Medical device company Globus Medical (NYSE: GMED) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 22.9% year on year to $769 million. The company’s full-year revenue guidance of $2.88 billion at the midpoint came in 0.8% above analysts’ estimates. Its non-GAAP profit of $1.18 per share was 53.4% above analysts’ consensus estimates.

Is now the time to buy GMED? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Globus Medical’s third quarter results were met with a significant positive market reaction, reflecting the company’s outperformance on key metrics. Management attributed the strong quarter to robust growth in its U.S. Spine business and sustained contribution from the recently integrated Nevro business. CEO Keith Pfeil emphasized the breadth of growth across the core implant portfolio and highlighted the impact of aggressive competitive recruiting. He stated, “All signs point to strength within this core objective,” noting 32 consecutive weeks of growth in U.S. Spine. Operational efficiencies and synergy realization from the Nevro acquisition further supported margin expansion and profitability.

Looking ahead, management’s updated guidance is anchored in expectations for continued momentum in U.S. Spine, enhanced integration of Nevro, and ongoing operational discipline. CEO Keith Pfeil pointed to opportunities in expanding product development and increasing surgeon conversions, particularly within Nevro. He also noted efforts to modernize the joint replacement portfolio and leverage flexible capital deal structures to support implant sales growth. CFO Kyle Kline indicated a focus on sustained gross margin improvements, stating, “Smaller sequential improvement…continues as we move through 2025 and into 2026.”

Key Insights from Management’s Remarks

Management credited the quarter’s performance to strong execution in core U.S. markets, successful integration of Nevro, and targeted product investments, while also addressing shifts in capital sales models and geographic momentum.

• U.S. Spine sustained growth: The U.S. Spine segment experienced broad-based and consistent expansion, supported by competitive sales rep recruiting and a comprehensive product portfolio. Management noted 32 consecutive weeks of growth and highlighted that success stemmed not only from robotics-driven pull-through but also from new product launches and increased penetration across core implant categories.

• Nevro integration and profitability: The recently acquired Nevro business delivered sequential growth and achieved a positive adjusted EBITDA margin. CEO Keith Pfeil and CFO Kyle Kline detailed substantial cost reductions through elimination of redundant R&D and SG&A expenses, resulting in a turnaround from prior cash burn to positive free cash flow. Management believes further margin improvement is possible as sales and manufacturing become more efficient and new product development is prioritized.

• Enabling technologies revenue shift: Sales of enabling technologies, particularly EGPS robotic systems, declined year over year due to a shift in hospital purchasing preferences. Management explained that more hospitals are seeking flexible acquisition models such as operating leases and pay-per-use agreements, leading to less upfront revenue recognition but potentially stable long-term cash flows.

• International markets and trauma recovery: International revenues grew, with momentum in EMEA, Asia Pacific, and Latin America. Manufacturing challenges in the trauma business have been resolved, enabling renewed growth and expanded product offerings. CEO Pfeil called out the launch of a comprehensive elbow plating system, bringing the trauma portfolio to over 80% parity with competitors.

• Product innovation and portfolio expansion: The company launched ExcelsiusXR, an extended reality navigation headset, and received new FDA clearances for its ExcelsiusGPS platform. Management also outlined plans to modernize the joint replacement portfolio by early 2026, aiming to broaden its competitive position in orthopedic and neuromodulation markets.

Drivers of Future Performance

Globus Medical’s outlook is shaped by ongoing U.S. Spine momentum, further Nevro integration, and evolving capital sales strategies, with management focused on sustaining operational leverage and margin improvement.

• U.S. Spine and domestic demand: Management expects continued U.S. Spine growth, supported by strong surgeon engagement, competitive rep recruitment, and a steady pipeline for core implant products. The company is targeting high single-digit growth in this business, which remains its most profitable segment and key driver of margin expansion.

• Nevro business optimization: The integration of Nevro is projected to contribute incremental earnings through tighter cost control, restructured sales strategies, and expansion into adjacent therapies such as peripheral nerve and diabetic neuropathy. Leadership is cautious on forecasting full-year growth but sees early signs of stabilization and potential for margin gains as product development is ramped up.

• Flexible capital sales and hospital spend: The shift toward leasing and pay-per-use models for enabling technologies introduces long-term recurring cash flows but may slow near-term revenue recognition. Management is focused on operationalizing new sales approaches and believes these models will gradually become a larger share of capital placements, helping to secure durable implant revenue.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will watch (1) the pace of U.S. Spine growth and whether competitive rep recruiting maintains momentum, (2) margin trends as Nevro integration continues and cost actions mature, and (3) adoption of flexible sales models for enabling technologies. Modernization of the joint replacement portfolio and international market execution will also be key milestones.

Globus Medical currently trades at $78.65, up from $61.69 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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