Non-GAAP diluted earnings per share of $1.18, growing 22.9% and 42.6%, respectively, over the prior year quarter. In addition, free cash flow was a record for the third quarter, delivering $213.9 million. The recently acquired Nevro business delivered $99.3 million in revenue during the quarter. The Nevro business also delivered a positive adjusted EBITDA margin, finishing at 16.2%.

Our overall results reflect continued market penetration and earnings expansion that is sustainable and enduring. spine during every week in Q3, which has carried forward into Q4, as we now sit at 32 weeks of consecutive growth. We remain laser-focused on attracting and retaining the best long-term sales talent who will help us drive sustainable growth. spine revenue, product development projects, set and inventory deliveries, recruiting, as well as enabling tech placements.

Q3 enabling technologies revenue was $28 million, declining 27% to the prior year quarter, driven primarily by lower sales of eGPS systems. While our view of the pipeline and its strength remains positive, we have not closed sales at the same pace and cadence as we have in years past. While a significant portion of this relates to fewer full revenue cash deals, we have increased our flexibility of capital deal structures as our overarching goal remains focused on achieving increased spinal implant growth. Our install base continues to drive strong recurring revenue growth with implant pull-through, service contracts, and disposal revenue, with robotic procedures now surpassing 115,000 cases.

What went well
  • Q3 sales were $769 million, growing 22.9%, with non-GAAP diluted EPS of $1.18 growing 42.6% over the prior year quarter.
  • Free cash flow was a third-quarter record of $213.9 million, and operating cash flow was $249.7 million.
  • U.S. spine grew 9.6% as reported, with growth in every week of Q3 carrying into Q4, reaching 32 consecutive weeks of growth.
  • The base Globus business delivered adjusted EBITDA margins of 35.3%, growing 435 basis points over the prior year quarter.
  • Nevro delivered $99.3 million in revenue, growing 4.9% sequentially as its strongest quarter of 2025, with adjusted EBITDA margin improving to 16.2% from -1.4% in Q2 and generating $8.5 million of free cash flow versus a $29 million burn in Q2.
  • Trauma grew 17.2% as reported (highest quarterly revenue since inception) and adjusted gross profit reached 68.1%, a fourth straight quarter of sequential improvement, enabling an upward revision to full-year guidance.
What went wrong
  • Enabling Technologies revenue was $28 million, declining 27% versus the prior year quarter, driven primarily by lower ExcelsiusGPS system sales and fewer full-revenue cash deals as deal timelines elongated.
  • International spine growth was modest at 5.6% as reported (2.9% constant currency), held back by one fewer selling day in Japan and the prioritization of U.S. supply over international.
  • SG&A included a one-time net litigation charge of $28.3 million, and international supply remained constrained as the U.S. was prioritized.

Guidance Changes

MetricPeriodCurrent guidance
Full-year financial guidanceFY2025revised upward (raised)
Total adjusted gross profitFY202567%-68% of consolidated revenue (updated)
Total R&D expenseFY20255%-5.5% of consolidated revenue (updated)
Full-year non-GAAP tax rateFY2025approximately 24%-25% (updated)

Performance Breakdown

MetricYoYNote
Total Q3 revenue +22.9% as reported (+22.3% constant currency) Sales growth across most businesses led by U.S. spine plus Nevro contribution
U.S. spine +9.6% as reported Broad-based implant growth, competitive rep recruiting, and robotic pull-through
Enabling Technologies -26.8% as reported Lower ExcelsiusGPS sales and fewer full-revenue cash deals amid elongated deal timelines
Trauma +17.2% as reported (domestic core and NSO +27.6%) Precice manufacturing challenges resolved, supporting accelerated growth
Neuromonitoring +15.8% as reported Anniversarying the mid-2024 reimbursement headwinds
International spine +5.6% as reported (+2.9% constant currency) One fewer selling day in Japan and U.S.-prioritized supply, with sequential improvement
Adjusted gross profit 68.1% vs 66.5% Favorable sales mix and synergy execution; 70 bps boost from Q2

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Enabling Technologies sales modelPrimarily outright cash robot salesIncreased flexibility with fair-market-value leases and pay-per-click; lease/rental mix significantly higher than prior yearsShifting
U.S. spine momentumReaccelerated to 7.4% day-adjusted in Q29.6% as reported, 32 consecutive weeks of growth, seeking to stabilize as high-single-digit above-market growerAccelerating
Nevro integrationOperating/free cash burn of $26.3M/$29M in Q2, -1.4% EBITDA16.2% EBITDA, $8.5M free cash flow, sequential sales growth, now FY2025 EPS accretiveImproving
Margin path to mid-70sSequential improvement underwayFour straight quarters of adjusted gross profit improvement, gradual progress with bigger step toward end of 2026 from manufacturing in-sourcingImproving

Q&A Summary

Where is the U.S. spine growth coming from and what does the operating-lease shift mean for modeling enabling tech?
Keith Pfeil said strength is broad across all spine categories including DuraPro drills, driven by core implants, robotic pull-through, new products, and competitive reps. On leases, he said the model is shifting more aggressively away from upfront purchases toward fair-market-value leases and pay-per-click that spread revenue over three to five years, but declined to give specific modeling guidance.
What are your expectations for Nevro margin progression over the next 12-18 months?
Keith Pfeil said near-term actions targeted redundant spending without touching sales and manufacturing, and the next year focuses on new product development and growing the sales force through rep conversions. Gross margin was about 67%-68% and SG&A about 49% of sales, both areas they aim to improve.
Have you seen a step up in leases in Q3 and could you reach the 50%+ lease mix seen by other robot makers?
Keith Pfeil said they are definitely not approaching over 50%, but the 2025 mix of rentals and leases is significantly higher than previous years, and additional acquisition options may have slowed some deals while the pipeline remains very strong.
Where have you achieved Nevro cost-outs and synergies so far and what is yet to come?
Kyle Kline said they started in R&D by aligning the team to the Globus approach and removing redundant costs, then SG&A back-office staffing and ancillary spend. Going forward they will focus on cost of goods sold to lift gross profit from the mid-60s into the 70s and further SG&A given the ~50% SG&A margin.
Can you give directional color on 2026 puts and takes across spine, Nevro, trauma, and EBITDA margin?
Keith Pfeil declined detailed color but said the U.S. spine market looks strong, international should improve toward 10%-15% growth over time, trauma is positioned to grow with Precice issues behind, and base Globus EBITDA reached 35% in Q3, with the long-term goal in the mid-30s though not guiding 2026.
What reasons have hospitals given for slower enabling-tech decision-making and could lower-cost navigation options help?
Keith Pfeil cited more competition requiring hospitals to review all offerings, plus uncertainty around Medicare/Medicaid funding and hospitals diverting capital toward ASCs and new facilities. He said this supports operating leases taking a bigger share, and the XR headset must be paired with the ExcelsiusHub and E3D for freehand navigation.

More on Globus Medical Inc

Reported 2025-11-06 · figures from the Globus Medical Inc Q3 2025 earnings call.

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