Globus Medical (GMED) Q2 FY26 earnings call: guidance and Q&A

Competitors seeing softness in Europe due to transient headwinds; did Globus experience this, and is a seasonally soft Q3 expected?

Keith Pfeil stated that performance across EMEA was in line with expectations, with double-digit growth in Q2. Kyle Klin added that they expect the international business to be a strong grower in H2.

“Generally speaking, our performance across the was pretty in line with expectations. Countries go up and down from quarter-to-quarter. But when I look at EMEA, I look at it in the aggregate and what I see is a business that's moving forward.”

asked by Ross (Wells Fargo) · answered by Keith Pfeil

U.S. Spine growth of 7% is a step down from prior quarters; is this a sustainable run rate given tougher comps?

Keith Pfeil acknowledged tougher comps in H2 but expressed confidence in the U.S. Spine business's performance and continued growth.

“As we get into the second half of the year, our comps get a little more difficult as we move through but that doesn't take away from our confidence in the business. We see our U.S. Spine business is performing really well, and we're confident as we look into the rest of the year.”

asked by Vik Chopra (BMO) · answered by Keith Pfeil

Given the strong gross margin performance, when does the company expect to achieve its mid-70s adjusted gross profit margin target?

Kyle Klin expects to be in the low 70s by year-end and reach mid-70s in 2027, citing consistent progress and synergy execution. Keith Pfeil concurred, noting they achieved mid-30s EBITDA ahead of schedule.

“we're likely into in touching 70s by the end of the year, probably very, very low in the 70s. And I think we look back to getting into that mid-70s here and in the year or 2 after that.”

asked by Vik Chopra (BMO) · answered by Kyle Klin

What is the Nevro cadence for the rest of the year, and what is the M&A strategy for that division?

Keith Pfeil reiterated expectations for Nevro trial volumes to improve in Q3/Q4, translating to sales growth. He stated no specific comments on Nevro M&A, with the current focus on stabilizing and returning the business to growth.

“Nevro as we think about it is a business that we want to return to our historical level of sales. Secondly, on M&A, I have no comments on never M&A specifically at this point. We've been very active on the M&A front the last several years. And really the focus right now is stabilizing this business and getting it to -- back to a path of returning it to growth.”

asked by Ravi Misra (Truist Securities) · answered by Keith Pfeil

How quickly can the new lumbar spacer go from design to production, and can the company capitalize on new DRGs?

Keith Pfeil stated a 1-week to 10-day turnaround for patient-specific lumbar spacers. He expressed confidence in existing strong reimbursement codes for the product line.

“When you think about lumbar spacers and patient specific, it's about a week to 10 days. We expect to be able to turn it around.”

asked by Ravi Misra (Truist Securities) · answered by Keith Pfeil

Why was revenue guidance not raised despite the Q2 performance?

Kyle Klin cited a modest beat in Q2 and caution regarding the enabling tech strategy change and Nevro's stabilization as reasons for reaffirming the existing revenue guidance range. Keith Pfeil added that they are facing tougher comps in H2.

“What I'd point to is our prepared remarks around the change in enabling tech strategy as well as Nevro and kind of fund in the bottom there and building up from there. Those 2 things have us cautious in terms of the second half where we had a strong first half, but we would just want to remain cautious and appropriate with our guidance range.”

asked by Samantha Munoz (Piper Sandler) · answered by Kyle Klin