Globus Medical NYSE: GMED lowered its 2026 revenue forecast after third-quarter sales fell, citing continued declines at its Nevro business, delayed spine product launches and lower contributions from competitive sales recruiting.
The medical technology company now expects full-year revenue of $3.09 billion, down from its prior forecast of $3.18 billion to $3.22 billion. It maintained its outlook for adjusted diluted earnings per share of $4.95 to $5.05.
Third-quarter revenue was $763.7 million, down 0.7% from a year earlier, or 0.5% in constant currency. Revenue excluding Nevro rose 3% to $690 million, while Nevro sales fell 25.7% to $73.7 million.
President and CEO Keith Pfeil said the company could have executed better during the quarter, pointing to the timing of product introductions and competitive recruiting rather than attributing the slowdown to broader market conditions. He said Globus had worked through manufacturing issues, although some smaller matters remain.
Spine launches shift into 2027
U.S. Spine revenue grew 1.8% from the prior-year quarter. CFO Kyle Kline said delayed product launches that had been expected to contribute in the second half of 2026 are now expected to be more meaningful growth drivers in 2027 and beyond.
Globus said its SCRIPT line of patient-specific implants and rods is available, while its XLIF Prone Solution and two-blade retractor are expected later in the fourth quarter. The company is also in the final stages of introducing eIQ, a product suite combining implants and instruments with software and other technologies.
Pfeil said Globus needs to increase the number of sales representatives it recruits from competitors and improve the amount of business those representatives bring over. Asked whether there was a backlog for the delayed products, he described “anticipation” rather than a backlog.
For the fourth quarter, the revised annual forecast implies a mid-single-digit revenue decline, Kline said. He cited the delayed spine launches, Nevro’s slower recovery and a difficult comparison for enabling technologies, where a shift toward rentals and leases will reduce upfront revenue.
Nevro recovery remains delayed
Nevro revenue fell 9% sequentially from the second quarter as Globus hired, trained and deployed field sales employees. Kline said the recovery in lost sales volume has taken longer than previously expected, and trial volumes have not yet risen to the company’s desired level.
Globus has substantially completed rehiring sales headcount lost earlier in the year, Pfeil said. He added that the company plans to launch HFX Elite, a new implantable pulse generator, in the first half of 2027. The device is intended to introduce bolus therapy and expanded MRI labeling.
Despite the revenue decline, Nevro’s adjusted EBITDA margin reached 19.9% in the third quarter, up 370 basis points from a year earlier, according to the company.
Margins, cash flow and buybacks
Globus reported GAAP net income of $141.2 million, or $1.04 per diluted share. Adjusted net income was $167 million, or $1.23 per diluted share, up 4.4% from a year earlier.
Adjusted gross margin rose to 69.5% from 68.1%, marking its eighth consecutive quarter of sequential improvement. Kline attributed the year-over-year increase primarily to manufacturing and supply-chain synergies and a favorable sales mix, partly offset by higher freight costs.
Operating cash flow rose 6% to $265 million, and free cash flow increased 5% to a record $225 million. Globus repurchased approximately 1.9 million shares for $142.9 million during the quarter. Its board authorized an additional $500 million for the repurchase program, which had $110 million of authorization remaining at Sept. 30.
Enabling Technologies revenue increased 24.3% to $34.9 million. Total capital units deployed through sales, rentals and leases rose 45% from a year earlier. The company also said the U.S. Food and Drug Administration closed a July 2024 warning letter related to its EGPS system after corrective actions. Pfeil said the letter concerned administrative tracking of complaint handling, not patient safety.
Longer-term outlook
Pfeil said Globus aims for mid- to high-single-digit revenue growth and earnings growth that outpaces revenue, but emphasized that the company was not issuing 2027 guidance. He said higher research and development spending would partly offset expected gross-margin gains.
The company also completed two small acquisitions during the quarter: Higgs Boson, whose technology Globus plans to incorporate into its surgical intelligence efforts, and Synaptive assets, which support an expansion into cranial neurosurgery. Pfeil said neither acquisition was contributing revenue yet and he did not expect them to be meaningful revenue contributors in 2027.
About Globus Medical (NYSE:GMED)
Globus Medical, Inc develops and commercializes musculoskeletal solutions for surgeons, hospitals and patients. The company focuses primarily on spinal, orthopedic trauma and other orthopedic procedures, offering implants, instruments and related technologies designed to support surgical treatment and improve clinical outcomes.
Its product portfolio includes spinal implants and enabling technologies, including the ExcelsiusGPS robotic navigation platform and Excelsius3D imaging system.
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