Globus Medical Raises Profit Outlook as Sales Growth Slows
The medical-device maker lifted its 2026 adjusted earnings forecast to $4.95-$5.05 a share.
Globus Medical (GMED), a musculoskeletal technology company, reported stronger underlying second-quarter earnings as wider margins offset a sharp slowdown in sales growth. Non-GAAP diluted earnings rose 55.8% to $1.34 a share from 86 cents a year earlier.
Net sales increased 5.9% to $789.6 million, decelerating from 27.0% growth in the first quarter as the Nevro acquisition moved into the prior-year comparison. Excluding Nevro, growth slowed to about 9% from 13.2% in the first quarter. Sales rose 3.9% sequentially, while remaining 4.5% below the fourth-quarter level.
The slowdown was concentrated in the U.S., where sales grew 3.0% after rising 25.0% in the first quarter. International sales increased 18.0%, or 16.2% in constant currency, extending their faster pace relative to the domestic business.
Musculoskeletal Solutions sales rose 7.5% to $763.5 million, supported by 7% growth in U.S. Spine and 14% reported growth in International Spine. U.S. Spine recorded a fifth consecutive quarter of above-market growth, though its pace fell below 10% for the first time in more than a year. Enabling Technologies sales declined 25.9% to $26.1 million after the business grew 19% in the fourth quarter.
Profitability strengthened as adjusted gross margin expanded two percentage points to 69.4%. Adjusted earnings before interest, taxes, depreciation and amortization rose 34.1% to $279.8 million, lifting the margin to 35.4% from 28.0%.
GAAP net income declined 25.3% to $151.6 million, and diluted earnings fell to $1.10 a share from $1.49 because the prior-year period included a $110.5 million bargain-purchase gain tied to Nevro. Operating income more than doubled to $182.4 million as acquisition-related and restructuring costs declined.
Globus raised its full-year non-GAAP earnings guidance by 25 cents at both ends, following a 30-cent increase in the first quarter, and reiterated revenue guidance of $3.18 billion to $3.22 billion.
Free cash flow climbed to $176.6 million from $31.3 million as operating cash flow increased and capital spending declined. The company repurchased $136.1 million of stock during the first half, compared with $215.5 million a year earlier, leaving cash generation and margin expansion to support its higher profit outlook amid slower revenue growth.