Globus Medical, Inc.
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Item 1. Business
Overview
Globus Medical, Inc. (together, as applicable, with its consolidated subsidiaries, “Globus,” the “Company,” “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.
Globus is an engineering-driven company with a history of rapidly developing and commercializing advanced products and procedures to address treatment challenges. With 9 product launches in 2025 and operations across 65 countries worldwide, we offer a comprehensive portfolio of innovative and differentiated technologies that are used to treat a variety of musculoskeletal conditions. Although we manage our business globally within one reportable segment, we separate our products and services into two major categories: Musculoskeletal Solutions and Enabling Technologies.
NuVasive Merger
As previously disclosed, on September 1, 2023, pursuant to that certain merger agreement (the “NuVasive Merger Agreement”) with NuVasive, Inc. (“NuVasive”) and Zebra Merger Sub Inc., a wholly owned subsidiary of the Company (“Zebra Merger Sub”), Zebra Merger Sub, merged with and into NuVasive, with NuVasive surviving as a wholly owned subsidiary of the Company (the “NuVasive Merger”). Under the NuVasive Merger Agreement, each share of common stock, par value $0.001 per share, of NuVasive issued and outstanding immediately prior to the effective time of the NuVasive Merger (other than certain excluded shares as described in the NuVasive Merger Agreement) was cancelled and converted into the right to receive 0.75 fully paid and non-assessable shares of Class A common stock of Globus, $0.001 par value per share, and the right to receive cash in lieu of fractional shares.
Nevro Merger
As previously disclosed, on April 3, 2025, pursuant to the terms of that certain merger agreement (the “Nevro Merger Agreement”) with Nevro Corp. (“Nevro”) and Palmer Merger Sub, Inc., a wholly owned subsidiary of the Company (“Palmer Merger Sub”), Palmer Merger Sub merged with and into Nevro (the “Nevro Merger” and, together with the NuVasive Merger, the NuVasive and Nevro Mergers”), with Nevro surviving as a wholly owned subsidiary of the Company. Upon the consummation of the Nevro Merger, each issued and outstanding share of common stock of Nevro, $0.001 par value per share, was cancelled and converted into the right to receive cash in an amount equal to $5.85 per share of common stock of Nevro, without interest and subject to any applicable withholding taxes.
Overall Business
Market
The primary market for our products is the United States (“U.S.”), where we sell our products through a combination of direct sales representatives employed by us and sales representatives employed by our exclusive independent distributors, who distribute our products on our behalf for a commission that is generally based on a percentage of sales. We believe there is significant opportunity to strengthen our position in the U.S. market by increasing the size of our sales force and continuing to add direct and distributor sales representatives in the future.
During the year ended December 31, 2025, international sales accounted for approximately 19.4% of our total sales. Internationally, we sell our products through a combination of direct 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, as well as through the commercialization of additional products.
Strategy
Our goal is to become the market leader in providing innovative solutions to promote healing in patients with musculoskeletal disorders. To achieve this goal, we employ the following business strategies:
•Leverage our integrated product development engine. We plan to continue developing new products, using the capabilities of our product development engine. We believe our team-oriented and highly-integrated development approach, active surgeon input, and demonstrated performance position us to maintain a rapid rate of new product launches. We launched 9 new
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products in 2025, including Excelsius XR® to further expand our Excelsius® ecosystem and RelineTM 3D Towers increasing our spinal products portfolio. We have a range of new products in various stages of development and expect to continue to regularly launch new products.
•Increase the size, scope and productivity of our exclusive U.S. sales force. We believe there is significant opportunity for us to further penetrate existing markets, and to enter new markets, by increasing the size and geographic scope of our exclusive U.S. sales force for Musculoskeletal Solutions. Through the NuVasive and Nevro Mergers, we have significantly grown our U.S. sales force. We expect to continue to increase the number of our direct and distributor sales representatives in the U.S., to expand into new geographic territories and to deepen our penetration in existing territories. We will also continue to provide our sales representatives with specialized development programs designed to improve their productivity.
•Continue to expand into international markets. As of December 31, 2025, we had an existing direct or distributor sales presence in 64 countries outside of the U.S. We expect to continue to increase our international presence through the commercialization of additional Musculoskeletal Solutions products in current markets and through the expansion of our international sales force in current and new markets.
•Pursue strategic acquisitions. The following provides a brief overview of the strategic acquisitions that we have completed since 2020.
During the second quarter of 2020, the Company acquired Synoste Oy, a Finnish engineering company that specializes in the research and development of a limb lengthening system. During the fourth quarter of 2021, the Company acquired Capstone Surgical Technologies, LLC, a company that engages in the business of creating advanced drill and robotic surgery platforms. During the fourth quarter of 2022, the Company acquired the membership interests of Harvest Biologics LLC, which engages in the business of selling systems that produce autologous biologics.
In 2023, we acquired NuVasive, a leader in spine technology innovation, with a mission to transform surgery, advance care, and change lives. NuVasive’s less-invasive, procedurally integrated surgical solutions are designed to deliver reproducible and clinically proven outcomes. The procedural portfolio includes surgical access instruments, spinal implants, fixation systems, biologics, software for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative neuromonitoring (“IONM”) technology and service offerings. The NuVasive Merger expanded our global commercial reach, increased operational capabilities and enhanced our comprehensive offerings of Musculoskeletal Solutions and Enabling Technologies.
In 2024, we completed a share acquisition of a biotechnology company focused on research and development for hemostasis solutions.
In the second quarter of 2025, we acquired Nevro, a global medical device company focused on delivering comprehensive, life-changing solutions that continue to set the standard for enduring patient outcomes in the treatment of chronic pain. Nevro’s comprehensive HFX™ spinal cord stimulation (“SCS”) platform includes the Senza® SCS system and support services for the treatment of chronic pain of the trunk and limb and painful diabetic neuropathy. Nevro also provides minimally invasive treatment options for patients suffering from chronic sacroiliac joint pain. The Nevro Merger positions us to further add to our product portfolio with the potential to alter the standard of care in the neuromodulation space and beyond.
We intend to continue to selectively pursue acquisitions and alliances that complement our strategic plan and provide innovative technologies, personnel with significant relevant experience, or increased market penetration. We regularly evaluate possible acquisitions and strategic relationships and believe that our resources and experience make us an attractive acquirer or partner.
The Globus Solution
We believe that our focus on actively listening and responding to the needs of our customers with high quality solutions separates us from our industry peers. Since 2003, we have introduced many products, including 9 products in 2025, designed for the treatment of musculoskeletal disorders. Given our robust product portfolio of unique and differentiated products, as well as the numerous disruptive products in various stages of development, we believe we are well positioned for growth in the musculoskeletal markets we operate in.
We believe that our innovative Musculoskeletal Solutions products, combined with our ability to provide world-class service through a highly trained and exclusive sales force and corporate account management, create significant value for our customers.
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Product & Service Categories
While we group our products and services into two categories, Musculoskeletal Solutions and Enabling Technologies, they are not limited to a particular technology, platform or surgical approach. Instead, our goal is to offer a comprehensive product suite that can be used to safely and effectively treat patients based on their specific anatomy and condition, and is customized to the surgeon’s training and surgical preference.
Musculoskeletal Solutions
Our Musculoskeletal Solutions consist primarily of implantable devices, biologics, accessories, unique surgical instruments, spinal cord stimulation treatment therapy, and neuromonitoring services, used in an expansive range of spinal, orthopedic and neurosurgical procedures. Musculoskeletal disorders are a leading driver of healthcare costs worldwide. Disorders range in severity from mild pain and loss of feeling to extreme pain and paralysis. These disorders are primarily caused by degenerative and congenital conditions, deformity, tumors and traumatic injuries. Treatment alternatives for musculoskeletal disorders range from non-operative conservative therapies to surgical interventions depending on the pathology. Conservative therapies include bed rest, medication, casting, bracing, and physical therapy. When conservative therapies are not indicated, or fail to provide adequate quality of life improvements, surgical interventions may be used. Surgical treatments for musculoskeletal disorders can be instrumented, which include the use of implants, or non-instrumented, which forego the use of hardware but may include biologics. Our spinal cord stimulation treatment therapy uses neuromodulation technology delivered by an implantable device that delivers electrical impulses to treat chronic pain. Our neuromonitoring services use proprietary software-driven nerve detection and avoidance technology and include IONM services to aid spine surgery.
Our broad spectrum of spine products addresses the vast majority of conditions affecting the spine including degenerative conditions, deformity, tumors, and trauma. With 20 years in this competitive market, we provide comprehensive solutions that facilitate both open and minimally invasive surgery (“MIS”) techniques. This includes traditional fusion implants such as pedicle screw and rod systems, plating systems, intervertebral spacers and corpectomy devices. We believe we pioneered innovative expandable solutions for interbody fusion, corpectomy and interspinous fixation that allow intraoperative customization of our devices to the patient’s anatomy, eliminating sequential trialing and potentially saving surgical time. We have also developed treatment options for motion preservation technologies, such as dynamic stabilization, total disc replacement and interspinous distraction devices, as well as interventional solutions to treat vertebral compression fractures. Our biologic solutions include regenerative biologic products such as allografts and synthetic alternatives that are adjunctive treatments typically used in combination with stabilizing implant hardware.
Our orthopedic trauma solutions are designed to treat a wide variety of orthopedic fracture patterns and patient anatomies in the upper and lower extremities as well as the pelvis and hip. Our orthopedic trauma portfolio spans core procedural categories including limb reconstruction, fracture plating, intramedullary nailing, external fixation, and compression screw technologies, anchored by the PRECICE™ limb reconstruction platform and the ANTHEM™ fracture plating system. These offerings – supported by intramedullary nailing solutions for the hip, femur, and tibia, along with external fixation and cannulated screw technologies – form our ecosystem. We began marketing these products in 2018 and intend to grow our presence in this field.
Our hip and knee arthroplasty solutions for the treatment of degenerative conditions or failed previous reconstruction have a long history of clinical use. We have marketed a variety of implants to date, including partial hip systems, primary hip systems, which include modular cemented and cementless hip stems, acetabular cups, femoral heads and highly cross-linked liners for hip arthroplasty, as well as partial knee systems, cruciate retaining, posterior stabilized, and revision options for knee arthroplasty.
Our spinal cord stimulation services for the treatment of chronic pain include the HFX™ SCS platform, featuring proprietary 10kHz Therapy™, for chronic back and limb pain, including conditions like failed back surgery syndrome, non-surgical refractory back pain, and painful diabetic neuropathy, providing non-pharmacological relief through advanced systems. We provide patient support and physician tools, delivering high-frequency stimulation without paresthesia and supporting diverse therapies to better patient outcomes.
Our neuromonitoring services utilize proprietary software that employs hunting algorithms and graphical user interfaces to provide surgeons with an enhanced and intuitive nerve avoidance system. Through our IONM platforms, we give surgeons the option to connect certain instruments to a computer system that provides discrete, real-time, surgeon-directed and surgeon-controlled feedback about the directionality and relative proximity of nerves during surgery. Our systems analyze and then translate complex neurophysiologic data into simple, useful information to assist the surgeon’s clinical decision-making process. We provide onsite and remote monitoring of the neurological systems of patients undergoing spinal and brain-related surgeries.
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Enabling Technologies
Our Enabling Technologies are comprised of imaging, navigation and robotics (“INR”) solutions for assisted surgery which are advanced computer-assisted intelligent systems designed to enhance a surgeon’s capabilities, and ultimately improve patient care and reduce radiation exposure for all involved, by streamlining surgical procedures to be safer, less invasive, and more accurate. The market for our Enabling Technologies in spine, cranial and orthopedic surgery is still in the infancy stage and consists primarily of INR systems. In spine, a majority of these technologies are limited to surgical planning and assistance in implant placement for increased accuracy and time savings with less intraoperative radiation exposure to the patient and surgical staff. As our Enabling Technologies become more fully integrated with our Musculoskeletal Solutions, a continued rise in adoption is expected. Furthermore, we believe as new technologies are introduced, Enabling Technologies have the potential to transform the way surgery is performed and most importantly, continue to improve patient outcomes.
Our INR solutions include the ExcelsiusGPS® platform, which is a robotic guidance and navigation system that supports minimally invasive and open procedures with screw and interbody spacer placement applications. The ExcelsiusGPS® platform has a modular design that we expect will serve as a foundation for future clinical applications using artificial intelligence (“AI”) and augmented reality. Also, in 2018, we acquired Nemaris Inc., the company that developed and marketed Surgimap®
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
Overview
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.
We are an engineering-driven company with a history of rapidly developing and commercializing advanced products and procedures to assist surgeons in effectively treating their patients and to address new treatment challenges. With numerous products launched since the founding of the Company, we offer a comprehensive portfolio of innovative and differentiated technologies that address a variety of musculoskeletal pathologies, anatomies and surgical approaches. We separate our products and services into two major categories: Musculoskeletal Solutions and Enabling Technologies.
Nevro Merger
As previously disclosed on February 6, 2025, the Company entered into an Agreement and Plan of Merger (the “Nevro Merger Agreement”) with Nevro Corp. (“Nevro”) and Palmer Merger Sub, Inc., a wholly owned subsidiary of the Company (“Palmer Merger Sub”). On April 3, 2025, pursuant to the terms of the Nevro Merger Agreement, Palmer Merger Sub merged with and into Nevro (the “Nevro Merger”), with Nevro surviving as a wholly owned subsidiary of the Company. Upon the consummation of the Nevro Merger, each issued and outstanding share of common stock of Nevro, $0.001 par value per share, was cancelled and converted into the right to receive cash in an amount equal to $5.85 per share of common stock of Nevro, without interest and subject to any applicable withholding taxes.
Product & Service Categories
While we group our revenue into two categories, Musculoskeletal Solutions and Enabling Technologies, they are not limited to a particular technology, platform or surgical approach. Instead, our goal is to offer a comprehensive product suite that can be used to safely and effectively treat patients based on their specific anatomy and condition, and is customized to the surgeon’s training and surgical preference.
Musculoskeletal Solutions
Our Musculoskeletal Solutions consist primarily of implantable devices, biologics, accessories, unique surgical instruments, spinal cord stimulation treatment therapy, and neuromonitoring services, used in an expansive range of spinal, orthopedic and neurosurgical procedures. Musculoskeletal disorders are a leading driver of healthcare costs worldwide. Disorders range in severity from mild pain and loss of feeling to extreme pain and paralysis. These disorders are primarily caused by degenerative and congenital conditions, deformity, tumors and traumatic injuries. Treatment alternatives for musculoskeletal disorders range from non-operative conservative therapies to surgical interventions depending on the pathology. Conservative therapies include bed rest, medication, casting, bracing, and physical therapy. When conservative therapies are not indicated, or fail to provide adequate quality of life improvements, surgical interventions may be used. Surgical treatments for musculoskeletal disorders can be instrumented, which include the use of implants, or non-instrumented, which forego the use of hardware but may include biologics. Our spinal cord stimulation treatment therapy uses neuromodulation technology delivered by an implantable device that delivers electrical impulses to treat chronic pain. Our neuromonitoring services use proprietary software-driven nerve detection and avoidance technology and include intraoperative neuromonitoring (“IONM”) services to aid spine surgery.
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Enabling Technologies
Our Enabling Technologies are comprised of imaging, navigation and robotics (“INR”) solutions for assisted surgery which are advanced computer-assisted intelligent systems designed to enhance a surgeon’s capabilities and ultimately improve patient care and reduce radiation exposure for all involved by streamlining surgical procedures to be safer, less invasive, and more accurate. The market for our Enabling Technologies in spine, cranial and orthopedic surgery is still in its infancy stage and consists primarily of INR systems. In spine, a majority of these technologies are limited to surgical planning and assistance in implant placement for increased accuracy and time savings with less intraoperative radiation exposure to the patient and surgical staff. As our Enabling Technologies become more fully integrated with our Musculoskeletal Solutions, a continued rise in adoption is expected. Furthermore, we believe as new technologies such as augmented reality and artificial intelligence are introduced, Enabling Technologies have the potential to transform the way surgery is performed and most importantly, continue to improve patient outcomes.
Geographic Information
To date, the primary market for our products and services has been within the U.S., where we sell our products and services through a combination of direct sales representatives employed by us and distributor sales representatives employed by exclusive independent distributors, who distribute our products for a commission that is generally based on a percentage of sales. We believe there is significant opportunity to strengthen our position in the U.S. market by increasing the size of our U.S. sales force, and we intend to add additional direct and distributor sales representatives in the future.
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.
Seasonality
Our business is generally not seasonal in nature. However, sales of our Musculoskeletal Solutions products and neuromonitoring services may be influenced by summer vacation and winter holiday periods during which we have experienced fewer surgeries taking place, as well as more surgeries taking place later in the year when patients have met the deductibles under insurance plans. Sales of our Enabling Technologies products may be influenced by longer capital purchase cycles and the timing of budget approvals for major capital purchases.
Critical Accounting Estimates
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.
Results of Operations
We manage our business globally within two operating segments, which is consistent with how our management reviews our business, makes investment and resource allocation decisions and assesses operating performance. We have concluded that these operating segments are aggregated into one reportable segment, based on the aggregation criteria.
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
Net Sales
The following table sets forth, for the periods indicated, our net sales by geography expressed as dollar amounts and the changes in net sales between the specified periods expressed in dollar amounts and as percentages:
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| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| U.S. | $ | 619,105 | $ | 600,784 | $ | 18,321 | 3.0 | % | ||||||||||||||
| International | 170,507 | 144,558 | 25,949 | 18.0 | % | |||||||||||||||||
| Total net sales | $ | 789,612 | $ | 745,342 | $ | 44,270 | 5.9 | % | ||||||||||||||
In the U.S., net sales increased by $18.3 million, or 3.0%, for the three months ended June 30, 2026. From a product standpoint, the increase was primarily driven by Musculoskeletal Solutions sales of $45.7 million, which were driven by increased spine implantable devices sales of $32.3 million and neuromonitoring sales of $10.4 million. This increase was partially offset by decreases in Nevro sales of $15.1 million and decreased domestic Enabling Technology sales of $12.3 million, driven by lower unit placement.
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.
Cost of Sales
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Cost of sales (exclusive of amortization of intangibles) | $ | 241,439 | $ | 248,765 | $ | (7,326) | (2.9 | %) | ||||||||||||||
| Percentage of net sales | 30.6 | % | 33.4 | % | ||||||||||||||||||
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.
Research and Development Expenses
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Research and development | $ | 36,321 | $ | 39,954 | $ | (3,633) | (9.1 | %) | ||||||||||||||
| Percentage of net sales | 4.6 | % | 5.4 | % | ||||||||||||||||||
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.
Selling, General and Administrative Expenses
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Selling, general and administrative | $ | 286,823 | $ | 303,622 | $ | (16,799) | (5.5 | %) | ||||||||||||||
| Percentage of net sales | 36.3 | % | 40.7 | % | ||||||||||||||||||
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.
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Amortization of Intangibles
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Amortization of intangibles | $ | 29,560 | $ | 30,189 | $ | (629) | (2.1 | %) | ||||||||||||||
| Percentage of net sales | 3.7 | % | 4.1 | % | ||||||||||||||||||
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.
Acquisition-Related Costs
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Acquisition-related costs | $ | 11,080 | $ | 33,156 | $ | (22,076) | (66.6 | %) | ||||||||||||||
| Percentage of net sales | 1.4 | % | 4.4 | % | ||||||||||||||||||
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.
Restructuring Costs
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Restructuring costs | $ | 1,957 | $ | 13,547 | $ | (11,590) | (85.6 | %) | ||||||||||||||
| Percentage of net sales | 0.2 | % | 1.8 | % | ||||||||||||||||||
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.
Bargain Purchase Gain
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Bargain purchase gain | $ | — | $ | 110,561 | $ | (110,561) | (100.0 | %) | ||||||||||||||
| Percentage of net sales | — | % | 14.8 | % | ||||||||||||||||||
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.
Other Income/(Expense), Net
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Other income/(expense), net | $ | 7,385 | $ | 1,503 | $ | 5,882 | 391.3 | % | ||||||||||||||
| Percentage of net sales | 0.9 | % | 0.2 | % | ||||||||||||||||||
Other income/(expense) increased by $5.9 million, or 391.3%, primarily due to a $5.7 million increase in interest income.
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Income Tax Provision/(Benefit)
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Income tax provision/(benefit) | $ | 38,248 | $ | (14,673) | $ | 52,921 | 360.7 | % | ||||||||||||||
| Effective income tax rate | 20.1 | % | (7.8 | %) | ||||||||||||||||||
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.
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Net Sales
The following table sets forth, for the periods indicated, our net sales by geography expressed as dollar amounts and the changes in net sales between the specified periods expressed in dollar amounts and as percentages:
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| U.S. | $ | 1,223,993 | $ | 1,084,641 | $ | 139,352 | 12.8 | % | ||||||||||||||
| International | 325,473 | 258,822 | 66,651 | 25.8 | % | |||||||||||||||||
| Total net sales | $ | 1,549,466 | $ | 1,343,463 | $ | 206,003 | 15.3 | % | ||||||||||||||
In the U.S., net sales increased by $139.4 million, or 12.8%, for the six months ended June 30, 2026. From a product standpoint, the increase was primarily driven by Nevro sales of $52.2 million and increased Musculoskeletal Solutions sales of $99.4 million, which were driven by increased spine implantable devices sales of $71.1 million and neuromonitoring sales of $20.5 million.
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.
Cost of Sales
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Cost of sales (exclusive of amortization of intangibles) | $ | 475,505 | $ | 444,162 | $ | 31,343 | 7.1 | % | ||||||||||||||
| Percentage of net sales | 30.7 | % | 33.1 | % | ||||||||||||||||||
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.
Research and Development Expenses
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Research and development | $ | 72,831 | $ | 73,016 | $ | (185) | (0.3 | %) | ||||||||||||||
| Percentage of net sales | 4.7 | % | 5.4 | % | ||||||||||||||||||
Research and development expenses remained materially consistent period over period, decreasing $0.2 million, or 0.3%, in the current-year period.
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Selling, General and Administrative Expenses
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Selling, general and administrative | $ | 584,598 | $ | 546,421 | $ | 38,177 | 7.0 | % | ||||||||||||||
| Percentage of net sales | 37.7 | % | 40.7 | % | ||||||||||||||||||
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.
Amortization of Intangibles
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Amortization of intangibles | $ | 59,086 | $ | 58,991 | $ | 95 | 0.2 | % | ||||||||||||||
| Percentage of net sales | 3.8 | % | 4.4 | % | ||||||||||||||||||
Amortization of intangibles increased by $0.1 million, or 0.2%, primarily driven by the acquisition of intangibles in connection with the Nevro Merger, which contributed $3.4 million in expense in the current period as compared to $1.5 million in the same period of the prior year. This increase was partially offset by the finalization of amortization of other intangible assets as compared to the six months ended June 30, 2025.
Acquisition-Related Costs
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Acquisition-related costs | $ | 17,457 | $ | 34,213 | $ | (16,756) | (49.0 | %) | ||||||||||||||
| Percentage of net sales | 1.1 | % | 2.5 | % | ||||||||||||||||||
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.
Restructuring Costs
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Restructuring costs | $ | 7,169 | $ | 13,547 | $ | (6,378) | (47.1 | %) | ||||||||||||||
| Percentage of net sales | 0.5 | % | 1.0 | % | ||||||||||||||||||
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.
Bargain Purchase Gain
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Bargain purchase gain | $ | 1,118 | $ | 110,561 | $ | (109,443) | (99.0 | %) | ||||||||||||||
| Percentage of net sales | 0.1 | % | 8.2 | % | ||||||||||||||||||
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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.
Other Income/(Expense), Net
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Other income/(expense), net | $ | 12,953 | $ | 8,167 | $ | 4,786 | 58.6 | % | ||||||||||||||
| Percentage of net sales | 0.8 | % | 0.6 | % | ||||||||||||||||||
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.
Income Tax Provision/(Benefit)
| Six Months Ended June 30, | Change | |||||||||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | $ | % | ||||||||||||||||||
| Income tax provision/(benefit) | $ | 71,020 | $ | 13,533 | $ | 57,487 | 424.8 | % | ||||||||||||||
| Effective income tax rate | 20.5 | % | 4.6 | % | ||||||||||||||||||
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.
Liquidity and Capital Resources
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.
Line of Credit
In September 2023, we entered into an unsecured credit agreement with U.S. Bank National Association, as administrative agent, Citizens Bank, N.A., as syndication agent, Royal Bank of Canada, as documentation agent, U.S. Bank National Association and Citizens Bank, N.A., as joint lead arrangers and joint book runners, and the other lenders referred to therein (the “September 2023 Credit Agreement”), that provides a revolving credit facility permitting borrowings up to $400.0 million and has a termination date of September 27, 2028. We may request an increase in the revolving commitments in an aggregate amount not to exceed (i) $200 million or (ii) an unlimited amount, so long as the Leverage Ratio (as defined in the September 2023 Credit Agreement) is at least 0.25 to 1.00 less than the applicable Leverage Ratio then required under the September 2023 Credit Agreement. Revolving loans under the September 2023 Credit Agreement bear interest at either a base rate or the Term SOFR Rate (as defined in the September 2023 Credit Agreement) plus, in each case, an applicable margin, as determined in accordance with the provisions of the September 2023 Credit Agreement. The Applicable Margin ranges from 0.125% to 0.625% for the Base Rate and 1.125% to 1.625% for the Term SOFR Rate (each as defined in the September 2023 Credit Agreement). We may also request Swingline Loans at either the Base Rate or the Daily Term SOFR Rate (each as defined in the September 2023 Credit Agreement). The September 2023 Credit Agreement is guaranteed by certain direct or indirect wholly owned subsidiaries of the Company. The September 2023 Credit Agreement contains financial and other customary covenants, including a funded net indebtedness to adjusted EBITDA ratio. As of June 30, 2026, we had no outstanding borrowings under the September 2023 Credit Agreement and we were in compliance with all covenants.
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Cash Flows
The following table summarizes, for the periods indicated, cash flows from operating, investing and financing activities:
| Six Months Ended June 30, | 2026-2025 Change | |||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-08-18 | ZARRILLI STEPHEN T | Director | Sell | -25,000 | $87.04 | -$2,175,965 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-11-07 10-Q expected by 2026-11-10 (in 55 days)
- ~2027-02-24 10-K expected by 2027-03-04 (in 164 days)
- ~2027-05-08 10-Q expected by 2027-05-11 (in 237 days)
- ~2027-08-07 10-Q expected by 2027-08-10 (in 328 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-08-06 8-K Earnings Release; Financial Statements and Exhibits
- 2026-08-06 10-Q Quarterly Report
- 2026-06-04 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-05-07 10-Q Quarterly Report
- 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-24 DEF 14A Proxy Statement
- 2026-03-23 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-24 10-K Annual Report
- 2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-07 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-06 10-Q Quarterly Report
- 2025-11-06 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-07 10-Q Quarterly Report
- 2025-08-07 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-21 8-K Earnings Release; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits