Medical device company Globus Medical (NYSE: GMED) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 18.4% year on year to $745.3 million. The company expects the full year’s revenue to be around $2.85 billion, close to analysts’ estimates. Its non-GAAP profit of $0.86 per share was 14.1% above analysts’ consensus estimates.

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“Q2 results were led by our US Spine business, growing 5.7%, as reported and 7.4% on a day-adjusted basis. US Spine had sustained momentum during the quarter, posting its highest sequential revenue growth since the second quarter of 2022,” commented Keith Pfeil, President and Chief Executive Officer.

Company Overview

With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE: GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Globus Medical’s 28.6% annualized revenue growth over the last five years was exceptional. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Globus Medical’s annualized revenue growth of 54.7% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

We can dig further into the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 62.3% year-on-year growth. Because this number is better than its normal revenue growth, we can see that foreign exchange rates have been a headwind for Globus Medical.

This quarter, Globus Medical reported year-on-year revenue growth of 18.4%, and its $745.3 million of revenue exceeded Wall Street’s estimates by 0.7%.

Looking ahead, sell-side analysts expect revenue to grow 14.8% over the next 12 months, a deceleration versus the last two years. Still, this projection is noteworthy and suggests the market is forecasting success for its products and services.

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Adjusted Operating Margin

Globus Medical has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 23.2%.

Analyzing the trend in its profitability, Globus Medical’s adjusted operating margin decreased by 3.3 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 1.2 percentage points. We still like Globus Medical but would like to see some improvement in the future.

In Q2, Globus Medical generated an adjusted operating margin profit margin of 21.3%, down 3.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Globus Medical’s EPS grew at an astounding 20.2% compounded annual growth rate over the last five years. Despite its adjusted operating margin improvement during that time, this performance was lower than its 28.6% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

Diving into Globus Medical’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Globus Medical’s adjusted operating margin declined by 3.3 percentage points over the last five years. Its share count also grew by 40%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q2, Globus Medical reported adjusted EPS at $0.86, up from $0.75 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Globus Medical’s full-year EPS of $3.21 to grow 6.5%.

Key Takeaways from Globus Medical’s Q2 Results

We enjoyed seeing Globus Medical beat analysts’ constant currency revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance was in line. Overall, this print had some key positives. The stock traded up 3.6% to $56.05 immediately following the results.

So do we think Globus Medical is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.