GLOBUS MEDICAL INC (GMED) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 was a clean beat on revenue and earnings with worldwide net sales of $769.0M and non-GAAP diluted EPS of $1.18, versus S&P Global consensus of $738.0M* and $0.77*, driven by accelerating U.S. Spine strength, improving margins, and a positive contribution from Nevro .
Management raised FY2025 guidance: revenue to $2.86–$2.90B (from $2.80–$2.90B) and non-GAAP EPS to $3.75–$3.85 (from $3.00–$3.30); Nevro now expected to be accretive in 2025, a year earlier than prior commentary .
Mix/margins inflected: GAAP gross margin 64.2% and adjusted gross margin 68.1%, with adjusted EBITDA margin up to 32.8% on synergy execution and operating leverage .
Enabling Technologies remained a headwind (down 26–27% YoY) as hospitals increasingly favor leases/per-click over upfront purchases, elongating sales cycles; management emphasized a robust pipeline and flexible deal structures as the strategy shift continues .
Key catalysts: the above-guide EPS outlook, earlier-than-expected Nevro accretion, record free cash flow ($213.9M), and evidence of sustained U.S. Spine momentum (32 consecutive weeks of growth) .

What Went Well and What Went Wrong

What Went Well
- Broad-based top-line acceleration: total revenue +22.9% YoY to $769.0M; U.S. +24.6%; Musculoskeletal +26.2%; Trauma +17.2% .
- Margin expansion and cash generation: adjusted gross margin 68.1% (+160 bps YoY), adjusted EBITDA margin 32.8% (+180 bps YoY), and record free cash flow $213.9M .
- Nevro integration outperformed: $99.3M revenue (+4.9% seq) with 16.2% standalone adjusted EBITDA margin; now expected to be accretive to 2025 EPS .
- Management quote: “Q3 revenue rose 23%, driven by 10% growth in our US Spine business… Strength in revenue translated into enhanced earnings and profitability, with meaningful improvements in adjusted gross margins and operating expenses” .
What Went Wrong
- Enabling Technologies softness: $28M revenue, down ~27% YoY, reflecting fewer cash deals and slower decision cycles; pivoting to leases/per-click weighs on near-term revenue recognition .
- International still constrained by U.S. inventory prioritization (despite YoY growth), requiring continued supply recovery and execution to reach 10–15% growth longer term .
- One-time items in SG&A and tax: Q3 included $28.3M estimated litigation charges; non-GAAP tax rate benefited by ~$0.07 of non-recurring favorability, tempering quality of the EPS beat .

Financial Results

Summary quarterly P&L and profitability (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$598.1	$745.3	$769.0
GAAP Diluted EPS ($)	$0.54	$1.49	$0.88
Non-GAAP Diluted EPS ($)	$0.68	$0.86	$1.18
GAAP Gross Margin %	63.6%	63.3%	64.2%
Adjusted Gross Margin %	67.3%	67.4%	68.1%
Adjusted EBITDA Margin %	29.7%	28.0%	32.8%
Free Cash Flow ($USD Millions)	$141.2	$31.3	$213.9

Q3 actuals vs S&P Global consensus

Metric	Consensus	Actual	Result
Revenue ($USD Millions)	$738.0*	$769.0	Bold Beat
Non-GAAP EPS ($)	$0.77*	$1.18	Bold Beat
Adjusted EBITDA ($USD Millions)	$199.0*	$252.6	Bold Beat

Segment/product and regional trends (oldest → newest)

Net Sales by Product ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
Musculoskeletal Solutions	$575.9	$710.2	$741.0
Enabling Technologies	$22.2	$35.2	$28.0
Total	$598.1	$745.3	$769.0

Geography / Portfolio ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
U.S. Net Sales	$483.9	$600.8	$617.6
International Net Sales	$114.3	$144.6	$151.4
Nevro Net Sales	—	$94.6	$99.3
Base Business Net Sales	$598.1	$650.8	$669.8

Notes: Enabling Technologies in Q3 declined due to fewer upfront cash deals and more flexible structures (leases/per-click), elongating deal timing; U.S. Spine grew ~10% YoY; Trauma delivered strongest quarter since inception .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$2.80–$2.90B (Q1/Q2 reaffirmed)	$2.86–$2.90B	Raised (low end)
Non-GAAP EPS	FY 2025	$3.00–$3.30 (cut at Q1; reaffirmed Q2)	$3.75–$3.85	Raised
Nevro EPS impact	FY 2025	Accretive in year 2 (prior commentary)	Accretive in 2025	Pulled forward
Non-GAAP tax rate	FY 2025	~25% prior modeling	~24%–25% (full-year view)	Clarified
Adj. Gross Profit	FY 2025	—	67%–68% of revenue (2025)	Provided range

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
U.S. Spine momentum	Q1: core U.S. spine strength despite ET softness ; Q2: +5.7% reported, +7.4% day-adjusted	~9.6–10% growth; 32 consecutive weeks of growth; strong competitive rep recruiting	Improving
Enabling Technologies	Q1: softness and slower closures ; Q2: modest bounce back	$28M, down ~27% YoY; shift to leases/per-click; pipeline remains strong	Mixed/pressure near-term
Gross margin path	Q2: 67.4% adj GM with sequential progress	68.1% adj GM; 4 straight sequential improvements; target mid-70s over time	Improving
Nevro integration	Q2: $94.6M sales; standalone adj EBITDA -1.3%	$99.3M sales; 16.2% adj EBITDA; accretive in 2025	Improving
International	Q1: -7.7% YoY ; Q2: +11% YoY	+16.5% YoY; supply prioritized to U.S. but improving; LT 10–15% target reiterated	Improving
Trauma portfolio	—	+17.2% YoY; launch of ANTHEM Elbow Fracture System	Improving
Capital allocation	Q1: debt-free; buybacks ongoing ; Q2: repurchase program expanded by $500M	$40M buybacks in Q3; $435M authorization remaining	Ongoing
Capex environment	—	Hospitals scrutinize robotics purchases; “big, beautiful bill”/funding dynamics; more flexible capital models	Shifting to flexible models

Management Commentary

Strategy and execution: “Q3 revenue rose 23%, driven by 10% growth in our US Spine business… Strength in revenue translated into enhanced earnings and profitability, with meaningful improvements in adjusted gross margins and operating expenses” — Keith Pfeil, CEO .
Cash generation and capital returns: “We achieved record non-GAAP free cash flow of $213.9 million… executed share repurchases of $40 million… $255.5 million through the first nine months of 2025” — Kyle Kline, CFO .
Nevro progress: “The recently acquired Nevro business continued to exceed expectations… will now be accretive to non-GAAP EPS in fiscal year 2025” — Management .
Margin roadmap: “We continue to see… adjusted gross profit… four straight quarters of sequential improvement… ultimately drive a return to mid-70s adjusted gross profit” — CFO .
Enabling Tech strategy: “We have increased our flexibility of capital deal structures… overarching goal remains focused on achieving increased spinal implant growth” — CEO .

Q&A Highlights

U.S. Core Spine sustainability: Broad-based growth across implants, new product uptake (e.g., DuraPro drills), and competitive rep recruiting underpin durability; 32-week consecutive growth streak cited .
Enabling Technologies model shift: Hospitals moving toward leases/rentals/per-click; not near 50% yet, but mix is “significantly higher” vs prior years, smoothing revenue but aiding pull-through over time .
Nevro profitability: Rapid margin improvement from negative in Q2 to 16.2% adj EBITDA in Q3 via R&D focus, back-office rationalization; next leg is COGS and SG&A efficiencies to lift gross margin toward 70s and lower ~50% SG&A burden .
Gross margin cadence: Expect continued sequential improvements through 2026 with manufacturing initiatives; long-term target mid-70s reiterated (no specific 2026 guide) .
Guidance color: FY25 non-GAAP tax rate 24–25%; Q3 benefitted from ~$0.07 non-recurring tax favorability; 2025 adjusted gross profit 67–68% .

Estimates Context

Q3 beats: Revenue $769.0M vs $738.0M*; non-GAAP EPS $1.18 vs $0.77*; adjusted EBITDA $252.6M vs $199.0M* — driven by U.S. Spine, synergies, and Nevro turning positive .
FY25 guidance vs Street: Revenue $2.86–$2.90B vs ~$2.89B*; non-GAAP EPS $3.75–$3.85 vs ~$3.76*; EPS guide sits above consensus midpoint; revenue guide bracket encompasses consensus .
Estimate revisions: Street likely to lift quarterly/fiscal EPS and EBITDA on operational momentum and earlier Nevro accretion, but may temper ET top-line given leasing shift and note Q3’s $0.07 tax tailwind as non-recurring .

Values retrieved from S&P Global.*

Key Takeaways for Investors

Positive inflection: clear revenue and margin acceleration, with a high-quality beat ex one-time tax help, underpinned by U.S. Spine and synergy capture .
Guidance reset higher: FY25 EPS raised materially above Street with earlier Nevro accretion; supports multiple expansion and estimate revisions .
Mix tailwinds: Base business growth (+7% YoY) and improving international/trauma offset ET softness; capital model flexibility should enhance implant pull-through LT .
Margin roadmap intact: sequential adjusted GM improvements; target mid-70s remains credible with manufacturing initiatives and integration synergies .
Cash optionality: record FCF and ample authorization ($435M) support continued buybacks alongside organic R&D/CapEx and selective M&A .
Near-term watch items: Enabling Tech leasing mix and hospital capex cycles; execution on Nevro COGS/SG&A actions; U.S. supply prioritization vs international growth pacing .
Trading setup: Raised FY guide, positive EPS surprise, and structural FCF strength are near-term catalysts; any ET-driven volatility may offer entry points given strengthening core .

Appendix: Additional Data

Q3 2025 P&L detail and reconciliations (selected)

GAAP net income: $119.0M; GAAP diluted EPS: $0.88
Non-GAAP net income: $159.35M; Non-GAAP diluted EPS: $1.18
Adjusted EBITDA: $252.6M (32.8% of sales)
U.S./International net sales: $617.6M / $151.4M
Base vs Nevro net sales: $669.8M / $99.3M
Free cash flow: $213.9M

Product and innovation updates

Robotic/navigation: launch of Excelsius XR AR headset; incremental 510(k) clearances for eGPS instruments increasing indications .
Trauma expansion: launch of ANTHEM Elbow Fracture System, broadening portfolio and supporting growth in trauma .