Matt Miksich

Matt Miksik from Barclays asked for more detail on the sources of operating leverage Globus Medical has been delivering. He also inquired about any perceived changes in the competitive landscape, specifically regarding the Stryker divestiture or planned J&J divestiture, and if these moves are altering the tenor of competition.

Answer

Kyle Kline, Chief Financial Officer, explained that leverage primarily comes from the U.S. spine business, which drives margins across gross profit, EBITDA, and EPS as it grows. He noted fixed cost leverage in COGS, G&A, and non-variable commercial structures. Keith Pfeil, President and CEO, acknowledged the evolving competitive landscape, including Stryker and J&J news, but emphasized the team's focus on internal objectives: investing in the spine portfolio, driving successful robotic programs, and competitive rep conversions. He views competitive changes as opportunities and is not seeing significant challenges.

Matt Miksik asked about any remaining puts and takes related to the enVista IOL recall and expectations for surgeons to re-engage with the product launch, given its strong momentum before the recall.

Answer

Chairman and CEO Brent Saunders explained that while premium IOLs (NV, Aspire) saw a faster bounce-back due to instant sales cycles, the base monofocal lens business still faces a 'hangover.' This is because many ASCs and practices signed contracts for monofocals with competitors during the recall period, and Bausch + Lomb must wait for these contracts to expire to regain that business.

Matt Miksich asked about the overall health of the surgical market, including volumes, and Bausch + Lomb's share growth or recovery post-recall. He also followed up on MIEBO's momentum regarding coverage and when XIIdra's investments from late last year/early this year would annualize.

Answer

Chairman and CEO Brent Saunders characterized the cataract surgical market as steady, with a growing patient population and no significant concerns. He confirmed that MIEBO and XIIdra have steady coverage around 70%, which is considered full for the category, and that the investments made for XIIdra in 2025 establish a new baseline, with the investment cycle nearing its end in Q4.

Matt Miksich asked about the overall health and volume trends in the surgical market, particularly for cataract procedures, and sought an update on MIEBO's momentum, its coverage array, and when Bausch + Lomb expects to annualize the investments made in Xiidra.

Answer

Chairman and CEO Brent Saunders indicated that the cataract market is steady with a growing patient population, showing no significant watch-outs. He confirmed that MIEBO and Xiidra coverage is stable at around 70%, which is considered full coverage for the category. Mr. Saunders also stated that the investments in Xiidra were made in 2025, establishing a new baseline, and the company is nearing the end of that investment cycle in Q4.

Matt Miksik asked about the gross margin headwind from CAS generator sales and when the mix is expected to normalize. He also inquired about the runway for CAS, the bottleneck of hiring mappers, and the pace of hiring and center penetration.

Answer

Chairman and CEO Geoff Martha stated that Medtronic is still relatively early in the CAS launch with a long runway for penetrating academic and other centers, and that hiring mappers remains critical, though they have managed to stay ahead. EVP and CFO Thierry Piéton noted that while generator sales are dilutive to gross margin, CAS is a fantastic business for operating margin, and an inflection in mix improvement is expected in the second half of next year, driving gross margin improvement as early as 2027.