Globus Medical (GMED) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked the one-year anniversary of the Globus-NuVasive merger, with the fourth consecutive quarter of combined sales growth and strong financial performance.

• Net sales for Q3 2024 were $625.7M, up 63% year-over-year, driven by the NuVasive acquisition and strong growth in both U.S. and international markets.

• GAAP net income rose to $51.8M, with GAAP diluted EPS at $0.38 and non-GAAP diluted EPS at $0.83, up 45.2% year-over-year.

• Integration is progressing well, with synergy actions underway and organizational structures implemented to reach steady state by year-end.

• Generated record operating and free cash flow, while continuing to invest in long-term growth and product innovation.

Financial highlights

• Q3 revenue was $625.7 million, up 63.1% as reported; day-adjusted sales growth was 60.8%.

• Non-GAAP adjusted EBITDA was $193.7M (31.0% of net sales), up from $112.9M (29.4%) in Q3 2023.

• GAAP net income was $51.8 million ($0.38 EPS) vs. $1 million ($0.01 EPS) prior year; non-GAAP net income was $114 million ($0.83 EPS), up 73.9%.

• Adjusted gross profit margin was 66.5%, compared to 69.7% in Q3 2023; GAAP gross profit margin was 53% (down from 62.2%).

• U.S. revenue was $495.8 million (up 60.3%); international revenue was $129.9 million (up 74.8%).

Outlook and guidance

• 2024 net sales guidance raised to $2.49–$2.5 billion, implying 3.9%–4.3% growth over 2023 pro forma revenues.

• 2024 non-GAAP EPS guidance updated to $2.90–$3.00 per share, reflecting operational improvements and a change in non-GAAP reporting.

• Full-year adjusted gross profit margin expected at 67%–68%; R&D expenses at 6.5%–7% of sales; SG&A to improve 1–2 percentage points over 2023.

• CapEx for 2024 expected at 4.5%–5.5% of sales.

• Management expects sufficient liquidity to meet obligations, including the $450M Senior Convertible Notes due March 2025.