Globus Medical’s first quarter results were impacted by a mix of operational headwinds, with management pointing to softer enabling technology sales, temporary supply chain disruptions tied to the NuVasive integration, and timing of international distributor orders as key drivers. CEO Dan Scavilla described the quarter as a “blip” and stressed the company’s focus on resolving back orders and supply chain issues, adding, “We own a bad quarter. We’re going to go fix it and drive it forward.” Management acknowledged a cautious outlook due to these factors but noted that U.S. Spine business momentum and sales force retention remained positive.
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Globus Medical (GMED) Q1 CY2025 Highlights:
- Revenue: $598.1 million vs analyst estimates of $627.6 million (1.4% year-on-year decline, 4.7% miss)
- Adjusted EPS: $0.68 vs analyst expectations of $0.74 (8.6% miss)
- Adjusted EBITDA: $177.8 million vs analyst estimates of $195.4 million (29.7% margin, 9% miss)
- The company lifted its revenue guidance for the full year to $2.85 billion at the midpoint from $2.68 billion, a 6.5% increase
- Management lowered its full-year Adjusted EPS guidance to $3.15 at the midpoint, a 8.7% decrease
- Operating Margin: 16.2%, up from 1.3% in the same quarter last year
- Constant Currency Revenue was flat year on year (120% in the same quarter last year)
- Market Capitalization: $7.93 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Globus Medical’s Q1 Earnings Call
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Matt Miksic (Barclays) asked about the recoverability of Q1’s challenges and confidence in Q2 improvement. CEO Dan Scavilla said operational disruptions were temporary and expressed confidence that supply chain and back orders would recover quickly.
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Vik Chopra (Wells Fargo) questioned the impact of new competitor robots and financing trends on sales cycles. CFO Keith Pfeil said sales mix is still mostly outright purchases, but noted an increase in alternative financing options contributing to longer sales cycles.
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Matthew Blackman (Stifel) pressed for clarity on whether lost Q1 revenue would be regained through the year. Pfeil stated that most issues were temporary and management expects to make up for delayed sales as integration issues resolve.
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Shagun Singh (RBC) challenged the timing and strategic fit of the Nevro acquisition amid ongoing integration of NuVasive. Scavilla emphasized Nevro’s long-term potential and clarified the teams are managed separately to avoid operational distraction.
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Steve Lichtman (Oppenheimer) inquired about the impact of tariffs on margins. Pfeil explained that vertical integration and U.S. sourcing minimize tariff risk and that mitigation strategies are in place, so no significant margin impact is expected.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will watch (1) how quickly supply chain and integration issues are resolved, (2) the pace and profitability of Nevro’s integration and cost reductions, and (3) momentum in enabling technologies and spine product launches. Progress on distributor restocking, cross-selling initiatives, and margin stabilization will also be important markers of execution.
Globus Medical currently trades at $59, down from $72.41 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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