GLOBUS MEDICAL INC

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with our audited consolidated financial statements and related notes for the year ended December 31, 2025, which are included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the United States (“U.S”) Securities and Exchange Commission (the “SEC”) on February 24, 2026. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” generally discusses the three and six months ended June 30, 2026 and 2025 and provides comparisons between the periods. A discussion of our Results of Operations for the three and six months ended June 30, 2025, can be found in “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations: Results of Operations; Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024” and “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations: Results of Operations; Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 filed with the SEC on August 7, 2025.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes that appear in Part I, Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with our audited consolidated financial statements and related notes for the year ended December 31, 2025, which are included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”) on February 24, 2026. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” generally discusses the three and nine months ended September 30, 2026 and 2025 and provides comparisons between the periods. A discussion of our Results of Operations for the three and nine months ended September 30, 2025, can be found in “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations: Results of Operations; Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024” and “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations: Results of Operations; Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 filed with the SEC on November 6, 2025.

Previous wording

Globus Medical, Inc. (together, as applicable, with its consolidated subsidiaries, the “Company,” “Globus,” “we,” “us” or “our”), headquartered in Audubon, Pennsylvania, is a medical device company that develops and commercializes healthcare solutions whose mission is to improve the quality of life of patients with musculoskeletal disorders. Founded in 2003, Globus is committed to medical device innovation and delivering exceptional service to hospitals, ambulatory surgery centers and physicians to advance patient care and improve efficiency. Since inception, Globus has listened to the voice of the surgeon to develop practical solutions and products to help surgeons effectively treat patients and improve lives.

Current wording

Globus Medical, Inc. (together, where applicable, with its consolidated subsidiaries, the “Company,” “Globus,” “we,” “us” or “our”), headquartered in Audubon, Pennsylvania, is a medical device company that develops and commercializes healthcare solutions whose mission is to improve the quality of life of patients with musculoskeletal disorders. Founded in 2003, Globus is committed to medical device innovation and delivering exceptional service to hospitals, ambulatory surgery centers and physicians to advance patient care and improve efficiency. Since inception, Globus has listened to the voice of the surgeon to develop practical solutions and products to help surgeons effectively treat patients and improve lives.

Previous wording

During the six months ended June 30, 2026, international net sales accounted for approximately 21.0% of our total net sales. We have sold our products and services in approximately 61 countries other than the U.S. through a combination of sales representatives employed by us and exclusive international distributors. We believe there are significant opportunities for us to increase our presence in both existing and new international markets through the continued expansion of our direct and distributor sales forces and through the commercialization of additional products.

Current wording

During the nine months ended September 30, 2026, international net sales accounted for approximately 20.2% of our total net sales. We have sold our products and services in approximately 60 countries other than the U.S. through a combination of sales representatives employed by us and exclusive international distributors. We believe there are significant opportunities for us to increase our presence in both existing and new international markets through the continued expansion of our direct and distributor sales forces and through the commercialization of additional products.

Previous wording

The preparation of the condensed consolidated financial statements requires us to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the condensed consolidated financial statements, and the reported amounts of sales and expenses during the reporting periods. There have been no material changes to the critical accounting policies and estimates as previously disclosed in“Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation” of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 24, 2026.

Current wording

The preparation of the condensed consolidated financial statements requires us to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the condensed consolidated financial statements, and the reported amounts of sales and expenses during the reporting periods. There have been no material changes to the critical accounting policies and estimates as previously disclosed in“Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 24, 2026.

Previous wording

International net sales increased by $25.9 million, or 18.0%, for the three months ended June 30, 2026. From a product standpoint, the increase was primarily driven by Musculoskeletal Solutions sales of $21.2 million and Nevro sales of $1.5 million. Enabling Technology sales increased by $3.2 million as compared to the same period in the prior-year period, primarily driven by increased unit placement. From a geographic standpoint, international net sales in the Europe and Middle East region increased $15.7 million, sales in the Latin American region increased $8.8 million and sales in the Asia Pacific region increased $1.4 million.

Current wording

International net sales decreased by $8.7 million, or 5.7%, for the three months ended September 30, 2026. From a product standpoint, the decrease was primarily driven by a decrease in Musculoskeletal Solutions sales of $8.6 million, which was caused by lower volumes of spine implantable device sales and spinal cord stimulation product sales resulting in decreases of $5.2 million and $3.4 million, respectively. From a geographic standpoint, international net sales in the Europe and Middle East region decreased by $4.8 million, sales in the Latin American region decreased by $2.5 million and sales in the Asia Pacific region decreased by $1.4 million. Foreign currency exchange rates on international net sales had a favorable impact of $1.1 million for the three months ended September 30, 2026.

Previous wording

The $7.3 million, or 2.9%, decrease in cost of sales for the three months ended June 30, 2026 was primarily driven by Nevro amortization of inventory step up of $6.0 million in the prior-year period, with no comparable event in the current-year period. Additionally, there was a decrease in product costs of $7.3 million. This was partially offset by an increase in freight costs of $3.5 million and an increase in depreciation of $1.3 million.

Current wording

The $19.6 million, or 7.8%, decrease in cost of sales for the three months ended September 30, 2026 was primarily driven by the Nevro Merger amortization of inventory step up of $7.0 million in the prior-year period, with no comparable event in the current-year period. Additionally, there was a decrease in product costs of $11.6 million due to manufacturing cost-cutting initiatives. This was partially offset by an increase in freight costs of $1.5 million.

Previous wording

The decrease of $16.8 million, or 5.5%, in selling, general and administrative expenses was primarily driven by a decrease of $19.0 million in employee-related expenses partially offset by an increase of $2.7 million in provision for litigation.

Current wording

The decrease of $25.1 million, or 8.0%, in selling, general and administrative expenses was primarily driven by a decrease of $24.6 million in provision for litigation.

Previous wording

Amortization of intangibles decreased by $0.6 million, or 2.1%, primarily driven by the finalization of amortization of intangible assets as compared to the three months ended June 30, 2025.

Current wording

Amortization of intangibles decreased by $0.3 million, or 0.9%, primarily driven by the finalization of amortization of intangible assets as compared to the three months ended September 30, 2025.

Previous wording

Acquisition-related costs decreased by $16.8 million, or 49.0%, primarily driven by the $26.1 million in expenses related to the Nevro Merger that were incurred during the six months ended June 30, 2025, with no comparable event in the current period. This decrease was partially offset by the change in the fair value of business acquisition liabilities. For the six months ended June 30, 2026, acquisition-related costs included $16.1 million of charges recorded from changes in the fair value of business acquisition liabilities driven by changes in market conditions and the achievement of certain performance conditions, compared to the $5.4 million recorded for the six-month period ended June 30, 2025.

Current wording

Acquisition-related costs increased by $3.4 million, or 126.5%, primarily driven by the change in the fair value of business acquisition liabilities. For the three months ended September 30, 2026, acquisition-related costs included $0.2 million of charges recorded from changes in the fair value of business acquisition liabilities driven by changes in market conditions and the achievement of certain performance conditions, compared to a benefit of $2.7 million recorded for the three-month period ended September 30, 2025.

Previous wording

The decrease in restructuring costs of $11.6 million, or 85.6% was primarily due to lower employee termination benefit expenses related to the 2024 Synergy Plan and the 2025 Strategic Integration Plan in the current-year period. Refer to“Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 15. Restructuring and Other Costs” for further information regarding the 2024 Synergy Plan and the 2025 Strategic Integration Plan.

Current wording

The decrease in restructuring costs of $0.4 million, or 111.9% was primarily due to lower employee termination benefit expenses related to the 2024 Synergy Plan and the 2025 Strategic Integration Plan in the current-year period. Refer to“Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 15. Restructuring and Other Costs” for further information regarding the 2024 Synergy Plan and the 2025 Strategic Integration Plan.

Previous wording

The $110.6 million decrease was due to the bargain purchase gain related to the Nevro Merger as of June 30, 2025, with no comparable event in the current period.

Current wording

The $3.8 million decrease was due to the bargain purchase gain related to the Nevro Merger as of September 30, 2025, with no comparable event in the current period.

Previous wording

For the three and six months ended June 30, 2026, the increase in the effective tax rate was due to a one-time tax benefit in the prior period related to state valuation allowance release and the impact of the non-taxable bargain purchase gain.

Current wording

For the three months ended September 30, 2026, the increase in the effective tax rate was predominantly due to a one-time tax benefit in the prior period related to state valuation allowance release and the impact of the non-taxable bargain purchase gain.

Previous wording

International net sales increased by $66.7 million, or 25.8%, for the six months ended June 30, 2026. From a product standpoint, the increase was primarily driven by Musculoskeletal Solutions sales of $41.9 million and Nevro sales of $17.0 million. Enabling Technology sales increased by $7.8 million as compared to the six-month period ended June 30, 2025, primarily driven by increased unit placement. From a geographic standpoint, international net sales in the Europe and Middle East region increased $46.6 million, sales in the Latin American region increased $14.0 million and sales in the Asia Pacific region increased $6.0 million.

Current wording

International net sales increased by $58.0 million, or 14.1%, for the nine months ended September 30, 2026. From a product standpoint, the increase was primarily driven by an increase in Musculoskeletal Solutions sales of $50.3 million, primarily driven by $29.7 million in spine implantable devices, spinal cord stimulation sales from the Nevro Merger of $13.5 million and trauma sales of $7.0 million. The increase in spine implantable devices sales and trauma sales are driven by higher volume, while spinal cord stimulation sales were due to the Nevro Merger occurring early in the second quarter of 2025. Enabling Technologies sales increased by $7.7 million as compared to the nine-month period ended September 30, 2025, primarily driven by increased unit deployment of 180%. From a geographic standpoint, international net sales in the Europe and Middle East region increased by $42.0 million, sales in the Latin American region increased by $11.4 million and sales in the Asia Pacific region increased by $4.6 million. Foreign currency exchange rates on international net sales had an unfavorable impact of $10.4 million for the nine months ended September 30, 2026.

Previous wording

The $31.3 million, or 7.1%, increase in cost of sales for the six months ended June 30, 2026 was primarily driven by the cost of sales from Nevro products of $8.9 million, an increase in freight cost of $7.9 million, an increase in product cost of $6.9 million driven primarily by higher volume, and an increase in depreciation of $3.3 million.

Current wording

The $11.7 million, or 1.7%, increase in cost of sales for the nine months ended September 30, 2026 was primarily driven by an increase in freight cost of $9.1 million, and an increase in product cost of $7.4 million driven primarily by higher volume, and was partially offset by cost-cutting initiatives. Additionally, there was an increase in depreciation of $3.6 million. These increases were partially offset by a decrease in the cost of sales from Nevro products of $7.6 million.

Previous wording

The $3.6 million, or 9.1%, decrease in research and development expenses was driven by a decrease of $4.0 million in employee-related expenses.

Current wording

The $3.7 million, or 3.4%, decrease in research and development expenses was driven by decreases of $2.8 million in employee-related expenses and $1.2 million in consulting and outside services.

Previous wording

The increase of $38.2 million, or 7.0%, in selling, general and administrative expenses was primarily driven by an increase of $27.3 million for Nevro expenses, as well as a $9.1 million increase in employee-related expenses, a $4.1 million increase in provision for litigation, a $2.5 million increase in meeting expenses and a $1.3 million increase in outside consulting fees. These increases were partially offset by a decrease of $6.3 million in taxes and fees.

Current wording

The increase of $13.1 million, or 1.5%, in selling, general and administrative expenses was primarily driven by an increase of $15.4 million for Nevro expenses, as well as a $17.4 million increase in employee-related expenses and a $4.0 million increase in meeting expenses. These increases were partially offset by a decrease of $20.5 million in provision for litigation and a decrease of $3.7 million in taxes and fees.

Previous wording

Acquisition-related costs decreased by $22.1 million, or 66.6%, primarily driven by the $26.1 million in expenses related to the Nevro Merger that were incurred during the three months ended June 30, 2025, with no comparable event in the current period. This decrease was partially offset by the change in the fair value of business acquisition liabilities. For the three months ended June 30, 2026, acquisition-related costs included $9.7 million of charges recorded from changes in the fair value of business acquisition liabilities driven by changes in market conditions and the achievement of certain performance conditions, compared to the $5.2 million recorded for the three-month period ended June 30, 2025.

Current wording

Acquisition-related costs decreased by $13.3 million, or 42.3%, primarily driven by the $26.1 million in expenses related to the Nevro Merger that were incurred during the nine months ended September 30, 2025, with no comparable event in the current period. This decrease was partially offset by the change in the fair value of business acquisition liabilities. For the nine months ended September 30, 2026, acquisition-related costs included $16.2 million of charges recorded from changes in the fair value of business acquisition liabilities driven by changes in market conditions and the achievement of certain performance conditions, compared to the $2.7 million recorded for the nine-month period ended September 30, 2025.

Previous wording

The $6.4 million, or 47.1%, decrease in restructuring costs was primarily due to lower employee termination benefit expenses related to the 2024 Synergy Plan and the 2025 Strategic Integration Plan during the current-year period. Refer to“Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 15. Restructuring and Other Costs” for further information regarding the 2024 Synergy Plan and the 2025 Strategic Integration Plan.

Current wording

The $6.8 million, or 48.8%, decrease in restructuring costs was primarily due to lower employee termination benefit expenses related to the 2024 Synergy Plan and the 2025 Strategic Integration Plan during the current-year period. Refer to“Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 15. Restructuring and Other Costs” for further information regarding the 2024 Synergy Plan and the 2025 Strategic Integration Plan.

Previous wording

The $109.4 million decrease was due to the bargain purchase gain related to the Nevro Merger as of June 30, 2025 compared to the $1.1 million measurement period adjustments booked as of the six months ended June 30, 2026.

Current wording

The $113.2 million decrease was due to the bargain purchase gain related to the Nevro Merger as of September 30, 2025 compared to the $1.1 million measurement period adjustments from the Nevro Merger booked as of the nine months ended September 30, 2026.

Previous wording

Other income/(expense) increased by $4.8 million, or 58.6%, primarily driven by a net increase in interest income of $10.1 million, which was driven by a $7.3 million decrease in interest expense and a $2.9 million increase in interest income. This was offset by a foreign currency loss in the current period compared to a $4.3 million gain in the same period of the prior year. Refer to“Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 11. Debt” for further information regarding the decrease in interest expense.

Current wording

Other income/(expense) increased by $7.7 million, or 69.8%, primarily driven by a $9.3 million increase in interest income resulting from higher average investment balances and increased market rates. Additionally, there was a $7.8 million decrease in interest expense resulting from the repayment of the 2025 Notes (as defined in Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 11. Debt) in March 2025. This was offset by a foreign currency loss of $4.7 million in the current period compared to a $4.1 million gain in the same period of the prior year.

Previous wording

For the three and six months ended June 30, 2026, the increase in the effective tax rate was due to a one-time tax benefit in the prior period related to state valuation allowance release and the impact of the non-taxable bargain purchase gain.

Current wording

For the nine months ended September 30, 2026, the increase in the effective tax rate was predominantly due to a one-time tax benefit in the prior period related to state valuation allowance release and the impact of the non-taxable bargain purchase gain.

Previous wording

Our principal source of liquidity is cash flow from operating activities, as well as our cash and cash equivalents and marketable securities, which we believe will provide sufficient funding for us to meet our liquidity requirements for the foreseeable future. Our principal liquidity requirements are to fund working capital, research and development, including clinical trials, capital expenditures primarily related to investment in surgical sets required to maintain and expand our business, contingent consideration achievement obligations, potential future business or intellectual property acquisitions. We expect to continue to make investments in surgical sets as we launch new products, increase the size of our U.S. sales force, and expand into international markets. Future litigation or requirements to escrow funds could also materially impact our liquidity and our ability to invest in and operate our business on an ongoing basis. We may require additional liquidity as we continue to execute our business strategy. To the extent that we require new sources of liquidity, we may consider incurring debt, including borrowing against our existing credit facility, convertible debt instruments, and/or raising additional funds through an equity offering. The sale of additional equity may result in dilution to our stockholders. There is no assurance that we will be able to secure such additional funding on terms acceptable to us, or at all.

Current wording

Our principal source of liquidity is cash flow from operating activities, as well as our cash and cash equivalents and marketable securities, which we believe will provide sufficient funding for us to meet our liquidity requirements for the foreseeable future. Our principal liquidity requirements are to fund working capital, research and development, including clinical trials, capital expenditures primarily related to investment in surgical sets required to maintain and expand our business, contingent consideration obligations, and potential future business or intellectual property acquisitions. We expect to continue to make investments in surgical sets as we launch new products, increase the size of our U.S. sales force, and expand into international markets. Future litigation or requirements to escrow funds could also materially impact our liquidity and our ability to invest in and operate our business on an ongoing basis. We may require additional liquidity as we continue to execute our business strategy. To the extent that we require new sources of liquidity, we may consider incurring debt, including borrowings under our existing credit facility or the issuance of convertible debt instruments, and/or raising additional funds through an equity offering. The sale of additional equity may result in dilution to our stockholders. There is no assurance that we will be able to secure such additional funding on terms acceptable to us, or at all.

Previous wording

The higher net cash provided by operating activities for the six months ended June 30, 2026, was primarily the result of a higher income before taxes of $55.1 million, favorable changes in income taxes paid of $62.6 million and non-cash adjustments of $128.5 million. This was primarily due to the bargain purchase gain recognized during the six months ended June 30, 2025. This increase was partially offset by unfavorable changes in accounts receivable of $47.6 million and inventory of $32.8 million.

Current wording

The higher net cash provided by operating activities for the nine months ended September 30, 2026, was primarily the result of an increase in income before taxes of $94.3 million, favorable changes in income taxes paid of $29.3 million and changes in non-cash adjustments of $131.1 million. The change in non-cash adjustments was primarily due to the bargain purchase gain recognized during the nine months ended September 30, 2025. This increase was partially offset by unfavorable changes in accrued expenses and other liabilities of $40.8 million and inventory of $42.7 million.

Previous wording

The higher net cash used in investing activities for the six months ended June 30, 2026, was primarily due to an increase in purchases of marketable securities of $252.3 million and a decrease in sales and maturities of marketable securities of $113.8 million and $39.0 million, respectively. This was partially offset by acquisition of businesses, net of cash acquired and purchases of intangible and other assets of $251.1 million.

Current wording

The higher net cash used in investing activities for the nine months ended September 30, 2026, was primarily due to an increase in purchases of marketable securities of $361.7 million and a decrease in sales and maturities of marketable securities of $107.4 million. This was partially offset by a decrease in cash used for the acquisition of businesses, net of cash acquired and purchases of intangible and other assets of $239.8 million.

Previous wording

The lower net cash used in financing activities for the six months ended June 30, 2026, was primarily due to the absence of senior convertible note repayments in 2026, as 2025 reflected the final payment of the 2025 Notes(as defined in Note 11. Debt). Additionally, a decrease in repurchases of the Company's Class A Common Stock (“Class A Common”) of $79.4 million, and an increase of $21.0 million in net proceeds from the exercise of stock options also contributed to the decrease in cash used in financing activities during the six months ended June 30, 2026.

Current wording

The lower net cash used in financing activities for the nine months ended September 30, 2026, was primarily due to the absence of senior convertible note repayments in 2026, as 2025 reflected the final payment of the 2025 Notes (as defined in Note 11. Debt). Additionally, a decrease in repurchases of the Company's Class A Common Stock (“Class A Common”) of $23.6 million, and an increase of $25.8 million in net proceeds from the exercise of stock options also contributed to the decrease in cash used in financing activities during the nine months ended September 30, 2026.

Previous wording

For further details on recently issued accounting pronouncements, please refer to“Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 2. Summary of Significant Accounting Policies, (i) Recently Issued Accounting Pronouncements and (j) Recently Adopted Accounting Pronouncements” above.

Current wording

For further details on recently issued and recently adopted accounting pronouncements, please refer to“Part I; Item 1. Financial Statements; Notes to Condensed Consolidated Financial Statements (Unaudited); Note 2. Summary of Significant Accounting Policies, (j) Recently Issued Accounting Pronouncements and (k) Recently Adopted Accounting Pronouncements” above.