Snapshot
Globus Medical Inc reported $745M of revenue in Q2 2025, up 18.4% year over year, with diluted EPS of $1.49 and an operating margin of 10.2%.
- Revenue
- $745M
- YoY growth
- +18.4%
- Diluted EPS
- $1.49
- Operating margin
- 10.2%
What management said
- •I also want to take a moment to thank Dan Scavilla for his contributions to Globus, as well as his guidance and mentorship to me over the past several years.
- •The growth and evolution of the company remains second to none and highlights the strategic focus of living its mission.
- •In short, I want everyone joining us today to know that Globus has many opportunities in the pipeline to fuel future organic growth and remain confident in our position within the market.
- •At a top level, Globus delivered Q2 sales of $745 million and non-GAAP EPS of $0.86 per share, growing 18.4% and 14.1% respectively over the prior year quarter.
- •Free cash flow was $31.3 million, growing 18% despite the impact of the Nevro acquisition, as well as higher CapEx spending.
- •Our base business delivered $651 million in revenue during Q2, growing 3.3% as reported and 4.9% day adjusted versus the prior year quarter, with one less selling day in the U.S.
- •We will continue to ramp up our supply as we enter the back half of our year to accommodate for anticipated growth, including the normal Q4 seasonal bump.
- •Every week in Q2 had shown growth versus the same week in the prior year, and we are now at 19 consecutive weeks of U.S.
- •spine implant growth, which includes a strong July and a great start to August.
- •All of these factors are key to growth as we continue on the basics of launching new products, growing our sales force, and driving robotic pull-through.
- •As Keith mentioned in his prior comments, on April 3rd, 2025, we closed our acquisition of Nevro Inc.
- •Our Q2 2025 results include three months of legacy Globus financial information and three months of Nevro, reflective of the April 3rd acquisition closing date.
What went well
- •Q2 sales were $745.3 million, growing 18.4% as reported (17.6% constant currency), with record non-GAAP EPS of $0.86 growing 14.1% over the prior year quarter.
- •U.S. spine led commercially, growing 5.7% as reported and 7.4% on a day-adjusted basis, with every week of Q2 showing growth and 19 consecutive weeks of U.S. spine implant growth including a strong July and start to August.
- •Enabling Technologies revenue of $35.2 million bounced back, growing 58.5% sequentially over Q1 2025 despite a 4.4% as-reported decline.
- •The Nevro acquisition closed April 3, 2025 for $252.5 million in cash, contributing $94.6 million of revenue in the quarter and finishing near adjusted EBITDA breakeven.
- •Legacy Globus adjusted EBITDA was 32.3% and the company generated $31.3 million of free cash flow (up 18%) despite the Nevro acquisition and higher CapEx.
- •GAAP net income was $202.8 million including a $110.6 million bargain purchase gain, and the acquisition brought $141.5 million of usable deferred tax assets expected to generate cash tax savings over a prolonged period.
What went wrong
- •Enabling Technologies revenue still declined 4.4% as reported year over year and continued to be impacted by extended timelines to close capital deals.
- •Base business growth was modest at 3.3% as reported (4.9% day-adjusted), affected by one fewer U.S. selling day and two fewer days in Japan, and the prior Q1 was described as disappointing.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Total revenue | FY2025 | $2.8B-$2.9B (restated with Nevro after Q1) | $2.8B-$2.9B | reiterated |
| Non-GAAP EPS | FY2025 | $3.00-$3.30 (restated with Nevro after Q1) | $3.00-$3.30 | reiterated |
| Nevro revenue | FY2025 | ~$300M directional (three quarters of ownership) | declined to break out; comfortable within overall range | withheld |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total Q2 revenue | +18.4% as reported (+17.6% constant currency) | Above-market U.S. spine growth, enabling tech bounce back, and Nevro contribution |
| Base business revenue | +3.3% as reported (+4.9% day-adjusted) | U.S. spine growth offset by fewer selling days in U.S. and Japan |
| U.S. spine | +5.7% as reported (+7.4% day-adjusted) | Set/inventory availability, product conversions, competitive rep hiring, and surgeon engagement |
| Enabling Technologies | -4.4% as reported (+58.5% sequential) | Closing Q1 deals drove sequential bounce back, though extended deal timelines persisted |
| Legacy Globus musculoskeletal | +3.8% as reported | Driven by U.S. spine within the legacy portfolio |
| Non-GAAP EPS | +14.1% to $0.86 | Record EPS on sales growth and synergy execution |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Leadership transition | Dan Scavilla as CEO | Keith Pfeil promoted to CEO effective July 18, 2025 with Kyle Kline as CFO | transition |
| Enabling Technologies deal timelines | Soft Q1 with extended close timelines | Sequential bounce back but still elongated timelines; majority of robots still sold outright | improving |
| Nevro integration | Just beginning cost and efficiency programs | Near EBITDA breakeven; large headcount actions taken at end of Q2; sales force energized | early progress |
| Manufacturing in-sourcing to mid-70s gross margin | NuVasive synergy plan of $170M, year-three gross profit expansion | Inventory on balance sheet to flow through P&L in 2026, driving expanded gross profitability | on track |
Q&A summary
How is the Nevro cost and efficiency program progressing, especially on the sales side?
Keith Pfeil said leadership has surrounded and energized the sales force, the Globus approach to third-party spending showed early benefit, and the large cost actions occurred at the back end of the quarter, leaving him cautiously optimistic with a long-term goal to grow the business.
What have you learned about the robot pipeline and how deals are closing?
Keith Pfeil said enabling tech bounced back in Q2 by closing Q1 deals, the elongation in the pipeline persists, the majority of robots are still sold outright, and he does not see deals being lost to competition, viewing Medtronic as the number one competitor.
How does the path to EBITDA accretion reconcile with finishing near breakeven without all cost measures?
Kyle Kline said they are not targeting impacting sales but there is risk of bleed-over, and with only three months of ownership they want more time before declaring what accretion looks like by year-end; Keith Pfeil added there are still six months to go before 2026.
Is double-digit enabling tech growth still possible this year?
Keith Pfeil said the back half of last year enabling tech grew about 25% (around $25 million), so finishing double-digit this year would require about 27% growth, which he called possible given the pipeline; Kyle Kline agreed it is in the realm of possibility.
What is the cadence to reach mid-70s gross margin from manufacturing initiatives?
Keith Pfeil tied it to the NuVasive synergy plan where year-two manufacturing in-sourcing drives year-three gross profit expansion, with lower inventory investment flowing through the P&L to deliver the benefit largely in 2026; Kyle Kline noted Nevro at ~66% gross profit will be addressed after the base business.
Were the Nevro NOLs part of the original deal calculation and what is the timeline?
Kyle Kline said the NOLs were not part of the original calculation and are not P&L accretive but represent cash tax savings, with the $141.5 million flowing through over an extended period in the range of 40-50 years.