Globus Medical, Inc. Class A

Welcome to Globus Medical's second quarter 2026 earnings call. At this time, all lines will be on mute and a Q&A session will be held after the prepared remarks. I will now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, please go ahead.

Thank you, Sarah, and thank you everyone for being with us today. Joining today's call from Globus Medical will be Keith Pfeil, President and Chief Executive Officer, and Kyle Klin, 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 gap 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, and good afternoon, everyone. Thank you for joining us on today's call. We completed an exceptional second quarter, positioning us for a strong 2026 as we move into the second half of the year. At a top level, Q2 revenue was $789.6 million, growing 6% as reported. Excluding Nevro, Q2 revenue growth was 9%, led by 7% U.S. spine growth and 14% growth in international spine. Fully diluted non-GAAP earnings per share was $1.34, growing 56% compared to the prior quarter, while Q2 adjusted EBITDA was 35.4%, growing 34% in dollars, and 740 basis points over the prior year quarter. During the quarter, we also deployed $136 million to repurchase 1.6 million shares. Looking back since 2022, Globus has more than tripled our top line and earnings while developing a scalable working model to deliver these results over the long term. Our focus on organic growth combined with the scale from the NuVasive merger and the Nevro acquisition underscores our commitment to delivering value creation for our shareholders. We've successfully demonstrated our ability to bring together the two best in class buying portfolios while expanding our commercial distribution and operating with a sense of urgency in a manner that exhibits financial discipline through earnings accretion and increasing returns on capital. Our team has launched over 25 products over the past 36 months, demonstrating our unwavering focus on organic product development. The combination of new products and our significantly expanded worldwide sales force has allowed us to continue taking market share. The acquisition of Nevro with a clinically superior pain product opens the door for us expanding our addressable market into many exciting areas while bringing that franchise into our business model. With all the changes occurred the past three years, it's easy to look past what has been accomplished while still maintaining the ethos of what Globus was founded upon. Now let's move into sales. Musculoskeletal sales were $763.5 million, growing 8% versus the prior year quarter and 4% sequentially. The growth drivers are Spine, both U.S. and international, as well as Trauma. U.S. Spine continues to take significant market share, growing 7%, as reported, on strong procedural volumes. Competitive recruiting, pull-through from robotics, and product launches continue to fuel growth. Our competitive hires in the second quarter were double the amount hired in Q1, and it represents the second highest onboarding in the past eight quarters. Strategically, competitive recruiting has and will remain at the forefront of our growth strategy. Growth remains broad across U.S. Spine, with double-digit growth seen in many products, such as Sable, ELSA, Hedron C, Reline C, and Reline Open. Power Tools continues to drive uptake, with Durapro growing over 250% in the second quarter. International Spine grew 14% as reported and 12% on a constant currency basis led by mid-teens growth across key EMEA markets, namely Italy, Spain, and Poland. APAC growth was broad-based across the region, while LATAM generated its growth mainly from Brazil and Colombia. Overall, Q2 International Spine performance reflects our strategy of going deeper in the territories in which we operate. The focus and infrastructure are such that we can position ourselves to see continued above market growth moving ahead. Trauma revenue grew 31% versus the prior year quarter and 18% sequentially as we continue to drive share growth in our core trauma line while returning to normal with supply in our precise product line, allowing us to fully satisfy U.S. demand while also turning on numerous OUS markets. We are actively capturing market share and attracting top sales talent as our product portfolio has grown and has become differentiated. We are also beginning to see tremendous interest from surgeons, hospitals, and competitive sales reps in our product portfolio as a full portfolio trauma alternative. We see our trauma business as a long-term growth driver moving ahead. Enabling tech sales were $26.1 million, declining 26% in the second quarter, driven by our continued shift towards greater flexibility in our capital acquisition model. Despite the decline in INR revenue, we are seeing early evidence of success with our new model as eGPS and eHub units deployed, whether sold, leased, or rented, grew 11% sequentially and 25% versus the prior year quarter, both data points validating the demand for Excelsior's technology. Robotic utilization continues to expand with over 137,000 procedures performed. We remain steadfast and confident in the long-term strategy of our revised approach to capital deployment. Our overarching focus is to achieve above-market growth of our implant technology, disposables, and service by launching successful capital programs, creating the catalyst for pull-through revenue. Q2 Nevro sales were essentially flat to Q1, consistent with our comments made last quarter and in line with our expectations as we rapidly integrate Nevro into the globus business model of sustained share growth gains driven by new product development, Salesforce expansion, and disciplined operational execution. Recruiting has been the primary area of focus within the sales force and we've seen success in filling open roles with roughly 75% of those roles filled during the quarter. Looking ahead, we remain active on both the recruiting and training fronts. Our near-term goals are focused around driving trial volumes higher where we expect to see improvement as we move through the back half of the year with the goal of returning to historical trial levels late in Q4. During the quarter, we launched three new products. two in trauma and one in spine, which I will touch on quickly. The trauma products include the Audubon Hip Fastener and the Tensor Suture Button System. Spinal product is Reline One. The Audubon Hip Fastener is engineered to offer robust fixation and resistance to enhance stability with minimal disruption to workflow. This product is designed to allow surgeons to treat patients with poor bone quality with a greater level of confidence and uniquely positions our Audubon Intramedullary Nailing System. The Tensure Suture Button System is engineered to redefine suture management in the OR. The system features a self-locking suture and an inserter with integrated tensioning handles, which provide a more streamlined approach for tensioning through a single incision. Tensure is compatible with Anthem Ankle and 1 3rd Tubular Plates to offer surgeons a complete ankle solution. Reline 1 is designed to address the unmet need for true single-step screw placement in order to reduce procedural steps increase efficiency, and minimize patient risk. The ratchet retraction handle, screw design, and stylet tip geometry work together to achieve these benefits through a differentiated procedural solution. ReLine One is a premier solution for mass T-lift and minimally invasive posterior fixation. Last quarter, I had mentioned receiving FDA 510K clearances for both our surgeon-designed, patient-specific script spacer system, comprising of seven patient-specific lumbar interbody systems as well as our surgeon designed patient specific script rods. Script lumbar spacers are static, static integrated and expandable thoracolumbar interbody fusion devices additively manufactured with patient matched end plate topography for maximum stability. We're expecting to launch these systems later in Q3. The patient specific trip spacers may be placed using Excelsis GPS insurance for navigation with Excelsis GPS, Excelsis Hub, and Excelsius XR. SCRIPT patient rods are precision bent to the surgeon's pedicle screw placement plan and designed to reduce time spent on intraoperative rod bending. Rods are compatible with our Creo, Reline and Revere pedicle screw systems for both open and MIS procedures. SCRIPT Studio screw plans can be uploaded to our Excelsius GPS and Excelsius Hub systems for robotically navigated screw placement intraoperatively. Our platform keeps the physician at the center of the design and planning process with an intuitive interface, allowing the surgeon to efficiently design disc height restoration, spinal alignment, and pedicle screw placement, translating their precise clinical intent directly into the implant design. Our software is treated as an advanced tool rather than a replacement for clinical judgment, ensuring the implant perfectly executes to the surgeon's operative strategy. Our expandable offering incorporates our proven technology allowing surgeons to insert the implant at a lower height designed to minimize nerve retraction and reduce the impaction forces required to implant the spacers. Once in the disc space, the spacer can be expanded to restore optimal disc height. Our patient-matched spacers and rods are bundled with our high-quality implants and best-in-class disc prep and retractor systems while integrating with our Excelsior Suite, thus ensuring final placement matches a digital pre-op plan to ensure proper navigated placement. With our script clearances, we will be the only company positioned to offer a complete portfolio of patient-specific lumbar interbody spacers and rods integrated with our enabling technology, truly establishing us as the one-stop shop for lumbar patient-specific implants. Looking ahead, Specific Focus is centered around organic product development with well over 60 projects in process. We are committed to leading with innovation and purpose. Our in-house development team is expanding to account for greater project complexity as we work to bring new and exciting products to market that address unmet clinical needs. We are continually working to improve the efficient flow of organic product development from concept to production such that we can speed up the launch of new products moving forward. The last few years were spent largely building a broader platform within musculoskeletal care across spine, trauma, enabling tech, and neuromodulation. We've assembled a stronger Globus bag that is the platform for the future, allowing us to expand our research into various new areas of unmet clinical needs. We're leaning into data, analytics, and AI. It's not just about treating one patient, it's how we treat that patient and learn so we can help others more effectively and faster. It's how we become smarter to further assist our surgeon partners and clinicians in patient selection and surgical execution. We are developing a surgical intelligence ecosystem that will accelerate digital solutions through strategic investments so we can bring together intelligent patient selection, enabling tech-driven proceduralization of surgical technique, while constantly adding to our complementary implants and instruments to improve surgical outcomes. It's not about the next quarter, rather it's about driving long-term, sustainable development to drive market disruption and differentiation. I'm thankful to all of our Globus team members for their hard work and dedication in helping us deliver upon this fantastic quarter. Your teamwork, dedication, and focus are how we continually work to solve unmet clinical needs. I'll now turn the call over to Kyle.