GLOBUS MEDICAL Q4 FY25 earnings call GMED

Consolidated revenue for Q4 FY25 reached $826.4 million, a 25.7% increase year-over-year, with non-GAAP EPS of $1.28, up 52.1%. Full year 2025 revenue was $2.939 billion, growing 16.7%, and non-GAAP EPS was $3.98, up 30.8%. The base business, excluding Nevro, grew 5% for the full year and 10.6% in Q4, demonstrating accelerated momentum in the second half of the year with 8.8% organic growth.

The U.S. Spine business grew 10% in Q4, following a 10% growth in Q3, and has seen 48 consecutive weeks of growth extending into Q1 2026. This broad-based momentum was driven by successful product launches, including expandable TLIF products, MIS pedicle screws, and power tools like DuraPro, supported by strategic investments in inventory and set production to meet customer demand.

Q4 Enabling Technology sales were $55.6 million, an 18.5% increase, driven by increased sales of ExcelsiusGPS systems. The company successfully closed pipeline deals that had previously experienced elongation. Management plans to adopt more aggressive pricing and deal flexibility, including operating leases, to drive market share and implant pull-through, positioning the business well for 2026.

The trauma business delivered approximately 27% growth in Q4, benefiting from a focused strategy on Level 1 and Level 2 trauma centers. Key product launches, such as the ANTHEM elbow plating system in Q3 2025, exceeded expectations in both revenue and demand, contributing to the business's ability to bid on primary vendor contracts.

Nevro contributed $99.7 million in Q4 revenue with an adjusted EBITDA of 21.2%. The business achieved EPS accretion in FY25, 15 months ahead of initial guidance. While the path to growth may not be linear in the short term, the company plans to focus on developing new SCS products, mechanical solutions, cross-selling with legacy Globus products, and competitive recruiting to drive long-term profitable sales growth.

Globus Medical achieved $200 million in NuVasive synergies, exceeding the $170 million target almost a year ahead of schedule. Nevro became EPS accretive in FY25, 15 months earlier than the initial Q1 2027 expectation. These synergies primarily impacted SG&A and COGS, contributing to a six-consecutive-quarter expansion in adjusted gross margin and a significant increase in free cash flow generation.

The company is moving beyond M&A integration to increase product development investment, sustain above-market sales growth, and achieve operating leverage. It aims to be a procedure-enabling MedTech platform that thoughtfully integrates imaging, navigation, robotics, and implants, focusing on patient selection, surgical techniques, and complementary implants to drive continuous improvement in patient care.