GLOBUS MEDICAL INC Q4 2025 earnings call

Thank you, Dana. Thank you everyone for being with us today. Joining today's call from Globus Medical will be Keith Pfeil, President and CEO, and Kyle Kline, Chief Financial Officer. This review is being made available via webcast, accessible through the Investor Relations section of the Globus Medical website at www.globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements.

Our Form 10-K for the 2025 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. Our SEC filings, including the 10-K, are available on our website. We do not undertake to update any forward-looking statements as a result of new information or future events or developments.

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

Thanks, Brian, good afternoon, everyone. Momentum seen coming out of our second quarter continued and accelerated as we progressed through 2025, resulting in a record Q4 performance. Our team delivered, showing great poise and determination during a period of growth and change. I'm proud of our team, I'm thrilled to be here today discussing these results as well as provide insights into the future. Focusing first on our top-level financial performance for the full year 2025, Globus delivered $2.939 billion of revenue and $3.98 of fully diluted non-GAAP earnings per share, growing 16.7% and 30.8% as reported, respectively. Full year 2025 base business revenue, excluding the contributions from Nevro, grew 5% as reported, with Nevro adding $293.6 million in revenue for the full year.

Shifting into Q4, revenue totaled $826.4 million, growing 25.7% versus the prior year quarter, while non-GAAP EPS finished at $1.28, growing 52.1% versus Q4 2024. Digging into this further, our base business revenue of $726.7 million grew 10.6% versus the prior year quarter and included double-digit U.S. spine growth, as well as record Enabling Technologies revenue for the quarter. This performance serves to underscore my opening comments on the growing momentum in our business. Looking at the second half of 2025 versus the second half of 2024, our consolidated base business grew organically at 8.8%.

This, coupled with continued back-end execution, helps propel us to our sixth consecutive quarter of adjusted gross margin rate expansion, as well as returning the base business to mid-30s adjusted EBITDA, finishing at 35.7% in Q4 2025 and 33.4% for the full year. When we announced the NuVasive merger, we emphasized its compelling financial profile for shareholders and specifically cited our focus on delivering mid to high single-digit sales growth, as well as a mid-30s adjusted EBITDA profile by the end of the third year. Our Q4 and full year 2025 results demonstrates our performance against those objectives. Our U.S. spine business grew 10% in Q4 as compared to the prior year quarter, coming off a third quarter where U.S. spine also grew 10% versus the prior year third quarter.

We've seen this trend continue and now sit at 48 weeks of consecutive growth, with this momentum continuing thus far into our first quarter of 2026. We remain encouraged by this early look into the new year. Top to bottom, our spine business is executing. Commercially, we are meeting the needs of our customers while remaining aggressive on the recruiting front. Operationally, we've leaned into inventory and set production to feed this growth, instilling confidence in the sales force while ensuring we can meet the needs of our customers and the patients they serve. Looking across our U.S. spine product portfolio, growth was seen in the quarter across substantially all of our product categories, demonstrating the broad nature of this momentum.

However, I do want to highlight the continued success for our expandable TLIF products, including products such as SABLE, RISE, ALTERA, TLX, MODULIS, and CALIBER, our MIS pedicle screws, including CREO MIS, Reline MAS, CREO ONE, Reline-O, and REVOLVE, and our line of power tools, including DuraPro. Surgeons continue to provide positive feedback on DuraPro, specifically highlighting the ability to cut and remove bone around the neural elements, allowing them to feel more confident in the safety for their patients. Features such as proprietary brushes are helping to facilitate the removal of degenerated discs in a safer, more controlled fashion compared to the traditional methods and allowing them to perform these removals in less time. Overall, our investment in sets and inventory around these key products has fostered their continued growth and positions us well to use these products to springboard additional growth in 2026.

We launched a total of six products in spine during 2026, with four of those launches occurring in Q4, which are CREO Traction, Reline 3D Towers, AMS FreeHand instruments, and HEDRON C-MIS. CREO Traction is a reduction instrument system used with CREO screws and deformity correction. Reline 3D Towers are part of the Reline 3D pedicle screw system and are used for deformity and MIS fixation cases and enable MIS rod placement. AMS FreeHand is a software and instrumentation systems to use all of our AMS spacer portfolio with the EGPS and EHub systems. This completes the core Nuva products to be used with our EGPS, EHub, and E3D ecosystem. HEDRON C-MIS is a 3D printed cervical fusion spacer designed to stabilize cervical vertebra and promote bone growth and fusion, which uses a biomimetic lattice designed to promote bone growth onto and through the implant.

Spine product development remains a focal point moving forward as we step up our investment to bring new and exciting products to market, aligning with our reputation of leading with innovation. Q4 enabling technology sales were $55.6 million, growing 18.5% versus the prior year quarter, driven by increased sales of EGPS systems. We saw pipeline deals close during the quarter, which had been part of the elongation that we had experienced during the year. Examining further, the deal composition of capital sales during the quarter were primarily cash deals with immediate revenue recognition. Consistent with my comments last quarter, we remain nimble in how capital deals are structured and are quoting new pipeline deals with greater flexibility. We are positioned well and remain positive on this business as we enter 2026.

The Excelsius platform, which delivers a single vendor spine ecosystem across capital, implants, and software, provides for consistent workflow, data continuity, and training across the OR. When stepping back and looking at the broadening competitive I&R landscape, Globus continues to stand alone when it comes to effortlessly pairing imaging, navigation, and robotics together. Recent competitive offerings cleared only serve to reinforce the workflow of ExcelsiusGPS, which was introduced in 2017 as a floor-mounted, navigation-based robotic approach. If a surgeon desires robotic navigation and imaging, they can pair an EGPS with an E3D, bringing together best-in-class robotic functionality and state-of-the-art intra-op imaging capabilities, working seamlessly together. If the surgeon desires freehand navigation, they can combine the ExcelsiusHub and the XR augmented reality headset with the E3D imaging system. The features and benefits of these products working seamlessly together is second to none.

Thanks, Keith, good afternoon, everyone. To expand on Keith's comments, we've had a truly exceptional finish to 2025, with a record-setting quarter in both top and bottom-line results. Operationally, we continued to execute our integrations of the recent merger and acquisition of both NuVasive and Nevro. Our revenue growth was driven by our domestic spine business, growing 10% over the fourth quarter of 2024, and continuing to build upon the trend of above-market growth seen in Q2 and Q3 of this year. Our enabling technologies business also saw record growth, achieving over $55 million of revenue in the quarter, while posting record sales in terms of dollars and units. As we've mentioned in our Q3 earnings call, we updated our guidance to indicate our expectation was that Nevro would be accretive to earnings in the first nine months post-acquisition.

Today, I'm affirming that the Nevro business was EPS accretive within the first nine months post-acquisition. This is a phenomenal achievement by the broad Globus and Nevro teams, beating initial guidance by 15 months. Today's discussion will focus on providing insights into our quarterly and annual business performance, including the impacts of Nevro, a look back on synergy execution against our two most recent acquisitions, and an update on guidance for 2026. Full year 2025 revenue was $2.939 billion, growing 16.7% on an as-reported basis and 16.2% on a constant currency basis. Net income was $537.9 million, resulting in $3.92 of fully diluted earnings per share.

Non-GAAP net income was $545.6 million, delivering $3.98 of fully diluted non-GAAP earnings per share, or 30.8% of non-GAAP EPS growth over the prior year. Full-year adjusted EBITDA was 31.3%. Focusing on our fourth quarter results, revenue was $826.4 million, growing 25.7% on an as-reported basis and 24.7% on a constant currency basis as compared to the fourth quarter of 2024. GAAP net income in the fourth quarter of 2025 was $140.6 million, and GAAP fully diluted earnings per share was $1.03.

non-GAAP net income was $174.6 million, compared to $117.4 million in the prior year quarter, growing 48.7%. Our fully diluted non-GAAP earnings per share were $1.28, growing 52.1% over the prior year quarter. Consolidated adjusted EBITDA margin was 33.9%. Our Q4 2025 base business, Globus adjusted EBITDA margin, was 35.7%. Standalone Nevro adjusted EBITDA margin was 21.2% for the quarter, further expanding from the 16.2% adjusted EBITDA margin achieved in the third quarter of this year.

Our fourth quarter net sales of $826.4 million reflect base business Globus sales totaling $726.7 million, growing 10.6% as reported and on a day-adjusted basis, with the same number of selling days in the U.S. and International and Japan compared to the prior year. The growth in our legacy Globus sales was primarily driven by U.S. spine, which achieved 9.7% as-reported growth, enabling technologies which achieved 18.5% as-reported growth, and trauma, which achieved 26.8% as-reported growth. Nevro contributed $99.7 million of revenue during the quarter. Musculoskeletal revenue was $770.8 million, growing 26.3% over Q4 2024.

Legacy Globus Musculoskeletal revenue was $671.1 million, growing 9.9% as reported. Enabling Technologies revenue was $55.6 million, growing 18.5% as reported. As mentioned in my opening statements, Enabling Technologies achieved record sales in terms of dollars and units for both the total capital portfolio and our ExcelsiusGPS robotic system. U.S. revenue during the fourth quarter of 2025 was $665.3 million, growing 27.5% as reported. Legacy Globus U.S. revenue during the fourth quarter of 2025 was $576.6 million, growing 10.5% versus the prior year quarter. Our legacy Globus U.S. growth was primarily driven by our U.S. spine, neuromonitoring, trauma, and enabling tech businesses.

Our U.S. spine business continued the trend of above-market growth for the third straight quarter, achieving 9.7% as reported growth after notching 9.6% as reported growth in the third quarter and 7.4% day adjusted growth in the second quarter of this year. Q4 2025 international revenue was $161.1 million, growing 19% as reported and 14.2% on a constant currency basis. International revenue for the legacy Globus business was $150.1 million, growing 10.9% as reported and 6.5% on a constant currency basis compared to the prior year quarter. International growth was seen across the board, led by our enabling technologies and international spine businesses, headlined by the United Kingdom, Australia, Germany, Brazil, Mexico, and Poland.

As previously mentioned in 2025, our international spine business was impacted by supply chain shortages early in the year. Despite these challenges and the above-market growth in the U.S., which was prioritized from a supply chain perspective, we saw incremental improvement in each sequential quarter within the legacy Globus international spine business, culminating with a record sales quarter in the fourth quarter of 2025. GAAP gross profit margin in the quarter was 65.7%, compared to 57.2% in the prior year quarter, with the resulting improvement driven primarily by lower inventory step-up amortization. Adjusted gross profit margin was 69.2%, compared to 67.1% in the prior year quarter, primarily driven by favorable sales mix, sales leverage, and the impacts of synergy execution. Our legacy Globus adjusted gross profit margin was 68.7%.

Great. Thank you for taking the question, and congratulations on a great end to the year. I guess just two sets of questions from me. You know, first, on the base business, can you bridge us from your 9%, second half 2025 and 9.4%, you know, ex-APEX growth exiting the year to, you know, I guess, mid to high single digits in 2026. You know, is that conservative? Then, you know, can you maybe put a final point on margins? It seems like, you know, you delivered a really strong quarter in Q4. You know, you're talking about long-term mid-seventies outlook and, you know, above-market profitable growth. You know, how should we think about margins over time? Thank you so much.

Hey, thanks, Shagun. This is Keith. Thanks for giving us the call or sending these questions over. I think first of all, when I think about our sales growth, really, when I think about 2025, it was really a tale of two halves. The first half of the year, we got off to a slow start. We had a really a disappointing Q1 that really moved forward in Q2, really led by some disappointing results in enabling tech. One of the things that we started to see in Q2, which carried forward into Q3 and Q4, was U.S. spine coming back to life. You know, as I look at the year, we did a really nice job growing our sales force with competitive rep conversions.

When you think about the products that we've launched, we launched nine products in spine in 2024 and another six in 2025. Those really helped drive some of that growth. On top of that, you know, like I said in my prepared remarks, really leaned into inventory and set production. All of that really started to come online as we got through the year, which allowed our momentum to continue.

As I think about how we closed the year, we saw our normal seasonal bump in spine. You know, as you get into Q1, the thing I'm encouraged by is, and really ties back to my prepared remarks, is that we're still seeing momentum in our U.S. spine business. Our trauma business, again, that performed better as we got throughout the year. I was very encouraged by that. As it relates to margins, Kyle will give you a couple of brief comments on margins.

From a margin perspective, you know, obviously we ended the year here at 69.2% from a gross profit perspective. Next year, what I said in my prepared remarks is we expect at least a 100 basis point improvement in gross profit, you know, somewhere ranging from the 69%-70% for the full year. Compare that back to the 68.1% we did for full year 2025. As you step through the year, I think, you know, as Keith comment on the Q4 results from a revenue perspective, we always have that seasonal lift in Q4, then you typically see a sequential slowdown as you go from Q4 into Q1.

We feel positive on what we're seeing in terms of U.S. spine. We tend to still see from a base business perspective, a little bit of step down in Q1, building up into a little bit higher of a Q2 and Q3, and then stepping up again seasonally into Q4. We think that our gross profit margin will follow that similar cadence that we've seen in the past.

Thank you.

Hi, this is Namrata on for Vik. Thank you for taking my question. Could you please share your thoughts on how you think you did from a market share perspective, and also talk about the general strength of the spine market? Thank you.

This is Keith. Thank you for the question. You know, as I think about our U.S. spine business, I continue to believe that we're growing above market. I think that's evidenced in basically re-achieving 10% growth in Q3 and Q4, and really seeing some of that momentum continue as we get into the first quarter. We don't really comment a ton on the overall market, but I guess from my standpoint, I view the spine market as being relatively healthy.

Thank you.

Hi. Thanks, guys, for taking the questions. Maybe just for me, look, Well, congrats on a lot of aspects of your performance, but one of the things that really struck me outside of the margin was the enabling technology performance and how that bounced back. Just wondering if you can characterize the environment a little bit. You know, what changed, if anything, from earlier in the year?

Clearly something I think got better for you guys, or maybe, you know, it's just lumpy and, you know, it played out the way you thought. Then as you're answering that, if you could talk a little bit about, you know, an operating lease strategy or more of a placement strategy as you go forward. I think you had alluded to more of those types of situations on a go-forward basis. What's contemplated in your guidance for 2026 on that front, and how should we think about that? Thanks.

Hey, Richard, this is Keith. Thanks for the question. Enabling tech was, I would say, a very lumpy year. You know, as I commented earlier with Shagun's earlier question, you know, we saw a disappointing Q1, a nice bounce back in Q2, again, a disappointing third quarter. Really, when we got to the fourth quarter, the thing that we saw is our pipeline... I spoke a lot about during the year about an elongation of pipeline deals taking longer to actually just close. We saw those deals come to fruition in the fourth quarter, it really ties back to what I was saying throughout the year, is that I didn't see us losing deals, but the deals were taking longer to close for one reason or another.

You know, as I look into 2026, I still see a pipeline that I feel is robust. You know, as I look at where we're at in the quarter, I'm pleased with where we are thus far. Obviously, there's still more work to do in the quarter, but I'm pleased with what I see. You know, as it relates to getting more flexible with our deals, yes, operating leases are one of the things or one of the options that we can provide to our customers. As I noted in my prepared remarks, we're absolutely going to be more aggressive because really what we're trying to drive is placement of that capital to drive really the implant pull-through.

That's the focus and really ties back to us saying that, look, we want to make sure that these capital units get placed, and we're driving successful launches of the programs to generate strong implant pull-through. You should expect us to be aggressive in the marketplace as we get into 2026. Yeah.

The only comment that I would add, Rich, from a guidance perspective is, right, our contemplation in terms of where we have our guidance is based on some mix of sales as well as fair market value leases, placements, et cetera. We're going to continue to make every single one of those options available, we do think that there will be some mix in 2026.

I guess just higher mix than 2025. Is that fair?

Yeah, I would say that the mix of lease approaches will be higher this year, or in 2026 than in 2025. You know, we really got more aggressive quoting them as we got to the back half of the year.

Thank you.

Hey, a couple questions for me. One, you know, over the last couple of quarters, U.S. spine growth has really accelerated, and, you know, a question we get from investors a lot is: How sustainable is that U.S. spine growth? just would love to kind of get a sense on your ability to kind of understand how sustainable this kind of growth rate is in U.S. spine. one of your competitors recently launched a new enabling tech robot navigation system, if you will. I'm just kind of curious how you're contemplating that, if you see that as a competitive portion of the market or not.

Thanks, Travis. This is Keith. Number one, as I think about spine and the growth, you know, we see that growth for our business as durable, you know, and something that we look to sustain as we move forward. You know, I think back to some of the things I spoke about. We've continued to launch products in spine. We've continued to grow our sales force. It is fair to assume that we are aggressive in bringing competitive reps into the business. More importantly, like I said in my prepared remarks, we're really looking to get some of the M&A noise behind us and get back to focusing on really what made Globus great.

That's launching new products, driving competitive rep conversions, and driving implant pull-through. You know, as I think about the leadership team, we're all focused around those specific areas to drive the business as we get into 2026. You want to repeat your the second part of your question, please?

One of your large spine competitors just got approval for a new robot navigation system, and didn't know if you know, how you were looking at that in the marketplace?

Yeah, no, I mean, competition is continuing to evolve, and we still view that Excelsius is a great option for us and for our customers. You know, I commented in my prepared remarks that what we brought to market in 2017 was a floor-mounted, navigated, base robotic system. I think some of the competitive offerings that have recently come out only serve to reinforce what we came out with back in 2017. As I think about the features that we have, providing, you know, best-in-class, you know, features and technology, I believe we are well-positioned to really weather any competitive threats that we see. I think that, you know, combining the technology along with us getting more aggressive in how we get robots into the accounts, positions us well for 2026.

Great. Thank you.

All right. Good afternoon, everybody. Can you hear me okay?

Yes.

Great. A couple of questions, and I apologize, I was bouncing around calls, so you may have touched on this a little bit. Just thinking about Nevro and really thinking bigger picture beyond 2026, just, you know, help us think through when that business perhaps starts recalibrating to, you know, at least sort of corporate-type levels of growth. To get there, do you need more stuff in the bag, portfolio enhancements, whether they're organic or inorganic? I've just got one follow-up.

Okay. It's a great question. I mean, you know, as I commented earlier, you know, Nevro allowed us to have a pain point in our, in our portfolio. We were excited to bring that business in, and as we see it in 2026, we'll work through some lumpiness as we recast our go-to-market approach. I think as you look at the business, one of the things that we want to drive is consistency, and we want folks to get back to the basics. You know, I just came back from the Nevro sales meeting, this past weekend, and I was really encouraged by the team, the team getting fired up, understanding that we're going to market as one company.

From my perspective, getting that mindset across the team is infectious, number one, but number two, the team knows that they're with a company that's going to drive investment and really look to foster continued product development. Your comment on, do we need new products? We're going to continue to evolve and bring new products to market. I think over time, you're going to see us look at other neuromod options, such as peripheral nerve. As time passes, we want to drive the cross-sell with legacy GMED products. We want to develop new spinal cord stimulation products. We want to look at mechanical solutions, and like I said earlier, we want to get back to the basics of running that business. Lastly, but most importantly, we want to drive competitive recruiting. I think that is something that we think will be a catalyst for this business as we move forward.

Okay. I appreciate all that color. My follow-up question, is international. It's been a heavy lift in international, and that's even before the NuVasive inflation and some supply constraints you're working through today. Could you maybe just take a step back and tell us what the headwinds are fully in the international? I think about that business returning to. I think you've talked about double-digit growth. How do we get there? I guess the last piece of that is, are there specific geographies where there's a heavier lift ahead, Japan, Latin America, Europe, or do those need sort of extra attention to get you back to some of that double-digit type growth rate, or is it more broad-based than that? Thank you.

Yeah. Yeah, thanks for the question. As we thought about our international business historically, we think that that is something that can grow 12%-15% over the long term. You know, when I look back at the last 12 months, you know, international was a bit more of a challenge, but, you know, what we've sought to do is go deeper in the countries that we operate in. We're not looking to suddenly add more countries to drive growth rate because we see ample ways to grow deeper where we're at. As I think about geographically, you know, when I look at 2025, EMEA, specifically Western Europe and also some of the countries that Kyle commented on, were really integral to helping drive growth. Where we saw some more challenges was in the APAC region.

You mentioned Japan, you know, we have to drive some continued growth there and drive some sustainability. LATAM, as I think about the LATAM region, there was some choppiness there, but I think as we exited 2025, looking at the international business overall, I think we're well poised going into 2026 to start to get back on track of that business. As I look ahead in 2026, I see that we have the ability to grow, but I think that growth will get better as we get further into the year.

Okay. I really appreciate it. Thank you.

Mm-hmm.

Hey, guys. Thanks so much for taking the questions, and congrats again on a really strong finish to this year and strong guide. One question on some of the leverage that you've been delivering. Just maybe if you could talk a little bit about where that's coming from, helping us understand that a little bit better. Then the second, just on competition and some of the strategic moves that other companies have made in the space. Anything you're feeling yet, in terms of changing momentum around the Stryker divestiture or the planned J&J divestiture or anything you'd call out that tells you that, sort of the tenor of competition is changing a little bit. Thanks so much for the questions, and congrats again.

Thanks, Matt. This is Kyle. I'll take the first question and then pass it over to Keith for the second one. You know, just thinking about leverage and thinking about how our businesses are structured, you know, we've historically said that our U.S. spine, right, as that business goes, the rest of the business and down through the bottom line goes as well. What we've seen as we've accelerated growth, starting in Q2 and then Q3 and Q4, you've seen that business grow, and you've been able to see the margins come along with it.

If you've gone back and you take a look at where we're seeing from a gross profit perspective, what we're seeing from an EBITDA and from an earnings per share perspective, you'll see it go as the base spine business grows, you know, we have fixed cost leverage that we can get throughout COGS. you also see some of that within our G&A and then some of our non variable commercial type structures, et cetera. you really see it top to bottom across the board, and it really kind of follows as that U.S. spine business grows.

Matt, the second part of the question, really the competitive landscape. I mean, you know, we've seen the competitive landscape evolve over the last year. You commented Stryker and some of the recent news with J&J and Synthes. You know, as I think about that, we remain aware, but what's important to me is that our team stays focused on our internal objectives. You know, when you think about Globus, we're continuing to invest in our spine portfolio. That's first and foremost. We still think we have best-in-class technology, and we want to drive successful robotic programs. Those things, I believe, make us hugely marketable as we go out and try to bring in competitive reps. As I think about some of the changes that have occurred or are occurring, that to me, creates opportunity for us to drive our business.

As I think about the leadership team and where we are, I want the team focused on the things that we need to accomplish, because I believe if we accomplish them, the results will speak for themselves. I'm not seeing any, I would say, challenges as it relates to some of the competitive threats that are out there, or any competitive changes, but we continue to monitor it. Again, I want us to stay focused on the things that we need to do to drive our business, because I believe that we're well-positioned looking ahead.

Makes sense. Congrats. Thanks.

Thank you.

Hi, there. This is Anna here for Matt. Thanks for taking the question. Wanted to touch on Nevro again. I mean, really impressed with the cost reductions we've seen. Just wondering how much more wood there is left to chop there and how much more, I guess, optimization there is from a synergy perspective. If it's possible that we see more synergies than, originally anticipated, like we did with NuVasive. Thanks.

Thanks for the question. This is Kyle. As we think about the Nevro business and where we expect to take it from here, right? We've been very active here over the first three quarters, nine months or so. From a synergy perspective, we focus mainly on the G&A bucket, removing those redundant costs that we could identify, whether through headcount or non-headcount related costs. Those actions largely have taken place over a nine-month period here. As we move forward into 2026 and beyond, we're really pivoting towards how do we maintain the sales force and ultimately grow our sales volume. As we're able to grow the sales volume, we expect to get incremental leverage and see that profitability grow further.

Something we have not focused on yet, but it is something that we want to continue to evaluate, is just the manufacturing aspects of the business as well. Their COGS are about 68%, 69% or gross profit, 68%-69% on average here over the past nine months. That's somewhere where we think we can get some improvement on, not dramatic as making little tweaks here and there, but I don't see any large synergies really that we have out there to execute on the Nevro side.

Thanks so much.

Hi, thanks for taking the question. Just starting with enabling tech, you already touched on it, but just wondering if you're still seeing elongated deals or timelines compressing there. You know, just thinking about Nevro, which gives you access to, the pain call point, how are you really thinking about your broader strategy to access lower acuity settings as more spine procedures move into the sites of care?

Thanks. This is Keith. Appreciate the questions. As I think about... I'll answer the second part of your question first, Nevro and really the expansion. Nevro brings us into smaller centers, more pain. I commented earlier that one of the things that we're going to focus on is driving the cross-sell of legacy Globus products with Nevro and pain. As we think about surgeons, pain surgeons that we've had come through Globus and really learn the business and really learn Nevro, there's been a lot of excitement to see that Nevro was paired with us because there's excitement on driving that cross-sell.

I think that only bodes well for us as procedures migrate out of a hospital setting, more into an ASC setting or as procedures morph into a pain center. We think that we're well positioned there, but as we think about 2026, the first point is really getting the business further stabilized and allowing us to drive the business forward with the products that they have in their core bag. Do you want to repeat the first part of your question again? Enabling tech.

Yeah, sure. Just on enabling tech, are you still seeing elongated deals or are the timelines compressing there?

I would say as we got to the back end of the year, especially in Q4, some of those deals are out there from a pipeline perspective, closed, and you're starting to rebuild that pipeline going into Q1. The deals that we've started to work through from a quoting perspective in Q3 and Q4 are still there. You know, as I look at Q1, where we're at, I'm encouraged by where we're at in the quarter, consistent with history, the majority of capital deals closed towards the last couple of weeks of the month.

You know, I'm not hearing some of the concerns that I heard last year regarding spending, but I remain cautiously optimistic that we won't see quite as, a long of elongation as we did last year, especially given the fact that we're getting more flexible in how we're quoting the deals.

Got it. Thanks so much.

Thank you.

Great. Yeah, thanks for taking the questions, congrats on the quarter. Wanted to ask about gross margins. Talked about the path to mid-70s. In 2026 round numbers, you're looking at 1-2 points of gross margin expansion. Is that a good annual run rate to get to mid-70s, or any dynamics in 2026 that's driving more of an accelerated benefit? In just a question or two ago, you talked about Nevro manufacturing. Do you need to do anything to that footprint to get to the mid-70s, or would that be upside?

Thanks, David. This is Kyle. I'll take your question. As we think about, you know, what we kinda stepped out and messaged back in 2024 into 2025, and what our expectation was in terms of growing that margin, we thought by working through some of our manufacturing initiatives, right, we'd place the order for CapEx, we'd bring in and in-source some of our manufacturing, and we'd see a bump here at the tail end of 2025 and in through 2026 from a gross profit perspective. What we've actually seen is that process has been, you know, sequentially better quarter after quarter.

If you go back to our prepared remarks, we both touched on six sequential quarters in terms of gross profit improvement, and you can see it's kind of steady as you go, as you work your way through quarter after quarter. We're seeing those improvements come through. We're seeing different things that we're attacking and driving in order to make those improvements.

I think 2026 is gonna be more of the same, where we see a little bit of incremental benefit as you kind of work through the year. Ultimately working your way into that 69%-70% range for the full year. My expectation is as you get to the back half of the year, you'll touch that 70% range and get into the low 70s. Then I think it's beyond that, when you see the step back into that mid-seventies, which we've always kind of classified as starting as the 72% range.

As it relates to Nevro and manufacturing, I don't see any large scale changes that we need to make specifically. As you think about bringing them into the fold with Globus, really, we're focused, number one, on spending. It gets back to the very basic things of how are you doing your four-wall spending? Are there ways to drive efficiencies on the manufacturing footprint? How do you really monitor output? How do you monitor efficiency? Those are ways to get better fixed cost coverage.

Secondly, how are we buying? You know, you think about, making sure that you're bringing raw materials into the business. Are we buying smart in a way that allows us to produce most effectively in our production facilities? We see opportunity to expand the gross margin, which touches on some of what Kyle said earlier, but I wouldn't say that you need a massive scale change on that business to get that improved profitability.

Great. That was super helpful. Thanks to both of you.

Thank you.

My second question, just on ExcelsiusFlex. You know, would love to get an update there. You know, how are placements going, if you've made any? How are you thinking about the StelKast implant portfolio and, you know, potential growth of that part of the business? Thanks so much.

Thank you. As I think about 2026, I'm not expecting EFlex to be a major contributor to revenue. As I think about the portfolio, you know, from a, from a joints perspective, we have the knee and the uni as it relates to primary joints. We have a hip, except for Tri-Taper. When I think about revision joints, we're expecting to have hip and knee at the end of 2026. We're still continuing to modernize the portfolio, but as we modernize that, the portfolios, we're coming to market with the robot, and I think that will bode well really, as we get later into the year.

Thanks for taking our questions. Congrats, guys, on a strong end of the year. Maybe, when we think about the composition of guidance, I'm wondering if you could, you know, speak a little bit to it, Keith and Kyle. If I think about Nevro kind of being, you know, in a similar vein to the way it was running and enabling tech, doing, you know, the way it's been going, which has been stronger in the back half of 2025, it does suggest kind of a slowdown in kind of legacy Musculoskeletal growth. Relative to what we've seen, you know, so far in 2025, I think implied, you know, around mid-single digits.

I think Shagun was asking this question as well, but, you know, why would it slow down if you're not seeing necessarily that slowdown, you know, anecdotally in the Q1? Why guide to that extent? Because I guess by my math, it implies kind of a mid-single-digit growth rate on legacy Musco, ex Nevro and next enabling tech.

Hey, thanks, Ryan. This is Keith. You know, as I think about the Nevro business, you know, I commented that, you know, in the short term, you could see additional lumpiness in that business. You know, I don't expect that business just to suddenly drive growth in a linear fashion as we move forward. I'm still expecting choppiness as we get into 2026. As it relates to enabling tech, you know, Kyle commented on earlier, as you think about us getting more aggressive with how we place capital, some of those deals may be of operating lease in nature, which might not have the immediate RevRec pop right up front. You might be moving units, but not seeing the same sales dollars if you're trying to look at this apples-to-apples.

That's something that we will, that we contemplated in guide for 2026. As you think about the core business, the core spine business, I remain very optimistic about where this business is. We've had really two strong quarters coming off the back half of 2025. I'm encouraged by what I see in 2026. You know, international, I think, is a story that gets better throughout the year, and our trauma business continues to perform. As I think about how the business came together from an overall guide, I'm comfortable. I believe our numbers are achievable. We maintain Globus conservatism, but I feel that our numbers are achievable given, you know, what we see coming at us.

Okay, and then maybe for Kyle, you know, we've talked, you guys, you know, legacy Globus EBITDA margins are second to none, right? They're very strong. When I think about that, though, in the context of the need to invest more in R&D, I appreciate that gross margins are moving higher, which, you know, helps to offset some of that. Maybe, Kyle, you can speak to kind of how you think about potentially taking those adjusted EBITDA margins higher if you can, or is this kind of, you know, the steady state where we should think about adjusted EBITDA margins and some of the components are moving around to get you to that point, going forward?

Yeah, I think it's in our prepared remarks where we were calling out the plan to invest heavier in R&D. We see the benefit in terms of what's come through from an EBITDA perspective, working our way back to that mid-30s EBITDA that Globus has always been known for. As you saw in our prepared remarks, R&D for the year is down to 5%.

We want to ramp up spend there, get back into that, you know, 5% into the 6% in terms of range of spend. Really, we want to invest kind of across the board, all of our businesses, whether that's spine, whether that's trauma, whether that's capital, et cetera, really invest back into the business. That's really the main reason that we've always prided ourselves on those margins, is so that we could take that cash and invest it back in ourselves.

Okay. Thank you.

Yep.

Great. Just one high-level question and then kind of a housekeeping one. Starting off with enabling tech, when we think about, you know, more leases or pay-per-use or kinda creative financing, you know, maybe this year that results in somewhat of a hiccup. As we start to think, you know, more longer term, do you see an increase in those leases or pay-per-use contracts resulting in that revenue starting to smooth out, become less lumpy, start to track seasonality more in line with the MSK business, or would you expect that to still, you know, continue to be a business that is quite lumpy?

Thanks for the question, Keith. As I think about that, you know, the first year that you're really pushing operating leases, you're gonna definitely see lumpiness until you get a base underneath you. As that business looks to move forward, you should expect to see some of that smoothing out, number one. Number two, as I commented on earlier, I expect to see the flywheel effect, because when we have greater robots out there in an operating lease format, the offset to that is really driving spine implant pull-through. It's important that as we increase the volume of placements out there of robots, it's important those programs get launched and that we're continually driving and sustaining those programs because the offshoot should be stronger implant growth.

Great, that's helpful. More on the housekeeping side, just any, and apologies if I missed this in prepared remarks, but any expected changes in any working capital metrics, CapEx, things like that might meaningfully sort of change the relationship between, you know, EBITDA and free cash flow over the next couple of years? You know, any thoughts on, you know, plans to deploy the increasing cash balance?

No. Yeah, no changes to what we've been stating here historically. We expect CapEx to be in the range of 5%-6% of sale. That's right in line with what we did this year. We continue to prioritize cash spend on product development, as well as inventory and sets for our field, and manufacturing in terms of being able to continue to vertically integrate within the business. We'll continue to look at share repurchases when the time is right, and we'll also continue to look at tuck-in M&A here and there if we find the right technology out there, but no changes to that.

Excellent. Thanks so much.

Thank you.

You're welcome.

Great. Hey, guys. Thanks for taking the questions. Apologies if these have been asked, jumping around calls, but I wanted to ask about the 2026, call it, U.S. spine surgery environment. A lot of changes with CMS, reimbursement, site of care, et cetera, that, you know, may or may not impact surgical volumes here in the U.S. Keith, can you maybe flesh out for us the main, call it, market-related headwinds and tailwinds that we should be cognizant of? And, you know, how would you characterize your general, outlook on U.S. surgical volumes in this year, in 2026?

Thanks for the question. As I think about the overall market, I think the market is growing low single digits. I still continue to believe that we're growing well above the market. You know, dynamics of the competitive dynamics obviously are out there. We still feel that we have the ability to address and find ways to grow. As I think about just the general landscape of the market and how the market continues to evolve, I believe that we're really well positioned. As I think about some of the initiatives that are out there, I see some of them, but I don't really see them having an impact on the business longer term.

As we think about as the business starts to migrate maybe further out of the hospital into the ASC setting, I think we have the portfolio to be able to respond to that and really come at this really with a complete suite of products, not only just the spine implants, but also the enabling technologies. All in all, I think we're well positioned, and I still think we're well positioned to grow above market.

I'll leave it there. Thanks.

Thanks.