Welcome to Globus Medical's Third Quarter 2024 Earnings Call. At this time, all lines will be on mute, and a Q&A session will be held after the prepared remarks. I will now turn the call over to Brian Kearns, Senior Vice President of Development and Investor Relations. Mr. Kearns, please go ahead.

Thank you, Victor, and thank you everyone for being with us today. Joining today's call from Globus Medical will be Dan Scavilla, President and CEO; and Keith Pfeil, Chief Operating Officer and Chief Financial Officer. This review is being made available via webcast accessible through the Investor Relations section of the Globus Medical website. Before we begin, let me remind you that some statements made during this review may be considered forward-looking statements. Our form 10-K for the 2023 fiscal year and our subsequent filings with the Securities and Exchange Commission identify factors that could cause actual results to differ materially from those projected. Our SEC filings, including the 10-K, are available on our website. We do not undertake to update any forward-looking statements as a result of new information or future events. Our discussion today will also include certain financial measures that are not calculated in accordance with GAAP. We believe these non-GAAP financial measures provide additional information pertinent to our business performance. These non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are available in the schedules accompanying the press release and on the Investor Relations section of the Globus Medical website. With that, I will now turn the call over to Dan Scavilla, our President and CEO.

Thanks, Brian, and good afternoon, everyone. September 1st marked the one year anniversary of the Globus NuVasive merger, making this quarter the fourth consecutive combined earnings release with sales growth, strong financial performance, and best-in-class innovative product launches. Globus delivered an exceptional third quarter with sales of $626 million, growing 63% or $242 million. Non-GAAP EPS was a record $0.83, increasing 45% even with the 20% increase in diluted shares compared to the prior year. We also had a record free cash flow of $162 million in Q3, equivalent to our 2023 full-year free cash flow. These results reflect our continued drive in market penetration, synergy acceleration, and sustained profitable growth through financial discipline. Based on our results so far, I'd like to compliment the entire Globus team for their speed and effort in completing the most successful spine merger in history. There's still a great deal of work ahead, but I look forward to building from this base and accelerating growth as we move into the future. In addition to our great financial performance, Globus launched four new products in Q3 across our businesses, reaching 13 product launches year-to-date and more to come this year. These results are a testament to our incredible team working tirelessly to drive integration, overcome challenges, and create scalable solutions to reach steady state quickly and shape the markets in which we compete while delivering innovation to our surgeons. Focusing on the performance of our business, U.S. spine grew 55% in Q3 with significant gains across our product portfolio including expandables, MIS screws, biologics, lateral, and cervical offerings. Growth is driven by several factors including a high retention rate at all levels of our field sales team, successful distributor-to-direct conversions, the strength of our combined product offering, increasing product cross-selling, implant pull-through from robotic procedures, and contributions from prior period competitive rep recruiting. Competitive rep recruiting remained strong in Q3 and the pipeline is solid as we enter Q4. 2024 is positioned to be one of the strongest competitive recruiting years as we continue to attract the most successful and tenured competitive professional reps who see the potential for innovation and growth here as a destination of choice. As mentioned earlier, we continue to flex our innovation muscle, launching four new products from our prolific R&D pipeline in Q3. I want to share these meaningful launches with you. The Excelsius navigation Hub pairs navigational accuracy with innovative patient safety features such as patient array shift tracking and navigation of door oscillating instruments. The Hub seamlessly integrates with Globus products and procedures, offering enhanced navigation of best-in-class instruments and implants for a complete procedural solution from the cervical spine to the sacrum. It is the only freehand navigation system on the market to offer the versatility of three distinct imaging workflows. The first is with Excelsius 3D imaging with automatic registration for optimized flexibility and efficiency. The second is preoperative CT fluoroscopy merging and the third is interoperative 2D fluoroscopy. Excelsius helped navigated instruments are an expansive and comprehensive suite of navigated instruments that enable navigation of a wide variety of open and minimally invasive spine procedures. These are designed for optimal camera tracking throughout the procedure and are compatible with innovative angled navigation arrays that reduce the need for interoperative camera adjustments, streamlining all workflows while maintaining backward compatibility with existing Excelsius GPS navigated instruments. The Actify 3D Total Knee system is a contemporary total knee solution that pairs cementless reconstruction with operative efficiency and anatomic fit. Compatible with manual robotic-assisted workflows, Actify 3D is engineered to combine implant endurance and a porous lattice interface for cementless fixation, addressing surgeon preferences and varying patient anatomies. Actify 3D complements the ExcelsiusFlex robot with the TKA total knee arthroplasty application that received FDA clearance in late Q2. E-Flex enables consistent accurate cuts while maintaining surgeon flexibility and tactile feel. It accommodates varying surgeon preferences by offering imageless and CT-based workflows, ergonomic and unrestricted jigless resections, and restores surgeon control while active tracking is engaged. The system features advanced registration and planning algorithms to enable streamlined and efficient procedures. The system is slated for launch in Q4. For trauma, the CAPTIVATE SOLA headless compression screw system provides a fast and efficient solution for fracture repair, bone reconstruction, joint fusion, osteotomy, and arthrodesis. This headless screw accommodates a wide range of patient anatomies, while the intuitive graphic case design aids efficiency and reduces space in the OR. In addition to driving growth from the 13 products we've launched so far this year, I look forward to sharing future impactful launches as we go through the rest of 2024. This is a year of record launches for us and this innovation is key to building long-term growth while working through near-term merger integration. We are investing significantly in comprehensive product development training to harmonize our product development processes, and this is expected to further expand our significant lead over the competition in IP generation and new product development. Enabling technology sales were $38 million, an increase of 39% versus the prior year. Q3 was the highest number of unit placements since launch, growing 50% over prior Q3, including the acceleration of our rental program where, unlike unit sales, we recognized revenue over the rental contract life. Robotic procedures continue to accelerate, growing 34% versus the prior year and exceeding 84,000 robotic procedures performed since launch. As mentioned, the ExcelsiusHub launch in Q3 is going well as we enter the freehand navigation market, opening the largest market segment of navigation for Globus innovation and growth. The combination of the E3D imaging system with the EHUB navigation platform gives Globus the most comprehensive and sophisticated navigation offering available. We also plan to advance navigation in the near future with our XR augmented reality headset designed to work with the ExcelsiusHub. We expect to gain FDA clearance of the headset in Q4. The DuraPro and Versera power tool systems launched in Q1 continue to differentiate our power tool offerings and pair seamlessly with our enabling tech portfolio. The unique ability of the DuraPro oscillating drill to add extra safety around soft tissue structures, including neurovascular anatomy, while allowing for easy removal of bone helps surgeons work safely and efficiently. Market interest remains high for our state-of-the-art Excelsius 3D imaging system, with most surgeons immediately recognizing and appreciating the stark differentiation over existing systems and seeing the value of combining E3D with the ExcelsiusGPS or Hub. We're delivering on our promise to create and launch our enabling tech ecosystem. Investment remains strong as we enhance our ecosystem offering and provide more functionality in our imaging, navigation, and robotic current and future portfolios. Our international spinal implant business delivered record sales in Q3, growing 86% on a constant currency basis compared to the prior year, with high-double-digit growth in most markets, especially driven by Japan, Germany, the UK, Italy, Brazil, and Colombia. We have yet to fully harness the power of the combined Globus NuVasive product offerings internationally and feel this will be a significant tailwind moving forward in 2025 and beyond. The combined trauma and NSO business delivered 99% growth for Q3, driven by the continued powerful performance and market penetration of our base trauma business combined with the fast uptake of the NuVasive specialty orthopedic growth now. The combination of these two businesses is one of the strengths of our merger, offering a broad range of products and market-changing innovation. Integration is progressing well as we continue to cross-train our field, implement common global systems, expand our investment in sets, and bring new products to market. There has been great progress from our teams, and we are fortunate to have strong leaders throughout the world. You can see from this quarter's financials, synergies have been identified, and actions have begun to realize benefits, focusing on out-of-pocket spending and prioritizing investments to match future growth plans. In-house organizational structures have been implemented, and we're working towards reaching steady state by year end. I believe the potential for Globus has never been greater. It's up to us to harness our resources and shape the future of our markets. We have everything we need to realize this. I want to thank the worldwide Globus team for your dedication and support, delivering an incredible quarter and furthering the pathway to becoming the preeminent musculoskeletal technology company in the world. I will now turn the call over to Keith.

Thanks, Dan, and good afternoon, everyone. During our third quarter, we passed the one-year mark since the closing of the NuVasive merger. Much work has been done thus far in becoming the most successful spine integration at the one-year mark, but much work remains. We are hard at work to continue in this vein. I'm extremely pleased with the outstanding results of our third quarter. As I look at sales performance, profitability, the balance sheet, cash flow, and cash generation, I see Q3 as a fundamentally complete quarter. All facets of the business performed, and the outcomes are clearly visible in our third quarter results. Revenue for the third quarter was $625.7 million, growing 63.1% as reported. Day adjusted sales growth was 60.8% with one more selling day in the U.S. versus Q3 of 2023. Our Q3 GAAP net income was $51.8 million, resulting in $0.38 of fully diluted earnings per share. This compares to GAAP net income of $1 million and $0.01 of fully diluted earnings per share in the prior year quarter. Q3 2024 non-GAAP net income was $114 million, growing 73.9% versus the prior year quarter, resulting in $0.83 of fully diluted earnings per share. Third-quarter non-GAAP earnings per share grew 45% despite a 20% increase in diluted shares as a result of the merger. Our third quarter adjusted EBITDA was 31%, and free cash flow was a record $161.7 million. Musculoskeletal revenue in the third quarter was $587.4 million, growing 65% compared to the prior year quarter, driven mainly by the contributions from the NuVasive merger. On a pro forma basis, assuming NuVasive was included in our prior period results, musculoskeletal revenue grew 5.4% compared to Q3 of 2023. Growth was again led this quarter by U.S. spine and our international spine business. Our Q3 Enabling Technologies revenue was $38.3 million, growing 38.5% versus the prior year quarter. Growth was driven by increased sales within the U.S. market across our EGPS and E3D products. In addition, we also sold and shipped our first EHUB units during the quarter. Overall, the third quarter represented a record for total Excelsius units placed in the quarter. Looking ahead to our fourth quarter, the capital market remains healthy and we are well positioned with a strong pipeline and seek to close the year strong. U.S. revenue in the third quarter was $495.8 million, growing 60.3% as reported compared to the prior year quarter. Looking at the quarter on a pro forma basis, U.S. revenue grew 7.3%, driven predominantly by U.S. spine and Enabling Technologies. Looking back on the past year since the merger closed, I call attention to the fact that our U.S. business has grown on a pro forma basis in each of the four quarters, led predominantly by our U.S. spine and Enabling Technologies businesses. International revenue during the third quarter was $129.9 million, growing 74.8% as reported compared to the prior year quarter. On a pro forma basis, international revenue grew 5.1%, driven by strong implant growth, primarily in our EMEA countries, partially offset by lower capital sales. Q3 GAAP gross profit was 53% compared to 62.2% in the prior year quarter, which is inclusive of product-related intangible amortization for both periods. The decline in GAAP gross profit is primarily the result of step-up amortization from the NuVasive merger, which will end during our fiscal fourth quarter. Excluding the impacts of step-up amortization, non-GAAP gross profit was 66.5% compared to 69.7% in the prior year. The decline in gross profit rate was driven primarily by the inclusion of NuVasive in our consolidated results as well as a higher mix of capital sales in the quarter. We expect the full-year adjusted gross profit rate to be in the range of 67% to 68% for full-year 2024. Looking ahead, we expect to work back towards the goal of a mid-70s adjusted gross profit margin as we complete the integration and realize synergies across manufacturing, operations, and vendor management. Research and development expenses in the third quarter were $35.4 million or 5.7% of sales compared to $29.3 million or 7.6% of sales in the prior year. The increase in spending is the inclusion of NuVasive in our consolidated results, partially offset by synergy actions taken. Consistent with our previous expectations, we still expect R&D expenses to be in the range of 6.5% to 7% for the full-year 2024. SG&A expenses for the third quarter were $240.7 million or 38.5% of sales compared to $156.2 million or 40.7% of sales in the third quarter of the prior year. The increase in total SG&A dollars is directly the result of the NuVasive merger, partially offset by cost actions taken and fixed cost leverage on spending. Consistent with prior quarters, we expect full-year SG&A expenses to improve by 1 to 2 percentage points over the full-year 2023 SG&A expense as a percentage of sales. Net interest expense in the third quarter of 2024 was $0.8 million compared to net interest income of $7.8 million in the prior year quarter. The resulting $8.6 million pre-tax unfavorable impact is driven by the use of cash to fund a NuVasive line of credit paydown at merger close, fund share repurchases related to our buyback plan, and interest expense from the senior convertible note assumed from NuVasive at merger close. The GAAP tax rate for the third quarter was 9.1% compared to 60.7% in the prior year quarter. The prior year rate was impacted by the low level of GAAP pre-tax income in the prior year quarter as well as a non-recurring benefit in the current year that favorably impacted the rate. Our non-GAAP tax rate for the quarter was 29.1% and does not include this non-recurring benefit. We expect our full-year non-GAAP tax rate to be in the range of 24% to 25% for the full-year 2024. Shifting to cash flow. Our third quarter results were stellar with both record operating cash and free cash flow. Operating cash flow was $203.7 million and free cash flow was $161.7 million. As Dan mentioned earlier, our Q3 2024 free cash flow was essentially our entire cash flow for fiscal 2023. The drivers of improved cash flow are twofold: one, we see the cash benefit of synergy capture roll through our P&L as our cash earnings continue to improve; and two, we are unwinding the impacts of the system go live on accounts receivable. Our U.S. systems go live in Q1 temporarily impacted accounts receivable, resulting in a higher working capital investment. As expected, we see improvements in working capital throughout the fourth quarter and into early 2025. Our record free cash flow was achieved in a quarter where capital expenditures were approximately 6.7% of sales, showing evidence of our investment in the business. Our expectation is that full-year 2024 CapEx will be in the range of 4.5% to 5.5% of sales. I began my remarks today by commenting that I viewed our third quarter results as a fundamentally complete quarter. A key driver of that statement was based on our cash flow for the quarter. To further highlight, now that we have a full four quarters behind us since the merger, we are starting to see the financial vision for the merged Globus company become more of a reality. In these trailing four quarters, operating cash flow was $415 million and free cash flow was $293.8 million. Our capital allocation priorities remain unchanged. Our long-term vision is to maintain strong financial discipline with little to no debt, invest in organic and inorganic opportunities while providing a return to shareholders through share repurchases. Share repurchases have and will remain an integral part of our approach moving forward. Since the merger closed, we've spent a total of $310.3 million on share repurchases. Shifting over to debt, it is our intent to use existing cash reserves to repay the $450 million senior convertible notes, which are due to mature in March of 2025. Now I'd like to spend a few minutes discussing our integration progress and synergy capture. Looking back on the decisions made and actions taken thus far in 2024, we are heavily focused on our U.S. operations, namely territory realignments, elimination of cost redundancies, facility consolidations, system integrations, and contract renegotiations. Year two efforts will focus on further refinement of our international systems and its footprint, the implementation of additional warehouse efficiencies, and most importantly, product insourcing efforts. We've begun ordering the machinery and equipment that will drive our insourcing initiatives that will encompass both of our manufacturing facilities in Pennsylvania and Ohio. As we execute this, we will seek to expand our manufacturing know-how with new and expanded capabilities while fostering teamwork and collaboration as we bring together the knowledge and approaches of both legacy organizations. As it relates to synergy capture, we previously communicated our expectation of $170 million of synergies over three years with the ability to realize 40% or $68 million in year one, 40% or an incremental $68 million in year two, and 20% or an incremental $34 million in year three. While we expect and remain committed to achieving the $170 million in savings over three years, we are updating the time phasing of these savings. We now expect to realize 55% or approximately $94 million in year one, 30% or $51 million in year two, and 15% or $25 million by the end of the third year. This timing improvement in savings ties back to our Globus culture of moving with a sense of urgency as our employees are relentlessly focused on improving patients' lives. We'll provide additional updates to our projections when necessary. Based upon our Q3 performance and outlook for the remainder of the year, we are again increasing our previously provided guidance. We now expect 2024 net sales to be in the range of $2.49 billion to $2.5 billion. Our revised net sales guidance implies 3.9% to 4.3% growth over 2023 pro forma revenues of $2.396 billion. We are delivering sales growth in a year of extensive integration. Before I provide a revised fully diluted non-GAAP EPS guidance, I'd like to call attention to a change we made during the quarter related to our non-GAAP reporting where we will no longer adjust for the impact of the acquisition of in-process research and development. This change in reporting will unfavorably impact our previously provided 2024 non-GAAP EPS guidance by $0.09 as a result of our Q1 2024 IP R&D acquisition. Given this change as well as our expectations on business performance, our revised fully diluted non-GAAP EPS is now expected to be in the range of $2.90 to $3 per fully diluted share. Our revised guidance range assumes a $0.19 increase to operational performance, partially offset by the $0.09 impact due to no longer adjusting for the acquisition of IP R&D as stated. Overall, this reflects our views of enhanced profitability driven by improving business performance, while more closely aligning our non-GAAP reporting with the most comparable GAAP measure. Our Q3 performance reflected the underlying strength of our business. We achieved meaningful sales growth, drove enhanced profitability, and generated record free cash flow while still investing in our business. I'm extremely pleased with our results and remain excited for what's to come. Closing out on my comments, I'd like to once again thank our employees for their commitment and dedication. In a state of change, we've continued to deliver innovation and new products to our partners based on our culture of maintaining operational excellence and a focused, disciplined approach to cost, ensuring we have the right product at the right price and on time. We will now open the call for questions.

Thank you. And at this time, we'll conduct a question-and-answer session. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from the line of Matt Miksic from Barclays. Your line is open.

Hey, good evening and congrats on a really strong quarter, guys.

Thanks. Thank you.

So one quick question on margins and then a follow-up on robots, if I could. So margins, obviously, EBITDA margins popped up nicely. You mentioned some of the things that were driving that acceleration into the low-30s. Could you maybe highlight the large moving pieces that got you there faster than we were expecting?

Sure. So Matt, I'll take the first part of that question. When you look back on the year, we aggressively went after eliminating cost redundancies as well as facility consolidation. As we got into the year, we identified more places where we felt there was opportunity for savings. The key focus for us is driving cash savings. I'm not interested in non-cash savings. We really took a look at four-wall spending and asked what we needed to do to drive improved profitability. It's really about that.

Okay. Well, I'm sure there'll be follow-ups on that. But on robots, one of the things I think we've asked about since the beginning and since the merger was announced is, behind this mission of doubling the field force and selling a robot across a broader field force, what's the progress on the NuVasive side and reps getting into accounts?

Hey, Matt, I'll take that one. It's been progressing well. There are several fold. First, we have been training our reps on the system itself. We've been bringing our team in, making them experts, and getting them comfortable with it. I’ve seen dozens of teams from the former NuVasive team in our labs running through it. At the same time, our product development team has been working to take great Nuvasive products like ReLine or Modulus and get those onto the software that's been done. We’re working to get approvals to use those NuVasive products on our system. It's the combination of those two that will really allow us to be functional. Additionally, we've been seeding conversations with surgeons, bringing them in for VIPs, and having conversations with them. I'm pleased with how it is going. The real thing we need is to get the approvals.

Thank you. One moment for our next question. And our next question comes from the line of Vic Chopra from Wells Fargo. Your line is open.

Hi, congrats on the quarter. This is Dino on for Vic. I just wanted to ask about if you have an update on the FDA warning letter that recently came out. What update can you provide on it, and do you expect it to be resolved soon? What is the commercial impact?

Thanks. Dino, I'll take that as well. Just to remind everybody, that warning letter was really about our internal processes of how we handle complaints. It was not directed towards the actual robot, nor did it imply any issues with the robot or patient safety. It was about how we handle complaints and the criteria we selected when analyzing them. The FDA would like us to do more, and we agreed to put that going forward. We've submitted that out to the FDA. We've had some back and forth for clarification, and now we're in the phase of proving it out as an effective approach. We're willing and excited to have them come back in for reinspection. Warning letters from other companies tend to last over a year, so we're trying to close that down faster. As far as sales, there have probably been a few customers worried about this. We've had direct conversations with them to assure them it's not a product-related issue, and while there might be some impact, I wouldn't quantify it as significant to date.

Got it. That's helpful. And then one follow-up. On the capital equipment environment, what is your view on the capital equipment environment heading into Q4? How are you feeling about 2025 after two of your competitors recently received FDA approval for their spine robots?

This is Keith. Heading into Q4, we feel good about the capital environment. Our pipeline remains strong with lots of inbound interest and many quotes being turned around. As I think about 2025, competition is coming, and we expected it, but we're focusing on selling our robot, which we still feel is the best-in-class technology.

Remember, one of the premises of the merger was to double our total available market and introduce this to more surgeons through the NuVasive side. That is and will remain our focus. We will willingly compete with any competition in any account, but our main focus will be taking advantage of the surgeons we're active with to place those units through next year.

Thank you. One moment for our next question. And our next question comes from the line of Matt Taylor from Jefferies. Your line is open.

Great. This is Young Li in for Matt. Thanks for taking our questions. I guess to start, one on reps. It's been a little over a year since the deal closed. Can you level set us on how many reps might have guarantees expiring? Is it a material number for revenue for NuVasive? It sounds like you've seen a pretty good reduction on the reps. Are you seeing any competitive responses from other companies regarding your reps?

Thanks, Young Li. I'll take that. There was word in the street that the majority of our people are on contracts, which is untrue. We have historically had few people on contracts, and that remains low. It is not a significant impact. As in regular business, we aggressively pursue competitive recruits, and our competition does the same. We're not seeing anything unusual related to this merger. But I want to stress, the word in the street is simply incorrect. We do not have the majority of folks on guarantees at all.

Great. Thanks for the clarification. I wanted to hear about your thoughts on the international spine business profitability. There are significant opportunities and tailwinds on the revenue side, but can the international operations' EBITDA back up versus the U.S.?

Absolutely. International profitability will vary country by country, but we operate in places where pricing may be favorable and drive volume growth of the same products made in the U.S. Incrementally adding more product internationally can drop more variable profit to the bottom line. So yes, there's an ability to create enhanced profitability internationally as we move forward, which can have a compounding effect on the larger business.

One moment for our next question. Our next question comes from the line of Shagan Singh from RBC Capital Markets. Your line is open.

Great, thank you for taking the questions and congratulations on a strong quarter. I guess just two for me. The first on the ReconRobotic launch, can you elaborate on what will be most differentiated, what's your commercial strategy, and how we should think about the impact in 2025? For my second question on capital allocation, you had previously mentioned a focus on complementary M&A. It seems you still have more work to do on NuVasive, but the big chunk is behind you. Can you elaborate on your appetite and preference for deal size?

What we are excited about with the robot is that it’s newly designed and built from scratch. The movement of its arm is a great benefit. The accuracy it allows with the latest technology is impressive. It features multiple workflows, whether you want CT or imageless. The big thing I appreciate is the flexibility and efficiency it puts into the surgeon's hands. We'll be establishing more around the Q4 launch.

As it relates to capital allocation and driving M&A, we want to fill out our product portfolio. We want to enhance our joint portfolio or look at complementary pieces of technology that could aid in development. I wouldn't comment on a specific size or scale, as we're focused on integrating the NuVasive acquisition first. Time will tell what opportunities might arise, and we will assess them accordingly.

One moment for our next question. Our next question comes from the line of Matthew O'Brien from Piper Sandler. Your line is open.

Hey, this is Phil on for Matt. Thanks for taking our questions and congrats on the great quarter. I wanted to ask about the guidance update. You beat it in Q3 and raised by $15 million. I think that implies Q4 revenues growing in the 2% to 3% range. Is that the right way to think about things? Any color on how that’s broken out between musculoskeletal and enabling technologies?

This is Keith. We provide guidance for the full-year. Obviously, we had a strong quarter, but we maintain appropriate conservatism heading into Q4. However, we remain extremely positive about our progress. We don’t provide breakouts between enabling tech and musculoskeletal but our musculoskeletal business has grown led by U.S. spine and our enabling tech pipeline remains strong.

That’s helpful. You described the new and improved Globus as a high singles, low doubles grower into the future. Just curious to get your take.

At this point, we’re not looking into 2025 or providing color on it yet. We're focusing on finishing this year strong and integrating the businesses. We still think Globus could be a mid-to-high digit grower.

One indication of this is our strong competitive recruiting activity and the strong product launches we're putting out.

One moment for our next question. Our next question comes from the line of David Saxon from Needham and Company. Your line is open.

Great. Good afternoon, Dan and Keith. Congrats on the quarter. I wanted to follow up on guidance. It represents low-single-digits sequential growth compared to historical high-single-digits. Are you seeing any market risks? I thought guidance assumed around $150 million of dis-synergies this year. Is that still the case?

As it relates to guidance, as we finish the year, we remain positive on our standing. The $150 million dis-synergy – I did not reference it in my prepared remarks. There could be risks ahead, but we remain appropriately conservative. We did see minor impacts related to hurricanes and shortages of IV bags being the primary concerns.

Okay, super helpful. On the trauma portfolio, I heard the combined NSO and trauma was like 99%. Is that still the case? Can you give us a sense of the size of that portfolio in terms of revenue contribution?

Yes, we don’t break that out currently, but both have great uptake and are growing super high double-digits. We're not in a position to split them out or layout what the dollar impact is right now.

Thank you. One moment for our next question. Our next question comes from the line of Steven Lichtman from Oppenheimer. Your line is open.

Thank you. Good evening, guys, and congratulations. Dan, one of the drivers you mentioned for this quarter was successful distributor-to-direct conversions. Can you talk about the impact of those conversions?

Yes, Steve. We started with Globus years ago doing those conversions to a more direct exclusive sales force. We did the same with several former NUVA distributors. This allows us to invest better in those markets and hire people, pushing through to get the right amount of reps and share risk with those former distributors. Where we've had that opportunity, we're taking advantage to create further growth.

So you'd say you’re toward the end of that process?

I wouldn’t say we’re at the end. We’re year-end and have done several. There are probably several more to convert. We want to ensure people get comfortable with us and that we manage those conversions well. We're focused on controlling our salesforce for better investment.

Got it. And on orthopedics, how are you looking to overcome not having a full bag as major players? Do you see a need to rapidly advance products like Uni or others?

Everything we need is in progress. The Unis are developed and ready to go, along with revision knees. We’re far along with hip approvals. We anticipate being in a stronger spot at this time next year, and 2025 will be a significant year of impact.

One moment for our next question. Our next question comes from the line of Matthew Blackman from Stifel. Your line is open.

Good afternoon, everybody. Thanks for taking my question. Can you help us think through the most important puts and takes on the top and bottom line next year? Is there anything you would call out?

Qualitatively, in year two, you'd expect cross-selling to occur as the teams further integrate in the U.S. and internationally. Greater robot cross-selling is expected, and we should see more inbound interest from legacy NuVasive customers regarding EGPS. With more technology and products, it points to a positive outlook for our topline. Profitability growth could also happen as we improve operational efficiencies and capture synergies.

Hey, good evening. I want to get your thoughts on the durability of the spine market and how it can continue. Any thoughts on what might be driving growth?

We see strong growth this year, higher than historical norms. While we expect growth from changing demographics and people having jobs and insurance, I’d set my sights to normal market growth around 3% to 4%.

As you think about in-sourcing, the goal is to drive a lower cost per unit. The efficiencies achieved through this will also generate savings that will compound.

The R&D spending encompasses everything we want to do. I don't feel we are behind. Our existing investments will advance product flows.

Congrats again, guys. Stellar quarter. Thank you.

Thank you. And with no further questions in the queue, that concludes the Globus Medical Earnings Call. Thank you for participating. You may now disconnect. Everyone, have a great day.