GMED - Earnings call transcript Q4 2024

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Operator

Welcome to the Globus Medical's Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] I will 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 you, Didi, and thank you, everyone, for being with us today.

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

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

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

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

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

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

Daniel Scavilla

cash record while a great with best-in-class growth this or fourth EPS Thanks, Brian, year. versus Non-GAAP free delivering $XXX XX% flow of billion, record maintaining or year. XXX% sales year. status remainder million, increasing to diluted making QX a an return to revenue and merger. Revenue inherited increasing financial industry-leading strong debt-free $XXX versus off and full increase earnings million us record good the XX% all-time the the strong We performance flow The was of billion launches. NuVasive of in for innovative a quarter, profitability. XX% with exit with prior prior Globus a And afternoon, the shares cash year fifth debt we million even $X.XXX was versus sales $X.XX, the paying achieved XXXX the high growth, as was consecutive $XXX everyone. $X the prior product finished enable combined release will XXXX, from

financial and with We robot continued level tech pull-through. imaging reflect dedication the had setting banner through like and for and increased entire results synergy I implant their in this placements, congratulate enabling our base growth to hub look team building growth XXXX profitable I'd a discipline. of sustained in beyond year These on system the stage highest to accelerating and Globus for speed, acceleration penetration, and market XXXX. success. in forward

meaningful XXXX innovation Globus the launched we our team, tirelessly results compete, financial performance, surgeons. while integration markets our business. to that addition reach new so to products we our quickly In delivering incredible a state are to These which great and throughout working in scalable steady XX solutions create testament and our in can shape drive to

year. or with versus XX% our date. the tech In highest $X.XX increasing cash was flow our prior QX, achieved million sales year. yet quarterly was free EPS highest we versus for placements delivered we XXX% million, $XXX QX Non-GAAP $X.XX, QX, enabling X% $XXX In year. unit increasing prior or $XXX up and sales And versus to million, quarter last

surgeries and quarter, best-in-class shaping also launched our with spine flexing X muscle new We innovation products our technologies. this

retention our of across rep cervical increased in past implant factors, strength rate the by on of years with is years, product a recruiting from cross-selling XD-printed competitive of X one X% the procedures. over expandables, team, combined including sales driven our portfolio of XXXX. enter as several the our pull-through quarterly XXXX and QX strongest Focusing screws, grew field MIS growth levels spacers. gains our and product is robust business. in pipeline and high performance is we U.S. the offerings Spine The at significant all robotic offering, our recruiting product

to most continue and for professionals and destination successful tenured power the We competitive attract and a of can offer choice we future we the innovation see as growth.

cervical X features quickly system anterior designed and tissue a share As is micro want facilitate with more these launched highly attached QX, mentioned ensuring challenge a method a enabling we without products This providing and retraction our upper designed I rigidable more to disruption solution is tissue Radiolucent precise advanced for Each the reliable with blade maximum blades a independent MIS quick towers technique. screw setup, ring-based to blades, The minimally enhances you. previously exposure. attach stable ringless screw System well-positioned traditional for and and handle common mechanism, robotic invasive innovative initial The a MIS from to Cortex integrated manual minimize that exposure spine. in successful with innovative system, adjustments ALIF system to a offering visualization, built-in designs. and exposure. any our ALLEGIANCE for placement handheld accurate introduces a design designed tone in earlier, arms, fine-tune thoracic affecting percutaneous surgical retraction rigidity. efficiency launches technology and disposable Retractor posterior solution new existing Cortex, Excelsius Cortex using

surgical delivery low-profile market-leading Modulus fixation strengthens procedural for step. The in anchoring streamline with spacer visualization ability deliver instruments anchoring the portfolio of secondary and maximum the number by to instrumentation feature Modulus is ALIF surgery. addition reducing ALIF Modulus without for of and enable to ALIF fixation anchoring blades anatomy blade of need blades fixation ALIF further designed the the the The portfolio. paired efficiency blades needed with of ALIF steps anchoring Modulus the our

further I'll in recon platform QX. quarters. robotic Knee In addition, we launches launched expand navigation on ExcelsiusFlex future Unicondylar the ACTIFY in and System

innovation long-term growth. building to XXXX was is and a key for record us, year of this launches

are lead in competition development product significantly comprehensive IP to expand new this harmonize generation and and our in the expecting PD training over processes, We product our creation. to further investing significant

to In from launched launches impactful I growth have future in forward in XXXX, we we sharing to driving XXXX. the products planned XX addition look

$XX increase quarter sales Enabling versus of the Technology million, prior XX% were an for year.

since As exceeding mentioned, QX and was placements over unit since highest robotic the continued QX. XX% number prior procedures XX% procedures growing versus accelerate, launch, Robotic of growing year prior performed launch. XX,XXX to

QX for system navigation with and platform The offering gives Globus of available. EHub as EXD growth. navigation freehand enter market, The largest of sophisticated going the the the the comprehensive Globus imaging and ExcelsiusHub launch from segment navigation innovation we is well market most the opening navigation combination

headset, reality to plan ExcelsiusHub. work navigation also to the with with advance We the our XR near future in designed augmented

We clearance FDA to headset expect the in of QX. gain

continue power The to portfolio. QX enabling tool neurovascular seamlessly pair while offering differentiate effectively. oscillating tissue structures, unique DuraPro anatomy add around help and removal The technology our bone, soft easy extra allowing launched systems and safely and with ability surgeons Verzera 'XX, work to in drill safety including power tool our of DuraPro of for

communicate EXD create the existing launch seamlessly. and ExcelsiusXD and designed recognizing and robotic built in remains systems area high imaging remains enhance more immediately combining with delivering GPS system the over ecosystem, our future and on most Excelsius ecosystem portfolio. the Hub. together from about up that offerings value an surgeons of current ground interest is Investment tech differentiation our imaging, or this appreciating and we functionality and and in enabling ecosystem our bring stark state-of-the-art to strong, promise for seeing to We're the with navigation Market our our

spine high most on sales contribution and constant United double-digit Italy international growth and prior in of delivered markets Ireland. implant strong sales currency QX dollar with Our a compared by or basis record year to business driven QX Japan, -- Kingdom, XX%

Globus fully will feel We of move the be tailwind have forward and a to XXXX combined yet product beyond. internationally NuVasive power and we harness this as offering significant in the

delivered a business, with of orthopedic never business powerful growth of market combined ongoing disruption specialty the QX, the now, performance in with base by interest the product uptake X% driven quarter. The by offerings, chain business market NSO and growth increased in will temporary offset first for be stronger and product sales has NuVasive rectified combined trauma development teams. and supply growth partially penetration our growing this tenured the that our and been The potential trauma

is XXXX well. exceeded progressing synergy creation to a Integration as value accelerate our We targets, return we're and able and result. shareholder

expand product offerings NuVasive markets, synergies, in to implement growth. our utilize integration, international we're There's production external for vendors for existing great throughout from drive fortunate implants, and continuing leaders building common our and deal future platform teams, such cross-selling. our X year in-house strong progress For the our to been and a we're driving to of systems realizing synergies consolidate a world have

its complementary our We solutions data while Globus' strengthen Corporation few be transaction space announced Their of other of weeks compete strong and Nevro leverage spine spine We to current best-in-class further agreement and a this customer Nevro and uptake scale and benefit the that beyond to surgeons. accelerate will definitive $XXX business. we technology in our portfolio cranial, penetration superior spinal base billion sales our market continuum grow. patent into of more to standard mining, will our to areas Nevro A team technology see solutions market an differentiated can $X offer ago, an reach of care the able and dedicated for an implants, acquisition their us application can expands to potential our already suite portfolio The while clinically shares as can purchase musculoskeletal for offering. in of penetration high-frequency The all-cash spinal of technology, our believe drive neuromodulation for to team million. adding innovation market, move next-generation our additional high-frequency has to technology. musculoskeletal enabling alter the expansion our force current care offers patients. our approximately all and existing for

investments into to development, the cash flow cash accelerate profitability the and future future business, product for improve will product and Globus' infrastructure existing Nevro investments generating Nevro expand neuromodulation and existing in of will reach more strength financial growth. Globus' combining

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

thank to this. the year incredible your musculoskeletal and want the dedication everything world. the the we company We and have delivering to Globus preeminent our in at realize to an pathway support, for need furthering technology worldwide team I becoming fingertips

I will now Keith. the over turn to call

Keith Pfeil

merger position quarter, and combined the We capped September Operationally, fiscal following fourth cash us helping meaningful financially complete year to out integration Dan, cash NuVasive. overall XXXX free and with achieved key while as profitability flow, XXXX Thanks, successfully the closed expanded sales a strong we we good build objectives helping we year. off on afternoon, to with our everyone. record with first growth along continue execute our

income and on X.X% Full a revenue billion, growing as-reported currency diluted constant fully $XXX basis expenses. of forma costs year Pro basis $X.XX X.X% and XXXX includes was pretax basis. XX.X% as share per an was a currency well on XX.X% sales constant was growth $X.XXX on million million, an basis. resulting merger restructuring of in Net acquisition-related on and as-reported $XXX.X as earnings and

income cash a $XXX.X share, record by in loss. prior diluted stock-for-stock EPS an million, adjusted fully flow. impact XX.X% results a by foreign generated the currency the and million headwind count, share per EPS $XXX.X a driven EBITDA EBITDA non-GAAP free to Included and of representing in non-GAAP merger. non-GAAP which delivered $X.XX we Full net Non-GAAP year increase is fully year to the year unfavorable driven of growth was despite X.XX% adjusted was approximate diluted earnings the over $X.XX full XX.X%, XX.X%

constant fully Moving 'XX as-reported $XXX.X the fourth basis one sales over growth quarter diluted in growing prior year quarter income quarter. in the was XX.X% prior share. on quarter, XXXX a X.X% resulting million, net day prior currency revenue on of X.X% the Day quarter. QX our with selling more GAAP adjusted million, growing year fourth was over X.X% and $X.XX earnings basis into as an the $XX.X per year quarter, Fourth was compared of the to

per non-GAAP QX XX.X% resulted was million, adjusted XX%, QX income was prior the and of net we 'XX earnings in $XXX.X which growing generated non-GAAP EBITDA year diluted $X.XX over share, driven fully free of Included flow. headwind an X.X% in and loss. EPS QX unfavorable is to by approximate $X.XX million $XXX.X impact non-GAAP record an EBITDA to adjusted FX results our a cash quarter.

for the quarter. fourth reported X.X% Musculoskeletal $XXX.X compared XXXX quarter million, of sales the to prior as were growing year

revenue the compared by driven XXXX revenue which overall growth, businesses offset as Enabling $XX drivers growing quarter, year lower XX.X% by of million, during Our units net sold lower QX U.S. were per capital by quarter. and to the driven the of record international case. was primary was spine prior Technologies neuromonitoring partially an revenue

by U.S. versus tech, into as partially U.S. the revenue million, quarter. by offset enabling growing spinal growth Moving the The prior X.X% the reported and lower revenue basis was geographic sales. currency for QX $XXX.X primary neuromonitoring spine driver implant business. International constant driven X.X% year quarter 'XX being on trauma, million, drivers fourth with and revenue. was reported as the X.X% growing $XXX.X are a

driving As Kingdom, Dan Italy primary noted United growth include and countries Japan, earlier, the Ireland.

in merger. was XX.X% lower improvement step-up was as impact quarter to related as in in quarter XXXX XX.X% freight we improvements GAAP amortization gross XXXX inventory offset by quarter. as of by NuVasive improvements profit expenses in which the step-up prior excludes the as The which of year XX.X% inventory operational fourth higher year amortization, write-offs. gross profit, operational versus well to spending was of the lower step-up partially XX.X% was prior driven driven the last quarter, fourth well compared incurred the quarter amortization. Adjusted the The by other

compared in Full the predominantly result driven gross of was the costs product in step-up GAAP the year was a of full of by inventory XX.X% year. year higher inclusion as decline a XX.X% of The gross driven gross XXXX profit to compared inclusion year. and amortization months profit by only prior to consolidated year. again X was the NuVasive inclusion of in prior full adjusted the consolidated XXXX in year XX.X%, the results results year XX.X% the NuVasive in profit in versus compared X the to Full prior months

are NuVasive than legacy mix costs higher Globus reminder, a of primarily cost higher a production. As outsourced by driven product their

full XX.X% shape. improvement to year excellence. we be our of efforts in gross gross the business, to take to insourcing to margin adjusted be in-sourcing representing driven our by begin remains ahead to XX.X%, Looking goal long-term to XXXX our expect XXXX, range step compared adjusted operational as mid-XXs a manufacturing It and profit

the to and spending million development Research sales decreased $XX.X QX X.X% were savings sales quarter. of headcount in prior $XXX.X year. X.X% XXXX to $XXX or research R&D, driven and X.X% Full million X.X% reflective the synergies. of is and or sales prior realization the within development spending $XX.X expenses or by were in in of expenses year of sales lower cost compared year compared or operational of million of million The

and includes quarter. R&D research spending an acquisition of million first Our XXXX $XX.X related to our in-process from development

increased was Excluding the sales $XXX result by of decrease spending to NuVasive increased that for a achieving of the million year. of R&D of to year, full as in objectives. primarily The the The percentage acquisition, resulted expenses. is integration personnel-related as sales driven which X% XXXX synergies a realized sales compared or due X.X% in inclusion or expense dollar prior is of $XXX.X million cost

R&D Looking sales. X% in to range the to expense of ahead to be net XXXX, of we X% expect

$XXX year the of increases the NuVasive is expense. cost to figures, SG&A $XXX.X commission synergies, spending third-party realized were the lower million Full XX.X% year costs, compared million of is $XXX.X year. in by prior or as were third-party sales or sales year-end of compensation XX% or driven in which expenses as professional year primarily inclusion or expenses full a sales by the percentage The as as by increased decreased of fees costs. sales sales of the XX.X% from The cost to million quarter. higher offset XXXX sales. partially legal partially compared realization quarter as sales million and driven of higher lower sales offset spending of were percentage in $XXX.X of expenses, prior consolidated SG&A impacts in well XX.X% the spending and in resulted reflected rent a These synergies service increased personnel-related by fourth

GMED we to business XXXX, range to in XX.X%. expense our be base XX.X% to of expect ahead Looking the SG&A

is in the nonrepeating XX.X% windfall by The the and stock negative driven was prior credits year quarter quarter. tax in as higher X.X% charges tax rate for well current year quarter. benefit acquisition option decreased compared quarter The in rate GAAP as year fourth prior the the to favorable

XX.X% our the XX.X%, Our our XX% the was to rate in was QX tax XX.X%. quarter The non-GAAP state non-GAAP was tax tax prior while year rate in non-GAAP 'XX predominantly taxes. of our rate was full compared On a tax increase driven fourth GAAP year. rate basis, by higher

ahead expect XXXX, XX%. non-GAAP Looking to we tax rate approximately be our to

is volume were was records increased Full at operating and spending and more synergy both respectively. million flow sales well modest operating The free and cash million. driven year and QX working as operating a as impacts $XXX.X million, by 'XX XXXX capture $XXX.X $XXX.X related at free record $XXX.X million from improvements. and cash flow free cash well also flow as disciplined integration to and the higher as capital cash

to cash and over liquidity. Shifting

share $XXX.X of equivalents related securities year cash $XXX option $XXX compared XXXX, million from improved unsecured driven million by Our against and cash, as share mentioned, million were December as XX, at our proceeds authorization. short-term free repurchase and open is XXXX. cash primarily higher offset position marketable the partially end. credit had net line We The cash prior December purchases previously flows, at our stock to exercises, no borrowings by to XX, increasing

development, while which XXXX. near-term allocation M&A, we our complementary in down, cash inventory and and XXXX due Looking off $XXX focus strategies. beyond capital expenditures our pay March aligns pay plan is in product go-forward notes internal will our with which on convertible facilitating Separate in the investments of debt priorities ahead, totaling to million, senior for capital funding of

will share capital deployment, utilize intent to primary remain Organic within and we inorganic will repurchases though investment continue structure. capital for the our

We and on $XXX.X expenditures to X% repurchases sales XXXX. be open funded our on be expect share of cash XXXX. of have Consistent we in in authorized to expect our And December share the balance we X% any using repurchase capital range XX, at to million with lastly, history, program sheet.

As NuVasive third we XXXX my in related quarter out the with call. earnings close synergies consistent comments XXXX, and merger our remain to enter

We in X approximately have million merger post $XXX realized close. over achieve XX% expect year years the full first and to

year We the expect in year remainder XX% to and X realize X. in

XXXX, company share still for X, acquire per closing approximately the to regulatory agreement This year-end, that $X.XX million. Nevro and conditions. entered or deal $XXX an customary February on to other to Subsequent announced into and Corp shareholder subject it is approval

expect deal purchase and acquisition close sheet. to we our plan the of this We price late on to this second in cash with fund quarter XXXX, balance

Shifting to diluted and guidance Medical earnings billion billion, guidance. year $X.XX $X.XX per to non-GAAP On $X.XX range basis, full $X.XX. to a its reaffirms of Globus fully stand-alone XXXX revenue share between

we which Medical Following of between to $X.X billion Globus Nevro acquisition, per the non-GAAP diluted sales the late the to XXXX anticipates fully $X.XX close second consummation earnings expect share quarter and to Corp net $X.XX. XXXX, of $X.X ranging in billion of

second accretive the to earnings of operation. We be Nevro year to expect in

together, Looking driving launched We back in achieved and on spine well meaningful We successful growth systems significant XXXX, products. fast portfolio. a and integration. the we leaning as as new and across redundancies in cost in brought were eliminated sales towards

translated well of as and sales All cash generation. growth this strong into flow profitability as

pursuit top operational commitment of focusing will trends growth. dedication. to while for of while accelerating continue line their our we you integration more and to Thank our these XXXX, and manufacturing In on distribution, employees seek

further a to our seeking customers will listening by and in competitive We to marketplace. to continue innovation drive win

care, Our our and the as to introducing improve continue for from excited by excellence. products pursuit remain while challenges meet future we the help well We Globus succeed that competition. the differentiating of are relentless the us suited of market musculoskeletal employees to

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

Operator

question first comes Chopra from Our Instructions] of Fargo. Wells Vick [Operator

Vikramjeet Chopra

there. for X the me. one I'll throw out first

target? the right announced market talk why and time the enter a right SCS to Nevro, for have And the recently this follow-up. On deal was that about just you why the I Nevro was

Daniel Scavilla

Dan. do I'll it's Vik, that.

rapid we enough our depth of So this actually mind actually we have did going a XXXX up of we that that with could with in we're Keep in opportunity. set in with NuVasive, that integration take integration couple things. advantage where

our more that like asset portfolio reaches that And we I there's fact look there will for believe really was And on. way. looks to only that we're into out that. not a well-rounded It so us an it's said, that neuromodulation, in in at development as thinking the while entering asset capitalizing meaningful as and build we're that that frequency beyond with a go interested for high in it but area, applications we into

Vikramjeet Chopra

one And spinal Do all beyond? is, U.S. sale just my they sell you to at implants their international follow-up from this their to in and of your the plan question also competitors large announced expect business of XXXX benefit or businesses.

Daniel Scavilla

look, moves long it's a we of patient lot like needs. still clinical market end created that. there's the in to And the market. waves question. a we made this, I'd we the play the say the driving on At the activity unmet Now the through believe day, focus there's table of game, great going we on that and disruption,

And moves. opportunities using great. of has out And from we're our would we these where will plan we're to going what us approach. going, there, off if our tech we so to while enabling out, But focused make that meaningful there's and nothing our move take on occurred nonetheless, capitalizing innovation stay benefit have, around, can putting things all execution

Operator

from Miksic of comes question Next Barclays. Matt

Matthew Miksic

question and by generation just and Vic's right, on and -- which may in Nevro funded cash have Nevro on quarter, flow To the deal. to fourth numbers follow the the way, are up the year free my congrats, last

a into investments And of programs to are your investment you imaging place -- of this just terms be robot, what in maybe likely is for or transaction, you? would So had in kind -- orthopedic to place Is level, of which have that I compare are the system, it just think if know, be super most to going and your have other that successful. like, favorites in investment of don't have not could a on trauma, that helpful. swing follow-up. context -- you to which put bigger swing then one you similar I But your level

Daniel Scavilla

Yes, investments for don't we would your answer favored and have meaningful are when about And really investment on shift what too. simply, that you yes, question that never see you. I think this talk our would to see no. which take that Matt, thanks we'll trials the But a P&L. of

range and you we're think I going. as you As know investment. to X% X% said, at of Keith that still now we're would see And into shooting even where with this in, factored that

to of that you that, as business. are where meaningfully would we we're into think need far off will really or it not again, There is quicker of I want us So think us spend. certainly of spending how that anything on, up penetration, is track. sets we But which areas type are we possibly going that take as other none see focus as off scale move to get on we we who and

Keith Pfeil

that And Nevro value, paying really back and the business and And if look expenditures perspective, for from that say when capital a I you materially our CapEx to bring if approach of this changes we're base book. couple I I the tangible a add you're compare -- looking think to purchase step on book the top price, could I at our comments. the of basically would don't when business Globus I tangible that. ahead, purchase in price

this getting noted growth seemed what investment long-term Dan we our to business for back an sense the on tying really under make that potential perspective, we what umbrella. from to see So were with

Matthew Miksic

I then question, just here? sense colleague, deep maybe a couple before, same deep of of doing deals executing, into follow-up -- could And That's I just we helpful. the -- there, your the quarters a last have [indiscernible] of in think like NuVasive the how on Are we ranks but to robot get just sense, placements. the we halfway of quarter are been see just Globus or -- terms lift forward?. we what colleague sorry, wanted the last very how going the or I'm And into get kind are of was XX%, XX% ranks robot I the asked to successfully of kind strong so into

Daniel Scavilla

Matt. in approved. have that. I'll Modulus than actually tell you out instrumentation just had Thanks, and getting to really Reline I and say there We would interesting better it ready go, an the it's way,

of but I so a year or in sold always more really said, And we're I think as and at some, character and the the wouldn't you would I to just those. was that penetrate assign of to you're go we've cusp tell We've starting, penetrating. XX% that. XXXX really that

I on that. for think target we're

strength the okay. are the see than that think NuVasive that I in placements lift So year and we will the to we in going this deeper be those in have past,

Keith Pfeil

that. X And Matt, just add to to thing

still see being as back and cadence that, heaviest changing I don't QX that stepping sales, typically QX Just the case into still the from I that see quarters. 'XX. we the mix or get of our capital

Matthew Miksic

Sure.

down working So step then back your sequentially and QX QX? way in to

Daniel Scavilla

Correct.

Operator

of comes question David Saxon Company. from next Needham Our &

David Saxon

on Congrats a the Keith, on P&L. Maybe couple quarter. the

margin year then of some step-up gross to it can throughout the NuVasive in about the looks implies you So like the thinking you in-source should And manufacturing? the just cadence dollars. guidance, talk be it as R&D a work about we

I would that, So to incremental driving follow-up. And have where love is hear what's then I'll the dollar a going.

Keith Pfeil

Yes, sure.

getting we program fairly gross margin perspective, -- machines are remember, comments online the my and that margin is because focused going the would limited. year. some on gross in cadence modest XXXX a So this show improvement I mean in-sourcing from said to be be

which You're build to inventory, in the roll going XXXX. through P&L will

expect to I see So the most gross next expansion year. margin

you'll my remember, quarters to we're again, are modest forward to throughout across but you some XXXX, see business. R&D our move for think heavier into continuing invest in capital. have When investment I year, improvement the with comment, about just As we think as you stepping what quarter-to-quarter, earlier

dollar our in happened. perspective, online, several And As our we came as go about if that initially investing years, those areas dollars always investment from when a plans, our will the investment back we're INR in increase term. shifted bit, little -- other said but going. for But like you think portfolio, kind a our Dan base of you as long we of that concept keeps earlier, to kind

we So drive want forward we're keep right to growth, we cadence we investment going to that opportunities into product that bring to see new now, going. move if market. as XXXX, to And

to we're portfolio. going to the investment So continue drive across

David Saxon

just then And on follow-up Great. deal. Okay. a Nevro maybe the

the And just you talked like? to That that in that? can a for about elaborate kind does potential actually spinal the implant. interesting. see think look I on script benefit sounds of next-gen you Maybe what

Daniel Scavilla

make no. the answer know us, until portfolio. think And product It about where talk we're and and to we're tend you really short at future about developing I we going products don't Thanks. launch. is right we're Yes. our I'll say in what

just data. the beyond into simply this be in out where neuromod there think many can putting things, applicable I'm including note to So

little working nothing but where And tuned, the stay forefront year, so that's still long-term through I those, coming would more a bit on out just say, this makes sense. strategy this

Operator

of from Our question next Jason Wittes ROTH. comes

Jason Wittes

accretive Nevro is how this year, line, of just to that, SG&A of most business first in scale is I assume think year or that? get much simply we helpful G&A. Just how should you sales understand and deal, distribution. improving that on Or after And the terms how first the of the the is how related much it'd that about in and to be that of on

Keith Pfeil

Obviously, yet. deal I also When hasn't business to because at hard look sales come a will think to want to with about at business moving that going cost. the forward, that get Nevro limited we but and closed somewhat profitability. growth, drive scale still some keep I'm point my comments As taking the

growth way with and Nevro at I maintaining fair managing at I taken approach I keep the once closes. look limited. think sales a merger, But costs to think a it it's look when comments NuVasive want we've with to fairly you my

Jason Wittes

the based appreciate that. comparing one from you're never potential dissynergies can consensus expectation I for, on more I what you could if with just there's Nevro closure. if for line on second of I sort just kind in what terms of question. deal? the know quarter related Maybe looking versus I synergies late on push the top comment a -- of don't is some is what assume assuming

Daniel Scavilla

we I'd the and things still et Jason, and have out approvals there in gone shareholder really put we cetera. the closed and one of since probably haven't deal,

Let's now the is get level. pause think kind us right. that off on for that. I just it right to of share it's into timing when We'll

Jason Wittes

would Why business, just I'd just I imaging if unrelated switch question rate for that is, the don't enabling a seeing suite, love And/or Okay. an sort piece imaging buying And to I that's the they that you imaging? the up tech developing mean, buying if full Nevro, what, suite. and suite are take of how of gears what about is buying your of And and more kind you I get sales? of full buying partial are they you to helpful now be have don't ask understanding think simply really mind. who's sort of X products are straight to understand.

Daniel Scavilla

in they acceleration an doubt stand-alone package. mixed. bit And in is no Yes. definitely a both seeing kind We're The of and imaging. a sales often There's of are that. about answer little

total, what It's want depends go in mix It's wants. a almost depends probably I the say, it's not bag. mixed it both when increasing. the would So really have really customer accelerating, to of through. unusual it's it they it. just And just on on

So customer good what the wants. on it really position. depends again, But just

Operator

Singh from question RBC. Our of next Shagun comes

Shagun Singh Chadha

me. X guess I for

Is market? on it with those? do The be you it recent And What commercial the first Is your you assessment successful company has is Nevro. market quarters. Is can SCS why in think had asset? it some challenges focus? the of caused in this the just technology? The was the what

M&A. And on focuses the just question then second

point you interventionalist. the this to call M&A you expect acquisition your more expands we to do fill give does to to I to point? Should that -- call back think the cater

Keith Pfeil

the I over I market say we and about the Nevro hasn't as the last it, market probably you -- the say there. think I Shagun, can market with fast do think mean, would would couple when we years. never grown what that of as is

into think for creates really I business, under our it to larger our spine opportunities bringing allowing umbrella that get it us. and

my of in. scale are key strength our from those would sell helps balance drivers X I some maybe say think perspective. I our and to the that these sheet also of products

Daniel Scavilla

I'm Yes, with to going that. agree

be needed did worked I they Obviously, to think invest. and they there's couple do they of how selective things. could they a where in what and

little and a there's think had hesitation market bit some of on have them. viability size may I with that impact

making that as our we're with go use going said, to and coming we're and clear them. balance We believe and it that our high-frequency Keith think scale it sheet, push I in technology. we're into this the to is way

really So do I looking think we're over to coming. what that's

first, to building it's part again, To But right look is we're and place may decide out. first, or of radar that. fill it as I do that want if tell you know size I then second get scale we we'll this what what versus answer anything internally have occur now. this on question, your we in certainly don't get of that. would we the to would we nothing for let's the do possible it inorganically have evaluate meaningful to And

Keith Pfeil

passes, comments I And still. we as -- plenty growth will us become a time Dan's organic would of but and M&A growth is, we as portfolio Absolutely, business, think of see there Shagun, about thing part internally add of bigger opportunity our innovation. to I the to see are opportunities Globus drive organic the plenty sales for only

Operator

next Our of Caitlin Canaccord Genuity. comes question from Cronin

Caitlin Cronin

on Congrats great quarter.

the with to is to And your interventionalist Just portfolio? to paying decision that, to joint the the for their call how touch company? Nevro, portfolio SI on joint important current acquire SI point your access

Daniel Scavilla

say of great valued level any it question. out would even significance driving I was with that a we or is it It's this. not a something while force interesting,

I before approval to we or it and of not But the the force we go is, said it's And offerings the the have And think already truly further get think a question a bag driving SI some through I reason get enhancement. to again, joint. see. deep evaluate to enough have it would this can We with deal. where we'll drive out? great this again,

Caitlin Cronin

touch then it. on how just beyond? the what's strategy Got going? And And QX, XXXX is ExcelsiusFlex, launch which commercial and launched the the in in

Keith Pfeil

keeping mentioned point. comments at this fairly Dan brief that the

to market obviously, we meaningful But earlier that a go it. crawl event. it. we that's see me XXXX that to calls, had We're that and is we to sell something will As of don't we That more sell begin But we It's into a part XXXX, working run. in start as still being to passes, work said revenue time walk is out. XXXX. of to a This see in effects. cumulative will

Daniel Scavilla

to go. -- the did to just would is a go this, to depends too, with I get willing we're right? it on to what add perhaps similar Spine what options we of And with to is, we'll customer And what offer very people and do that, for variety out really so

Again, and And pretty as feel a us out can our things. good. around sheet so help of that But continue we balance I implants to the well strength of those all do lot the go strengthen flesh that. of

get make market. procedure we And of those implants to so and a these to have still some holistic implants, of approach it's up more in scale the sure up and with we robotic the new uptake finish

Operator

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

Craig Bijou

a interventional to And to just docs, business. questions, picture the a as want noted implant I pain access we bigger their Interventional Spine Obviously, you're in sell other start perspective. Spine and Stryker but from was with going of the to business specialists. So have couple maybe saw Interventional Nevro, retain

wanted the spine those some on So channels happens the out the play conversions XX to that And get surgeon next guess, thoughts Dan, and X, is I the if there X over interventionalists? time or years. your over how I in convergence

get to want Just thoughts your there.

Daniel Scavilla

Craig. Thanks,

more signaling that have asking, step clear into potential this. And that's from core ability high-frequency that. that pleased of do I throughout. there's there's for can I procedures to not think the we're always shifting a our what come, it the what that longer-term you're as were always interventionalists with may really Remember, do. that. said, like spine And with or anything that we away applications technology We're

for get here. so on the we're we we right our reason see in our And what was focus mean now, then never. It's approval, the right And doesn't have, we see this, really shareholder mean main get just from the purchase expand It make let's future. not. doesn't sure past maybe could capitalize that It now. there,

Craig Bijou

Got on it. bigger That's helpful. market. maybe And the spine picture then just

spine bullish thoughts -- 'XX, still for you you ended enter year the Your strong. on market the are the the as market prospects as pretty

where you thoughts it and your just beyond. on see next maybe going So year

Daniel Scavilla

it I answer or single accelerate up no. right? continue strong My to you a will Yes. it digits? know, high Do think year. I And as was it's a always guess, some into is think get

X%. it long that on trend around it. has And that I around term. it over eye of some again, I will over period think been keep somewhere the But think historically time, our

and I it in and low go that's look our look this kind of is we think the as point that things. at know assumption still is, to we its is, through to main I'm it few. back look historically year those going it, single-digit the to set our outpace and the the upcoming at and regardless what as of of we in But expansions growth through investment innovation goal the type

Operator

next from Matt comes Our Jefferies. question of Taylor

Young Li

and I conference. implants first the portfolio for Matt. wondering knee hip can Should your at you at with upcoming. a guess ASCs see the was related more that, And comment conference. we question are of on expect robot a little to of I to AAOS Young and the topic talk the kind if hot bit ortho

the bit you prop If about little in the a ASPs robotics and can for for for spine comment what's spine. ASP value

Daniel Scavilla

approval. So will our and bigger bag with the that moved we've bigger we through to a technology AAOS, a presence have now yes, we have

have the to been some get So in that there. you do of of we that able see or we past will as more than

ever little Your XXX%? answer ASC be bit The is grow? spine to it's it more hot I the know question, continue a right? expand and Will on they Unlikely. side. Will topic, yes. a

and we just offer so, where understand hospitals bankruptcy and in at or and get not is. where that patients have think I doing to, for to look value to to create it's hospitals disrupt going

the what sense best day, there. in So thing just the tough to of, And be do you perhaps are only growth nor we thinking number go away, middle the these to surgeons go. And where where board going to again, over people through out or patient ourselves is, the with be will, think to understand becomes and similar less to at if call it makes see are even joints it than what where But balance is, to of to the care it's end we're goes we're with that think. the support the landing. work that as out because that, all not we with we ready positioning kind to

Young Li

also if it. guess Okay. the about the of product. some quick product navigation curious was model a on I talk headset of benefits and economic for key that can the Great. Very follow-up you I helpful.

Daniel Scavilla

Sure.

as hub. application far with model, As and will robotic economic have the work eventually it's the really well. as it going to main That's thing,

your on So patient ability, we as data, its of looking sight lightweight is ability go through more on thing off beyond to screen. The opposed line flow through to main the just the that. to be directly going a to

also that things a like them are going tool if operating see It And way. table. you out great the that can who because the One you fact with around creates to actually eyes someone you're people cameras, through the is their what they're teaching, teaching really of I directly those well. seeing help as have interruption less with it's is

a help So line comes as to great has of not it. blocking that it's then can a I teaching you think tool visualization cameras. lightweight. got deeper into it's teaching really get to have useful as And when the ability with It sight. It's institutions itself, it something we become better

with to along tough up really looking people other them. thing to with think put different there's we'll be of sell I out to hub, course, that's And the "for we'll if But to to consider package, and purchase". do come now, right main is going model it. And Economic the that reasons not a we're explain.

Keith Pfeil

really really is we customer to complementary be the with to existing lease, ramp it ability the that capital. sell have can way purchase any but do We a will looking it in do,

Operator

of comes Securities. question Richard next Truist Newitter Our from

Unknown Analyst

$XXX the million. Ben is XXXX range, the million to acquisition This including Rich. see $XXX for EPS that I on is

to range? if may drive you bottom So either I'm that of considerations that can wondering talk about or the top the that some

Keith Pfeil

question. the late to of limited. keep going second to Again, I half quarter, back it the back expect That's the we comments we to or half in the second great close noted, that fact a go the my back I'm quarter.

cost it the you one, back go to the assume guidance to, the our number cadence. going range, sales comes overall are modest that implied So combined driving of our should along of about really really sales as I'll think get ability structure. to better well -- that as growth guidance. leave From sales as comments control or standpoint my there the driving you retention

Unknown Analyst

more. one just And

there's know is your on matter. internationally manufacture I tariff any So of some exposure companies on what discussion have potential you that business exposure or the medtech been whether throughout for thoughts And wondering a there. I'm

Keith Pfeil

in U.S. XX% is U.S.-based exposure Roughly Our are the or sourced our products of limited. very

assuming So is exposure any to for that's XXXX, extremely and XX% XX%. tariff cost structure or immaterial our

Daniel Scavilla

the long-term more well. of instrumentation implants to add opposed even X% other as or is as disposables I'd

it So risk further the down limits that even see. we

Operator

O'Brien Sandler. with comes Our next Piper question Matthew from

Matthew O'Brien

background Sorry noise. about the

getting pushed be bit maybe still to just and Nevro margins out EBITDA is it Sorry to were this Is said overall kind have the that before investment? investments Or of with just to back the about to talked made into you mid-XXs little expecting this the But products? for way, you horse. keep updated the you you if of another put profitability business. get there, can we what versus going side a beating on that Nevro possible things, all

Keith Pfeil

that's on profit, the fold. with getting great bringing question, back prepared even that's would Matt. gross mid-XXs focused goal, our still comments, I My I to say Nevro into a

I margin profile margins. gross pretty can well we up their enhance and ours, improvements think to operational drive we lines think with

is SG&A to big the really, continue something spend. So at thing we'll I time examine look as that's passes. And

overall little move really company, we a bit our of But would towards grow it focus our say mid-XXs wouldn't goal. more just EPS a growth. as shifts I as off

Globus driving expansion of achieving maintain term, synergies that focus get additional structure. falling of bringing next fold majority to profile back is mid-XXs. that and it year, think EBITDA just -- year as that so historical comments the again, merger, the Nevro spend next on, high to relates profit in-sourcing some I can and and we the on into NuVasive the a the the near their gross But it really then I made in

Matthew O'Brien

said force sales close being you had out we then combined confidence of mark. you you bit something And that a that -- past dislocation question year Understood. sales Or I you there's But NuVasive retention commentary more retaining the that of all? better that move for the or in know force still little see about know Dan. best I there from Is after the you new a just concerns just as hires. deal. than seen about move of some have of expected? is your rep that these X-year reps at Maybe lot a a could

Daniel Scavilla

and there. retention were put And rumor was their than that was I lost we too, been but doesn't less anticipated. has people, That that an odd question. great that a haven't if actually back, there some folks it's special remember, great. It over time. we something thing, Yes, you out guarantees all expire would doing that on talked not a while it's have mean was These it's are out everyone

and structure me the boy, where sure extensively the great I've out up and high. set was out really been is that to country good retention they to traveling with are. Thanks leadership The the there. feels

can be products think great. of I putting hands the new in XX reps

a when a with those and of come that thing. products And is think even when I and they good us did see lot brought that here them more the future into we and the powerful. we compensation NuVasive helping increases look products are

understand the really this think of choice. that is I folks destination

So I feel about good it.

to I a can see we're they coming look getting competition think lot up with of if at why us and also sign that's in us.

So, it's on don't it. great. been doesn't keep It mean our so eyes we far,

responding there, respect to those to to I they be us. our are We have so and do. who they us. earn and we're We work seem best great they But people and and to with far, keep them doing keep them what think

Operator

question our from And next of Oppenheimer. Steve comes Instructions] Lichtman [Operator

Unknown Analyst

first are XXXX? as This on are have deals is, towards customers enter guys seeing seeing X changes rental any increased question volume just in I My appetite you is And questions. any Steve. you as shift purchasing you Amir in the for guys or capital for

Keith Pfeil

is Keith. great That's question. This

about capital high to that market a a cycle, cyclical watermark of I see It's got made think the I I long question, to QX Earlier, the months capital As statement remains we nature -- X XX being capital. a QX a the with I piece the appetite, still strong. still right selling secure and think of a really quarters. robot,

terms acquires purchases our vast In XX buys they a still of the are how outright to pay terms days. XX the majority capital, on customer of where

about As of we sales can think rent, we offer capital, ways purchases. arrangements. outright I but the the have to ability volume-based we still I other vast lease, mean market, can can match do are we our to majority the

Unknown Analyst

of sense of the components a give for one guidance just major sales the my us Keith, on Dan, last Can one segments? this by you side. year

Keith Pfeil

No. and can for at Nevro lot is. my a business with Globus base the you get pending considering We if look view historically year of remarks, we I implied look think with parts and overarching prepared even you in the and where guide good guidance our acquisition. pieces, of back business really moving a We're comfortable And haven't that. done aggregate. our at the There's the

Operator

Our of BTIG. next from question Zimmerman comes Ryan

Ryan Zimmerman

you me fitting Appreciate in here.

a of for Just questions couple me.

'XX, forma hovering the digits, a in this on forma spine a Dan, arguably through I the mid-single basis, we're low business year with pro single of think about market. spine pro basis, think I on kind digits line

as it be you're within understand Globus, to of business it. is get Street if there's is the modeling maybe the do just accelerate NuVasive. of portfolio. support the spine like surgical trying be I higher fact a of dig I'm where under-indexed this, of didn't you're U.S. 'XX, what the now and neuromonitoring of I'm bit I'm cervical drivers growth with you in have simplified directionally legacy biologics guess do you little that Now particular and you to sure aware areas a -- it talk of rate kind into some can business can that feel a and NuVasive with kind or within wondering from and in number spine, subcomponents about you that the and some legacy you

Daniel Scavilla

and fun I'll biologics. the could True to stuff answered think as but thing, of just is get lifts. one X they're the And you, is we of question up the you things Ryan. do there move lot further Long I of a tell in, under-index we easiest in that

that So ones. X probably would be of the

so not the much, mean And out over called more over. by you areas the other into that, Globus monitoring neuromonitoring coming projects. coming The NCS I neuro

a I to say way. cross-selling that call and that we great that's think that do out opportunity there's it

job think and stuff a I there. incredible I out better making focus that fingertips, the we deformity stronger launching we that assets that, this the on together think we our and all just have in have putting more to pediatric powerful, coordinating at of do have making

those there. is that year. X those getting create things we've are I biggest as strong capitalizing all Truly NuVasive we into think us things things, accounts, of emerging said, for focuses lift the always into tech, those the on think of really I cross-selling kind this as I year. honestly, this walk of are one And for coming great think,

Keith Pfeil

thing add we more to capital navigation only put really the as back goes Dan's we a continue Enabling comments there, the now. we out to to Tech I'd robot, is have And have

imaging. have We

suite help there's should those future of sales. launching facilitate So and products of programs successfully more a implant

Ryan Zimmerman

Right.

That's for me. then, And Okay. Keith, fair. X last

last What's think about that 'XX? and about the that's in XX%. in in-house move -- just as still that external to consolidated synergies, going year vendors manufacturing, X that talked you commonalities, targeting maybe about where we have you're strokes, XX% the even do your broad X opportunity You be

Keith Pfeil

Yes, you're bringing on expansion you're margin the really going to -- year in-house. the bringing products year, gross focus this a question. gross because, Year in-house expansion X, rate X margin the it's again, machinery great is

create that build you its 'XX, benefit back to in a start will should working way see As that, you 'XX. P&L capital in the to

Operator

next Matthew Stifel. Our of Blackman comes question from

Mathew Blackman

was in P&L fourth I'll I quarter? Basically that $X.XX, on? some is just there math there FX. range. there the incremental of annualize be you get to just of Keith, and do else end standalone I asked FX onetime leave the included something your said the EPS it I which headwinds. bottom missing XXXX something? EPS appreciate to one. might But XQ $X.XX going Am because I on of dumb anything think

Keith Pfeil

write-offs prepared gross you're SG&A, on some little point. we remarks point, And That impact. the we inventory. my worth higher talking had tenths I a of probably That's a in But in that some was expense. bit again, a commented have a in of debt X margin. higher bad couple points in down aggregate, X.X of drag of

Mathew Blackman

it roughly much again, And a bottom gets revenue to Okay. capture it's times -- doesn't $X.XX. I you appreciate seem wouldn't have to X, $X.XX but end incremental not But or linear, assume synergy growth.

bridge Just from help about the where... me understand what I'm missing

Daniel Scavilla

-- We're quarter. think asked you year When X about here synergies. because I where comfortable sitting about the we're with

X. continue I and about question, We to over X, said, The million feel year drive line bottom earlier to And line. where feel saw. other the overarching, There was want we're with year on -- profit see in positioned headwinds about for expense the We going top going like I bankruptcy into achieved year good it's confident the And X. execution. still drag the early. earlier year. the further gross drove where we're per earlier we we in year X that's But year. I to mean We're out years, expand SG&A year, it's you really, expansion. that we there's good them. If that in Steward $XXX confident synergies next a feel of

Operator

Thank now that and you questions, further for may no Globus With the earnings disconnect. concludes Medical participating, you call.

Globus Medical (GMED) 20 Feb 252024 Q4 Earnings call transcript