to approved, glad head call, be been out there, don't having want to robot do approach that the And go excited you

Operator

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

Steven Lichtman

on your growth the a talk market you forma that where little I hoping you was an about share a as And bit give spine, put be pro in growth market is of at you basis, look on update back where U.S. where could to you growth relative the you first market And half pricing, if your given think you now can and would now. this is? great. Dan, year do think unit

Daniel Scavilla

do. Yes. Steve, we'll

I is that pricing. don't you, we market is from along assumption. most with anything have all growth tell always our in the an that. There's those time We would along or marketing said negative for say this from nothing that's still The single would significant low adhere talk. occurred digits tracked we the I So positive either or the lines. to we We've And part, with that.

for is There around With project it's company, that as multiple in the particular, the we I'm around are that. where less But you, that just look X%. range. X% that we and or probably as My that long with tell would a happy the term quarters thought call over we I still I us, certainly be with are. years, more can

thought where areas, other where we and there's couldn't would was can strong or right takes I certainly quarter around second think this you what be places for But the range. X% puts far certainly I tell just have so first can we my accelerate. guess in penetrate year. way even I and we're I some the if long-term think we it

Keith Pfeil

looked Globus is at one I And comment Steve, -- new of just one price. is would offset to Dan add the the to introduction we've at, products one that historically of thing things

with think I and to seen this or new is hitting to first that's QX us of market help offset bringing we in That quarters, the now us X X product price that it products as see quarter. future. something strategy will X you've come with in another and market new the

Steven Lichtman

follow R&D Got to the you it. in you investment Took down quarter. for the overall in of Can viewing bit that are on lower resetting wanted how year a there? integrate? little sort now? you you're up expense. talk Or R&D And as then change in came projects just about Any philosophy in

Keith Pfeil

to third-party like moving products as look around team that I focused same things bringing has spending remain cost the market will this, really is new control consulting forward. more it's the and So at still Really, and spending, that. on

together. is improved the and testament a do Dan moving As you to about coming really in-house. a lot teams like know, commented forward, That process. internal it's things of Globus development to strategy the

of numbers. the some seeing You're

Daniel Scavilla

I Steve, also elaborate. just would And

them changed projects. or We reduced not to putting any have remain in-process through. We committed

Operator

a Saxon from have & We Company. of Needham question David

David Saxon

both in the Maybe revenue guidance, quarter. I'll start earnings. Congrats with and

by million, about beat you $XX $XX million. So

bottom You top by by million. raised $X million, the $XX

market then seeing you're question similar not why through? that that, goes down, full seeing the It by that's offset is pause not come And for on come R&D we're might maybe all beat? the up. the more full anything kind raising like than guess I just of looks beat giving So tax earnings. in tax and Does you

Keith Pfeil

great question. a So

and still raise we goes this not conservative, As more we quarter, XX we've more couple think business. confidence the gain we back about to about full day We quarter. confident. really a last quarters, of line, through every what we're in appropriately We months. every did but top more the get more talked remain and We know the

another pretty there quarter the back. remain I had see the intended. things out. call out half, to because we But think to line, bottom we this the to I to we're, business as turn in quarter right But I depreciation how had expect as that to $X.XX point add year. point was to again, noncash conservative we expected. signs get executed We'll all signs well half business what appropriately team think to look well remaining want according a onetime we all As last the through has a It's the -- operating second to about operating related first that I repeat. of did that don't the

David Saxon

Okay. Super helpful. Maybe a quick follow-up on that.

Is that the you dissynergies sales how is do we have clear" kind that XX of And my $XXX "all milestone year? follow-up on tracking as of kind So or view assumption. still is just might this which months a the million after moment? then

Keith Pfeil

I you organization, to was to ways the would sales passes, cross-selling. forward and brought to bringing to remember disruption. for really we've say this new the a have each since of them disruption lot went together, that done, confident, internal feel quarter to and more we go more maximum with we deal We force coming very sell, systems the what So as forward announced. There's fast

go first did but I but in I'm we and fast within I sit months. as issues to the really we I'm So come as we're maintain today, through worked first we has understanding We've quarter, we previous conservatism. confident XX today that -- together. still than make -- think The still want that feel more still that about year, sure team

comments to should of As well it more about confident ahead. U.S. getting look confident. relates more we're help indicate remarks, In that in earlier to portion the we as having million, I musculoskeletal prepared each portion in the the quarter as of $XXX of business. as dissynergy, more business Those the consecutive my and and more passes, consecutive some feel the growth talked as the growth we again,

Daniel Scavilla

the state Yes. to build of to looking is And would reach certainly, the year. by what we're end I up steady

it sure back. forward though beyond this point appropriately and we be to step XX- We XX-month where want of not the that drive mind, I lean and We harder to push needs lot to want tell approach mindful right strong heavy lifting we more get now. This conservative. get So to spot in it's well this want to be. is to that. for be we're where even We've got we you done right. us is But too, this of of a make do. would type a a of to to keep We're in where

Operator

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

Matthew O'Brien

just Dan, for absolute next here, as want where The talk understand you $XXX I look that. said it's Street increase. about million year all about we're know next much and to -- things at too I I I you modeling year, didn't

GMED at improvement. back $XX would $XX NuVa million like stand-alone, then If you stand-alone and go that's you absolute of about each and do look and $XXX so million something million,

$XXX $XXX million that So you're trying at modeling, to as some time, same these a cetera. that think versus about is spending, delta cutting there, you're and Street the I the teams The there's still et integrate million

the a is can years market growing to back that way. think several The question we overall more year? X%, next combined is long-winded double for about or maybe doubling entity how in So that a next is you Steve's bit little rate? the Or should even market the

Daniel Scavilla

it, Thanks. appreciate I Yes. Matt.

to to front we'll low early where in on So right? of now. for for grower honestly single, double-digit be We me be said, us are year. next going we've high things, even of comment a this too approach. is got strive Like through lot a It to couple merger I a

Day have to a the longer going are look. We Analyst and

can think the year. deeper later have I in So a conversation we

So regardless this of front don't we for right everything that. us into in year of year. see have let's that's where now, and the consensus for adjust to where next or those conversations I we are, deeper is the market with But go of where want versus go second half

Matthew O'Brien

Got there a it. meaningful the It follow-up to the inpatient rule. on then reimbursement is cases single-level the side. like pretty is And cut final in just looks

that how push side? Because ASC curious recently. on a that just could know how you're your And I for business? the bigger impact then that's I'm positioned So been

Daniel Scavilla

don't the But honest at others, take have And in we'll approach, are we'll not we're opportunity that. an that through an we this confident significant Yes. where I see right coming that, ASC we from and this a And occurred. anybody things I to a bag have quarter, think it say throughout off to would with with modeling be the you, process tell constantly or have I and than else. we I the accordingly. excuse with that I anything or me, track related regardless that's you don't we're becomes that. issue. evolving. to anyone that's literally strategy, look -- really reimbursement ASC now, think of you've far ASC, and we're going like we, else year again, can who's announced better go, heard If developing with it I'll do and do with would react the through poised the so feel signal that

Operator

of ROTH. Our Wittes of comes next from Jason question the line

Jason Wittes

on First they to you cross-selling of and synergies progressing see we the have waiting quarter? a of are level? terms rest it evolved how the this meaningful those do still Or year? opportunities, see off, for in And

Daniel Scavilla

Jason, Dan. it's

you cross-selling So a let's blurred. the teams, little start the honest, with that is with be do we do To more continue. it bit gets it see

better for have don't products training occurring. precise teams of in it's our them the is can to some occurring, that. I amount arrive of know further as We that. a is the suppliers to the that still come type and each think quarter. see teams, I cross-selling. from out thing. products deploy you We with with sharing we our But what that And out decent help I with to us see number we think we'll and put incrementally But a have it's lifts So getting

you of was was But there of blurry it I but it gets That's kind a to with what us that that have I why we see. think as it execute out goes a of tougher, see one it little ways to I'm it. do number, question Matt's growth don't market easier blend, to as best and a execute. bit really that is. before. throw as see model back I I driver and for above as potential to the happy

Keith Pfeil

sets. you Dan talked and I Dan's investments, earlier would in remember, where And some as of cross-sell the to just about to to of I add because on ability expect driven to passes have we've improve comments, some to comments new time investments the

many a from of of came third-party because products Some those longer had NuVasive products the time lead legacy vendors.

greater come product legacy As because those ability teams to that to there'll will on drive both in, hand. products start cross-sell be more for

Jason Wittes

when given -- But it am of start second going commentary And correctly? that half what's that it that sounds like from like is sounds seeing this this your year I we hearing supply. with

Daniel Scavilla

sets teams, to because Globus Each we're to at And they we amount further we versus a they the have large NuVasive a forward. tough you look do of act are blending one. it's But at at and a honestly, this It's incremental this, order, is today. it's really an getting what teams as I'm enhance point telling occurring it's time going occurring an better. pace. No, that

fuel be we'll I this, to them whether a lift going see our cross-selling penetrating based is just we're So or in customers. applying sales on existing And think out. natural what teams

Jason Wittes

Got it. question. a And to follow-up quick maybe just a previous

be? and dissynergies about the Is may $XXX asked I beginning. that past, you revisit Am we're you're put thinking looking to me thinking to XX You think you number. And dissynergies. the million to think I $XXX said be kind I out numbers about months, at to you're willing if at sounds that really way correctly what well? your might that like the until were come I outlook kind what the of correctly, And number as million heard not was the eventually XX about it to of -- you and

Daniel Scavilla

confidence to I that we as where worried continue Not it play. say, months, think and say finally right? the certain I'm things in XX through, but are. work just XX I we of a months There's know I think And just period, so. and activities would are have position to anything, up limit, It's occurring. where speak to that lot in will now that XX-month we'll about for by certainly So a be. still is not this we with saying,

call I belts our to quarter X want to think we that. or under get another

Operator

the from of Blackman comes question next of line Our Stifel. Matthew

Mathew Blackman

Can you me okay? hear

Daniel Scavilla

Yes.

Mathew Blackman

Dan, Great. just I a start, could Okay. If clarification.

I've us a I think on couple and got the talked to you those X approvals hardware timing? meeting remind of the And follow robot. that. couple mentioned NuVasive for follow-ups then just of products you you Can a a about up,

Daniel Scavilla

Yes, put on there. in my problem. products will was was saying we I NuVasive What no script

Modulus base. body be things and we process get a pedicle X the we For example, open And the the larger that of of and type inner customer of thing. an when which and should screw Reline doing, obvious would we're in up done, software

therefore, with expect got if occurring more our to software and with are and So that we've would surgeons those we in see to using waiting are instrumentation, use NuVasive-based once surgeons. who those, lift our sales and it's

Mathew Blackman

of may placements Okay. sales any Understood. just then quarter or quarter, Were the out on these there already started just of in quoting And first started think them. I And curiosity? do I follow-up. one this that have gauging some of some even accounts you point, had

Keith Pfeil

There we was related one sale far account. that to closed thus NuVa legacy

quoting quotes and strong there's volume interest the on continues to you're And the think me, As sides. out both amount about the increase. putting to really I pipeline, of

Mathew Blackman

is That's the of little over I'm that we're is more about all all other maybe of the think that vectors and My see frame you're but power swear. reservation, question, underappreciated thinking growth for several the of going the could years? final This great. you pieces maybe more Okay. I it. that sort into the and have one you us the launch contributing how next hoping just a to opportunity portfolio about bit probably to off I

Daniel Scavilla

that is things thanks. the excited year. It of this Yes, most one and said we'll I've do before about I'm

have We want do. removal want type great, fact that where launches. artificial boundaries freely without the you to to can that be other by surgeon as go a can consider soft right product tissue move particular, that, damage with we out they bone hinder in things that restricted with now they The to But to allows know, what transformational. cadence or not you be

only I not or dural can of also occur. that and surgeon, make that can of think tears other create it so freedom it into does And having by items the the hands safer it more type not put that

years in have. drivers to itself will So as one main we it the there's come, scale really growth that, continue for of of that think and the field in that the we up, will I a for interest lot and be hot it

Operator

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

Ryan Zimmerman

ask robotic I think, lot an talked week, robotics and from And and I get we volumes ago, built X incremental you ability that was pull-through. a more about a this to you've assumption want XXXX, of added forward at Excelsius. time, the back kind even would today, the Fast the Globus we per launching. incremental And thought Excelsius just Dan, around for in, and lifetime to adoption. XXXX, about when was case

at versus on when little opine a whether infancy kind you're in of was so today And maybe just I'm if our its point? pull-through maybe wondering assumption incremental stale what seeing you field is a the in this more result and kind of impact robotics as bit one case that of

Daniel Scavilla

Ryan. Thanks,

see and and would to and in pull-through, interested the So on that what new. can possibly of period as it's a lift time pick even depending for they're say you where there I But whole want to you if of today, be that are more range XX% pull-through even occurs, a doing. a more of we or a robot, that. what procedures I with surgeons continue that think whether or doing That's implant and started in is several assumptions, see kind this, more when you usage what be we place a remains we lift

way. But obviously, not underpenetrated that total that It's to market each create good is time. its very news the and robotic is in in in still neutralizes total. over the going infancy Now account

of I occur a still growth is. that where really there's it And so think And throughout. that's that can lot

know using. But per pull-through XX% say model assumptions, you'd it launch. in and and what I year we've think don't I or something the that's in then many you of and So robot, how depends to since conservatively they're whether we remaining can you where cases it XX% be not, what pick case on that one forward experienced as because first go see if

Ryan Zimmerman

allocation, now? a What the cash some Okay. flow. cash, Maybe this we free At we're should turning before to to to generated Very as your you Again, merger, Keith? kind nice helpful. lot think lapping Keith. about are of some flow. starting you you're especially really point, the how do capital with going of generate And merger cash

Keith Pfeil

Yes, question. that's great a

be maintain capital our and is here. as an a allocation part I sheet the balance from culture about talked of about internal near think equipment. in to strong to lot on perspective, number and development So focused Capital is remain. allocation, Globus machinery as driving additional going R&D one, going term will We've in-sourcing

I would forward As venturing see us become core continue think again expect us to digested would after absolutely musculoskeletal. outside we're opportunities I of our merger, about move we've to to But on the look M&A that this business the active longer within term, front. M&A musculoskeletal. don't I of as think at going I we

Operator

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

Ravi Misra

TKA This is Misra in Rich. about kind Ravi program. wanted the to for ask of and I Excelsius

going What kind what versus rep about a that. are direct ASC a a approach about bit opportunity if hiring. you of that about you from you little you? channel kind talking of of versus reps? clarity bit inpatient/outpatient? around could And ahead And capital You're of little are thinking give How reps perspective,

Daniel Scavilla

Ravi. Thanks,

above. therein. reps take we happens. derisked approach. build and hire as We're say, go grow what we is own a done what stand-alone But have we sales out always in an with to it, be of to It answer there's certainly intend Very XXX our the not not trauma, it somewhere kind similar direct. we've and what to We're go doesn't done all see it So concentric it mean type circles. move-on have of we spine, want We the in force. exception into with going let's to to going do approach,

to go where to the focus and occur above, order the are where the customers going where is answer in The all the to to be we're procedures meaningful.

going And who to are them I for size way. reps real be in knees so we something too, right not the we nowhere if capital addition us. going is, investment. now. is it's the And all control us, think thing certainly handful be to folks cost, not near but need one approach help our that's the This facilitate to to detract we capital we're in you the addition. of know focus And know but think through, how we of in our of that you the rather that that of thought But will particular, ahead working just with folks, I we do the spine our spine control of what given a opportunity it

as forward going see growth. to not we our You're of a move degradation numbers into

Ravi Misra

the single-digit growth. How does just high that? incremental maybe If digit, aspiration about that factor could year? single-digit this high that Excelsius mentioned to back has consensus get low into of think double kind that Great. And Is us you you layering. next then to to help that

Daniel Scavilla

tech implant anything above the No, is to it's you things, going enabling all to be with to right? type do going of facilitate So be pull-through.

so And and ranges, it's company, to speak I everything get as it's one about as those there. utilizing

Operator

Craig of from [Operator line BofA. of Instructions] the comes Bijou Our next question

Craig Bijou

unit guys but to a robot had And tech was the unit the revenue X%, and on wanted the guys of up the enabling robot rental start made program comment side. unit of record you placements, on acceleration I lot placements. you --

Is a the what's knee headwind potential guess, the rental over capital specifically, tech driving period program? a and what's then I versus you even becomes because well are of as across revenue it So that it the the robot? so the recognizing the time XD And enabling sale? acceleration longer

Daniel Scavilla

Yes. Thanks, Craig.

you things. going little to become be it's more customer we've leases preference of we'll It's rental announcing taking rent doesn't can, can. tell just always as obviously bit but we we It's It a where where rental couple we've that there now. just that the well. right we for a a offered, on company. to it There's So I side. something we're would out that be seems more sell mean

not I'm revenue that us targets. concerned taking off blend about overly suddenly

anything, lead short them, I annuity. are be thoughts I And them, one So of into at an pretty if think, like it of not if look would anyway. term a they that Several sale. of all the

see at I don't so they course. think or stay going And sales, see a into But customers the that. anything to anything end you great. to want the would we're it's the tell If day, these, would like if I slowdown convert of that you rent

you I for think what quarter had this unique. is

off, more long this term. rec a you had thing, we all day down take you're First think the going just is comp good probably strong slowed a play that unit stuff of We for X%. rentals, to the long really for which we'll had had a because the lift rev But in that we again, against, have year. it and placement, might I which that last

be on couple so for we that's other quarters do if so and And of move things, a it. what to

Craig Bijou

moving with Got How the it. willing guys -- or are you question the earlier questions about tech and disclose that ASCs That's the helpful. of business that ASC. way? the And do or to enabling targeting on your think ASC what one maybe combining to driving surgeries with you

Daniel Scavilla

sell customers want in facilitate it them things I appropriate on the what and to they depends the We best treating the think need, that will ASC right? way.

there, through need are the where there are where cases And have cases we been already they just need and robot, a hand hub. so they there navigation

they do we're really that think that the want. positioned way best I to

One with ASC. thing we're active to want is I do put out

something we looking make that to don't want sure have into. we're I impression the So it's

given there their And size throughput their best on those their and want really, what's what active are surgeons it We already. for what depends just customers, again, and is.

Operator

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

Young Li

about trauma Li you on sustainability and provide business? Maybe be more is bit talk for growth. more contributing U.S. the well the little with Can drivers some can and you It seems of color that. This on us to a if to Young Matt. the that doing of

Daniel Scavilla

launching long-term be growth Sure, plans going it Li. and to and to we've since that continuous of it's similar spine. Young It's talked those one incremental about

that penetrating you're contributing as you're way. market, to going So that be

that open year, headway allowing you through is the at we're penetrating rest the penetrating to the is factors to of growth simply been headway. as we're more especially market compete. we've up add in we reason market one further and and past make year this of So of the that areas creating decent launching the The products,

hiring, And so that you've launches. rep market got product penetration,

is One us away of and the can NSO a really doors product great biggest a for lifts that that right and the now, itself big in open has becomes lift.

launches the market the with business. trauma to us gain the penetration in combination So through with are product merger what's allowing

Young Li

Okay. Great. Very helpful.

your On about little bit up that the competition? on thoughts into What's stacks versus it how the I a Prone differentiated penetrating wanted hear that XLIF market? system, and to about

Daniel Scavilla

that in solid to approach. of through again, did Yes. positioning, market. also there is one patient in created and this through went ergonomics retractor this -- and Well, We one not This the penetrating for we We're that from reasons and for the of really create better benefit market as that that merger. will solid And doing of firmer enhancements sure the why NuVasive type there with more they're the team. the a side. that's surgeon you further a have out going lateral allowing that's

I altogether. incredible proceduralization did with structure creates package why technology, this. really of holistic our benefits cage to marrying up to of think too, technology technology, this the marrying one enabling It's enabling of new work is it, the many that expandable invasive we

on enhance capability. the me expand And we'll just really area. further in And you think out stay that strong dabble going this think heard to where in and I of even anything, come I out that we're if strong. how course, neuromonitoring that's and we

of all the strong into think, very a add in that will above, So I position procedure.

Operator

Our next of question Ravi Truist. comes the line Misra, from

Ravi Misra

Just questions. housekeeping X

about rolling of we that selling think it think should the of that do kind half that as we And second, March, year? how on about days, back or in the the down the paying On in forward? convert

Keith Pfeil

back half X QX, more more day the X in QX. In there's day year, in the of

to correct. are As you relates it convert,

I settle earnings the changing to there. but those are don't when on That's our out due current cash. notes If we look changes, see will We call, anything they in anything next intent. report will

Operator

All for right. With no you further questions, this concludes the Globus Medical call. earnings participating. Thank

disconnect. now may You

Globus Medical (GMED) 6 Aug 242024 Q2 Earnings call transcript