Welcome to Globus Medical’s First Quarter 2025 Earnings Call. I will now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, please proceed.

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 at globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2024 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. 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 or developments. Our discussion today will also include certain financial measures that are not calculated in accordance with generally accepted accounting principles or 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’ll now turn the call over to Dan Scavilla, our President and CEO.

Thanks, Brian, and good afternoon, everyone. Globus had a flat quarter in Q1, finishing slightly down in sales with negative 0.8% growth versus prior year on a constant currency basis. Drivers were softer enabling technology sales against difficult comps, temporary integration-related supply chain disruption, and timing of international distributor orders, partially offset by continued strengthening momentum in the U.S. Spine business. Revenue for the quarter was $598 million, non-GAAP EPS was $0.68, increasing 9% versus prior year against higher diluted shares and a $0.06 one-time 2024 EPS gain not repeated in 2025. Free cash flow was $141 million, increasing $117 million or 493% versus prior year. We returned to debt-free status in Q1, paying off the remainder of the nearly $900 million debt inherited from the NuVasive merger and generating enough cash to pay for the Q2 Nevro acquisition while investing in the ongoing business without interruption. In addition, we launched two new products in Q1 that will aid in driving market penetration. Since the NuVasive deal closed in September of 2023, we’ve cumulatively added over $1 billion in incremental sales, generated $650 million in free cash flow, and executed over $500 million of share repurchases, reducing deal dilution more than 20%. While Q1 sales were flat, we’re already seeing stronger results in Q2 throughout the business as we remediate supply chain disruptions, fill open distributor orders, and close robot deals. We will continue to focus on the long game, investing in sustained profitable growth and using our financial strength and discipline to accelerate top-line results while delivering strong EPS and free cash flow. Moving into the performance of our business areas, U.S. Spine grew 2% in Q1 with gains across our product portfolio expandables, MIS screws, lateral and ACDF platforms. The core spine growth is driven by several factors, including a high retention rate at all levels of our field sales team, the strength of our combined product offering, increased product cross-selling, and implant pull-through from robotic procedures. U.S. Q1 results were impacted by temporary integration-related supply chain disruptions and a planned reduction in third-party biologic sales resulting from expected changes in the reimbursement landscape for wound care products, including some of our tissue products. The reduction in third-party biologics was included in our annual guidance, and the supply chain continues to strengthen in Q2. Exiting April, we delivered above-market growth in our U.S. Spine business and feel positive about the quarters ahead. Competitive rep recruiting was strong in Q1, and the overall recruiting pipeline remains active as we enter Q2, positioning us for another meaningful recruiting year. As mentioned earlier, we launched two new products in Q1. The Cohere ALIF spacer with integrated screw fixation builds on the clinical success of our Cohere line, now offering surgeons a porous PEEK solution for anterior lumbar interbody fusion procedures. Our Cohere proprietary porous architecture supports bone ingrowth and reduces fibrous encapsulation while maintaining the radiolucency needed for precise intraoperative placement and postoperative fusion visualization. The Cohere A List spacer meets surgeon demands for improved OCL integration without sacrificing imaging clarity or mechanical performance. This expansion further establishes our leadership in advanced material science. The Reline eGPS fixation system delivers solutions for open, minimally invasive and hybrid procedures with preassembled and modular implants paired with versatile instruments to address both degenerative conditions and complex deformities effortlessly and efficiently. The integration of the Reline fixation system with the Excelsius enabling technology suite creates a powerful synergy of trusted reliability and innovation, delivering a comprehensive solution for surgeons while advancing our mission to help improve patient lives. The following Reline systems are now compatible with Excelsius technologies: Reline Open, Modular, Mass, Mass Reduction, Small Stature, Mass Midline, and Reline Cervical. The R&D pipeline remains rich, and I look forward to another year of meaningful launches improving outcomes as we strive to develop solutions to address unmet clinical needs. Moving to enabling technology, sales for the quarter were $22 million, a decrease of 31% against a record prior year comp. Capital sales tend to fluctuate among quarters with Q1 historically being slower, but we didn’t close the deals we planned on in Q1 in the face of market uncertainty. To our knowledge, we did not lose any pipeline deals to competition and expect to close active deals in the upcoming quarters. The deal pipeline is robust, and Q2 is off to a good start with several robot and imaging system deals closed in April and May. Robotic procedures performed since launch surpassed 100,000 procedures globally in Q1 and continue to accelerate, growing 6% versus prior year, which continues to create increased implant pull-through. Our international spine implant business grew 1% in Q1 on a constant currency basis, impacted by the timing of distributor orders and temporary supply chain disruptions. We are accelerating growth in Q2 as we reduce the back orders in several key markets. The combined trauma and NSO business declined 8% in Q1, driven by integration-related supply chain disruptions related to facility validations. This was partially offset by continued strength in the core trauma, which did deliver 34% growth for the quarter. The supply chain disruptions have been remedied, and product is being released for sale to the markets. We’re seeing overall trauma and NSO growth return to high levels in Q2. In April, we completed the purchase of all shares of the Nevro Corporation for an all-cash transaction of $250 million. The acquisition of Nevro further expands our reach into the musculoskeletal market, adding an additional $3 billion market space for us to compete in and grow. We believe that paresthesia-free pain relief enabled by high-frequency technology offers a clinically superior solution that is altering the standard of care for patients suffering from chronic pain. Nevro technology has potential beyond its current application to benefit our cranial enabling technology, next-generation spinal implants, adaptive AI, painful diabetic neuropathy, and other areas of our business. The Nevro patent portfolio strengthens our already best-in-class musculoskeletal innovation suite, while Globus's scale and customer base will accelerate market penetration of the differentiated high-frequency technology. We see this move as an expansion of our continuum of care and complementary to our current spinal portfolio offering. The strong and dedicated neuromodulation sales force will be able to leverage our existing spine team to drive uptake and penetration, while our spine team can offer more solutions to their surgeons. Globus’s financial strength will accelerate investments in neuromodulation to expand existing product reach and future product development. Combining Nevro into Globus’s existing infrastructure will improve the profitability and cash flow of the Nevro business, generating more cash for future investments and growth. 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 Globus team worldwide for your dedication and support, building 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. Reflecting on Q1, our quarter delivered a mixed set of results. While revenue was down slightly compared to the prior year quarter, we saw a meaningful expansion in profitability and cash flow. We continue to make disciplined progress across our strategic and operational pillars, which will fuel our long-term growth. This afternoon, my comments will focus on Q1 performance, operational updates and impacts, discuss the Nevro acquisition, highlight tariffs and potential impacts, and comment on insights as to our performance for the remainder of 2025. We view many of the Q1 impacts as short term and are encouraged by the good start we’ve seen across our business in Q2. Now, let’s turn our discussion to the first quarter. First quarter revenue was $598.1 million, declining 1.4% as reported and down 0.8% on a constant currency basis over the prior year quarter. As Dan mentioned earlier, the main drivers were softer enabling technology sales, temporary integration-related supply chain disruptions, and the timing of international distributor orders, which were partially offset by growth in U.S. Spine. Our Q1 GAAP net income was $75.5 million, translating into fully diluted GAAP earnings of $0.54 per share, growing from $0.59 versus the prior year quarter, due mainly to lower merger-related costs. Q1 non-GAAP net income was $94.8 million, resulting in $0.68 of fully diluted earnings per share, or an 8.5% improvement as reported versus the prior year quarter. In the prior year quarter, I highlighted a one-time $0.06 favorable noncash adjustment related to the useful lives of assets acquired from the NuVasive merger. Excluding this one-time favorable adjustment in the prior year quarter, operationally, our Q1 2025 non-GAAP EPS improved by $0.11, or 19.5% versus Q1 2024. The earnings improvement is driven by synergy capture, partially offset by lower revenue. Q1 free cash flow was a record $141.2 million. Musculoskeletal sales in the first quarter of 2025 were $575.9 million, essentially flat to the prior year quarter. Though U.S. Spine grew 2.2%, it was offset by declines in other areas of musculoskeletal, including neuromonitoring, wound care, and the timing of international distributor orders. In addition, temporary supply chain issues related to manufacturing integration impacted core spine and trauma. The neuromonitoring impact was driven by a change in reimbursement approach by a large insurance provider. Though case volumes are growing, the decline in reimbursements is negatively impacting revenue. Our Biologics business was impacted by expected changes in the reimbursement landscape for wound care products, specifically the placental tissue used in diabetic foot ulcers. In response to this shift in market dynamics, we are proactively realigning our Biologics strategy. We are positioning our tissue manufacturing capabilities to support direct business opportunities that provide more stable reimbursement and greater long-term business opportunities. Moving into supply chain impacts, we experienced temporary issues driven by the timing of in-house manufacturing scale-up. This disruption mainly impacted legacy NuVasive products and was driven by finalizing validation activities associated with production. These issues resolved themselves late in our first quarter and production has since come online for the impacted products. Our Q1 international distributor revenue was impacted by the timing of stocking orders as well as integration impacts driven by the aforementioned supply chain disruptions and some limited distributor consolidation. As we move through 2025, this disruption will subside as integration supply chain challenges ease and restocking orders are placed to replenish orders filled at the end of 2024. Overall, we estimate the impact of these business issues to total approximately $20 million to our musculoskeletal revenue in the quarter. Q1 Enabling Technologies revenue was $22.2 million, declining 30.6% compared to the prior year quarter. We note a tough Q1 comp as we did not see the usual sequential drop-off between Q4 2023 and Q1 2024, where revenue only declined 2.3% sequentially. Despite the tough comp, Q1 Enabling Tech revenue was clearly soft, mainly in robotics, driven by extended timelines to close deals. This underscores the lumpy patterns we see in revenue from time to time. We do not see softness as a sign of demand destruction; we remain bullish on this business and are encouraged by our good start to the second quarter. First-quarter U.S. revenue was $483.9 million, essentially flat to the prior year quarter, driven by earlier comments regarding cross musculoskeletal and enabling technologies. Q1 international revenue was $114.3 million, lower by 7.7% as reported and lower by 4.6% on a constant currency basis. The driver of lower international revenue ties back to earlier comments, mainly distributor orders, supply chain disruptions, and lower robotic sales. GAAP gross profit in the quarter was 63.6%, compared to 55.3% in the prior year quarter, with the resulting improvement driven primarily by lower inventory step-up amortization and synergy capture, partially offset by sales mix. Adjusted gross profit was 67.3%, compared to 69% in the prior year quarter. The prior year quarter gross profit includes a one-time favorable noncash adjustment that I mentioned earlier, which was worth $9.5 million and 1.5%, thus normalized Q1 2024 gross profit was 67.5%. Adjusting for this, the quarter-over-quarter twenty basis point decline was driven by the mix impact of lower Enabling Technology sales and lower neuromonitoring reimbursements, primarily offset by synergy actions. Research and development expenses in Q1 2025 were $33.1 million, or 5.5% of sales, compared to $57.3 million, or 9.4% of sales in the prior year quarter. Included in the prior year quarter was a $12.6 million charge related to the acquisition of in-process research and development, which didn't occur in the current quarter. Adjusting for that, Q1 2024 R&D expenses would have been $44.7 million, or 7.4% of sales. The resulting decline, both in dollars and as a percentage of sales, is attributable to synergy capture, resulting in lower headcount and third-party spending. SG&A expenses in the first quarter of 2025 were $242.8 million, or 40.6% of sales, compared to $248.7 million, or 41% of sales in the prior year quarter. The decline in spend is attributable to synergy capture, mainly from lower back office spending, partially offset by higher sales and marketing costs driven by the mix impact of lower international revenue, which carries a higher fixed component to compensation costs. Q1 net interest income was $1.7 million compared to $1.9 million of interest expense in the prior year quarter. The $3.6 million favorable change is being driven by lower interest expense on convertible debt. The GAAP tax rate for Q1 2025 was 27.2%, compared to 16.8% in the prior year quarter. The Q1 2024 rate was abnormally low, driven by the discrete nature of the IP R&D acquisition in the prior year quarter, higher GAAP pre-tax profits in the current year quarter, and lower valuation allowances on foreign-derived income. Our non-GAAP tax rate for the quarter was 24.1%, in line with the prior year non-GAAP rate of 24.5%. Cash, cash equivalents, and marketable securities were $461.3 million at March 31, 2025, compared to $956.2 million at December 31, 2024. The decline in cash is driven by two main factors. One, in March, we fully repaid in cash the remaining $450 million outstanding convertible debt assumed from the NuVasive merger. With the repayment of this debt instrument, Globus has now returned to being debt-free. In addition, during the quarter, we spent $190.3 million to repurchase approximately 2.4 million shares. With this action, we’ve completed our current share repurchase program. Since closing the merger in September 2023, we have paid off the remainder of the $871 million of debt inherited from the merger and invested $528 million to repurchase 8.4 million shares at an average price of $59.62 per share. These actions over the past 16 months highlight our focus on operational cash flow discipline to maintain a strong balance sheet while exhibiting conviction in the merger as our share repurchase activities resulted in us buying back over 20% of the dilution created in the stock for stock merger with NuVasive. Q1 net cash provided by operating activities was $177.3 million and free cash flow was $141.2 million, both of which are records for our first quarter. The increase is attributable to higher cash profits from the business driven by synergy capture and working capital improvements within accounts receivable, partially offset by higher capital spending, predominantly machinery and investments to in-source production and drive sales growth. Operationally, we remain focused on in-sourcing key products across our manufacturing facilities. Machinery ordered in 2024 has been landing in our facilities and is coming online throughout the year, while we continue to assess and reduce third-party spending. Despite the softness in our top line, our Q1 results showed a meaningful expansion in profitability, with Q1 adjusted EBITDA finishing at 29.7%, versus 25.4% in the prior year quarter as a result of synergy actions achieved. The expansion of profitability occurred despite the neuromonitoring reimbursement challenges mentioned earlier, which is negatively impacting consolidated adjusted EBITDA by a full two percentage points in the first quarter. Thus, neuromonitoring adjusted EBITDA would have been 31.7% in Q1 2025. Looking ahead, we remain confident in our approach to grow profitably while addressing specific areas of investment and business improvement. We remain on track to deliver synergy savings that will be reflected in the P&L as we move ahead. Subsequent to the quarter, on 04/03/2025, we closed our acquisition of Nevro Incorporated after Nevro shareholder and regulatory approval. We paid $250 million using existing cash reserves to fund the acquisition. We are actively rolling out action plans to get this business right sized to drive profitable sales growth while reducing excess spending to quickly adopt a Globus mindset as we seek to improve cash generated from this business. We’ve been actively reviewing and assessing tariff impacts for the legacy Globus business as well as the newly acquired Nevro business. Overall, we do not see tariffs as materially impacting our business through supply chain disruptions or from a cost-increase perspective. Much of the Globus business is vertically integrated and predominantly U.S.-based, thus minimizing tariff exposure. Where we do see tariff impacts, we have launched a series of cost action offsets, including, but not limited to, targeted price increases, vendor resourcing, and vendor cost renegotiations. We have actively and aggressively engaged on this initiative to ensure minimal impact on our business. Now, I’d like to turn our attention to financial guidance. Upon announcing the Nevro acquisition on February 6, we communicated 2025 net sales guidance in the range of $2.8 billion to $2.9 billion and fully diluted non-GAAP earnings per share between $3.10 to $3.40. At the present time, we are reaffirming the guidance for net sales in the range of $2.8 billion to $2.9 billion, but we’re decreasing our guidance for fully diluted non-GAAP earnings per share to a range between $3 to $3.3. This $0.10 decrease on the top and low ends in EPS guidance is to account for the additional carrying costs of expenses related to closing the Nevro deal earlier than planned. To summarize, although Q1 top-line results were softer than anticipated, we delivered meaningful gains in profitability, deleveraging, and free cash flow, key priorities in our value creation strategy. Q2 is off to a good start highlighted by U.S. Spine and Enabling Technologies. We are well positioned to build on this momentum and remain focused on executing a seamless integration of the Nevro acquisition to drive future growth. In closing, I’d like to thank the entire Globus team, including our newly integrated Nevro colleagues for their focus and execution. As we continue to strengthen our core portfolio and unlock new market opportunities, our priorities remain clear: disciplined profitable growth, operational excellence, and sustained shareholder value as we build a leading musculoskeletal company of the future.

Our first question comes from Matt Miksic of Barclays.

So, it goes without saying, I think this isn’t the quarter anyone was expecting. Maybe if you could talk a little bit about your confidence here coming into April. I think you mentioned operating on or above your metrics, but how much of what happened in Q1 maybe spilled into Q2? What amount of what happened in Q1 do you think could recover somewhat in Q2 in rapid fashion? What’s going to take a little more heavy lifting? And then I have one follow-up, if I could.

Yeah. So Matt, I’ll go first. At the end of the day, there’s a couple of things. As we transition facilities into new ones and validate them, we continue to scale up our in-house manufacturing. Some things that took longer than planned created some back orders. That, coupled with timing of distributor orders—again, heavy in Q4, light in Q1—probably coming back. Ultimately, the real thing here is the elongated selling process we experienced in Q1 with all of the market uncertainty that really impacted the results. Without getting deep into Q2, we’ve seen positive effects in our U.S. Spine business that really look solid. We are remedying and supplying the products from the back orders. I see that as a temporary issue that will recover in the second quarter. That will have an impact throughout international and trauma as well as U.S. We are seeing deals occur at a decent pace within the robot space. Overall, I have confidence that this is just a blip, and we’re moving back to where we need to be. And look, we own a bad quarter; we’re going to fix it and drive it forward to come out with the right results.

Okay. That’s helpful color. And then maybe on the synergies side for Nevro, could you talk a little about now that the deal is closed? Any additional color or confidence you can express about the pace and the areas of opportunity for driving efficiencies or aligning the organization in a way that gets you at or above your dilution expectations for this year? Thanks.

Hey, Matt, this is Keith. Thanks for the question. It’s a great question as you think about bringing Nevro online. The place we’re really going to focus on coming out of the gate is really operational expenses. Nevro’s gross margins are in the high 60s, and we believe that over time we can work to expand that. But I would say in the near term, the key focus will be figuring out their operational expenses and working to reduce those. Looking at the P&L, Nevro’s SG&A expenses candidly are too high for that business to operate profitably long term. These are the areas we’re going to focus on right out of the gate.

Our next question comes from Vik Chopra of Wells Fargo.

Thanks for taking the questions. Two for me. I appreciate your comments on the elongated selling cycle for robots, but I’m just curious if you’ve seen any impact from recently launched spine robots via larger competitors. And whether people are asking for more alternative forms of financing or an increase in your rental program? And then a quick follow-up, please.

This is Keith. Thanks, Vik, for the question. In terms of the elongated selling cycle, I haven’t seen situations where other competitors are slowing down the process. Looking at the mix of how we’re selling robots, rentals, leases—our mix this quarter is still heavily focused on outright sales. However, options of what we’re quoting are increasing, whether it be third-party financing or rentals. I would say that this may have slowed some things down, which contributes to some of the elongated selling cycles. But I don’t see competitor robots thus far as driving a delay in us closing deals.

Okay. Thank you. That’s super helpful. And my follow-up question is, I know you don’t guide to EBITDA margins, but just maybe directionally help us think about EBITDA margins in 2025 as you fold in the Nevro deal?

Yes, we don’t guide the EBITDA margins, but as I think about where we’re going, our goal is to achieve the 30s. Adding on Nevro and the timing of bringing it on earlier will have a slight impact. I would say that we should be in the high 20s this year.

Our next question comes from Matthew O'Brien of Piper Sandler.

Hey, this is Phil on behalf of Matt. Thanks for taking our questions. Understood that there are a lot of moving parts, but wanted to hear more specifically how your rep count has been holding up. Could you confirm that you aren’t seeing any uptick in Nuvasive sales rep leaving at this point? And thanks for the color on the pipeline looking good, but just any further color on that.

Yes, Phil, I’ll answer that. We’re not seeing any unusual or high volume departures from any of our sales reps regardless of where they used to work. We’re actually seeing them dig in and do well. The U.S. is really a strength outside of the back orders, and they’re doing well. The momentum is increasing there. So not only are the teams staying together, but they’ve significantly moved the average daily sales up over the past four to five months. They’re digging in and doing well. They’re staying together as a team. We’ve not seen any interruption that would cause concern. Certainly, there are no rep departures impacting our results in the first quarter.

That’s helpful. And then shifting gears on the positive, one to focus on the cash flow that you consistently deliver. Thinking past the Nevro deal, what are your expectations for cash use? Might we see more M&A or maybe some more share repurchases?

That’s a great question. As I think about cap structure moving forward, we want to continue to generate strong cash flow. We still view ourselves as a growth company. The first priority is going to be internal investment. We’ve done several deals here over the last couple of years. M&A is still part of our cap structure. In the near term, I would say that anything we do would be more of a tuck-in nature. Share repurchases have been part of our cap structure and we see them continuing as part of our strategy, but it’s not the primary driver. If we were to experience any overreactions in the market, we would take advantage of that and probably go back and buy stock opportunistically, applying it towards future acquisitions. We know the strength of this business long term, and so we’re going to stay focused on delivering that.

Our next question comes from Richard Newitter of Truist Securities.

Thanks for taking the questions. Can you just confirm that all of Nevro is included in the guidance dilution and revenue? And if it is, what’s your organic growth guidance?

Yes, Rich, this is Keith. I can confirm that yes, it is included in the business. We haven’t broken out the parts and pieces of it, but as we move forward when we report, we will show base business Globus versus prior year versus acquisitions.

Okay. Got it. So can you maybe tell us then, because we’d all been thinking of you standalone and we had forecasts based on that, are the components of your organic guide dramatically different for standalone?

No, the components of our organic guide are not materially different on a standalone basis.

Okay. And then maybe for my follow-up, on the capital outlook, it sounds like you’ve seen something improve in April, maybe even into early May. Can you provide an understanding of what the elongating selling cycle looks like, and if that’s occurring, what gives you confidence that it narrows again in short order?

Yes, Rich, and I want to clarify. We’re pleased with the progress in Q2 and we’re seeing deals close. I don’t know if an elongation will snap back; market uncertainties such as tariffs and capital market disruptions are present. Our job is to ensure we’ve got a potential portfolio, and we’re actively working on closing deals. If that leads to a timeframe shift of a month or two, that’s fine. We’re focused on the long-term growth. The market is not fully penetrated, and the potential remains large. More of our former NuVasive products are now available on robots, which positions us well to double our addressable market.

Our next question comes from Matthew Blackman of Stifel.

Thanks for taking my question. I have a couple. My first one is similar to Rich’s. Wanted to push a bit on that reaffirmed top line guide and the assumptions backing it. This was a pretty substantial miss in the first quarter, and with the reaffirmed guide, does that mean you expect to claw back this lost Q1 business throughout the year? Did you change anything in how you’re layering in contribution, or dis-synergies from Nevro or NuVasive?

I would say that there’s not a material change in the guide. Dan commented that the biologics impact was contemplated in our guide for the year, and the neuromonitoring impact was also included. I discussed a $20 million impact on musculoskeletal; roughly $7 million to $10 million of that is from the wound care and neuromonitoring. Looking ahead, while Q1 results were soft, we remain positive about the potential increases in enabling tech sales and our spine business as we move forward. Supply chain issues are behind us, and we see orders resuming. We don’t view these as lost sales, but rather expect to recover them moving forward.

Okay. Appreciate that, but could you provide a bit of help on the second quarter given the step down in Q1, in terms of where we should be landing on top or bottom lines relative to current consensus?

We don’t get down to that level of granularity within the quarters or provide specific guidance. If there’s any more clarity needed, we can address that in an after-hours call.

Our next question comes from Shagun Singh of RBC.

I just wanted to take a step back and hope you can address one question from investors: Is Nevro the right acquisition, considering the ongoing NuVasive acquisition integration? Can you talk about Nevro, why it makes sense? And where are you in NuVasive integration? How confident are you that we won’t hit a snag in 2025?

Thanks, Shagun. Let’s keep it fact-based. Nevro wasn’t part of what we did in Q1. While timing is never ideal, it was an opportunistic buy, and for $250 million, we enter the neuromodulation business with a clinically superior solution. The strength of the patent portfolio aligns with our long-term goals. We focus on the long-term potential here. Our integration efforts are separate from anyone doing robotics or U.S. Spine. Supply chain manufacturing from Nevro is not affecting our current operations. This acquisition has great long-term potential, and we believe we are capable of addressing our integration challenges successfully.

Just to add, you had a follow-up regarding confidence in putting first-quarter issues behind us. In Q1, two significant issues were the soft enabling tech sales and insourcing supply chain disruptions. Those issues are resolved; production is coming back online. We’re moving forward with product flowing from both manufacturing and third-party facilities, which puts us back on track. Concerning enabling tech, we see robustness in our pipeline but acknowledge the current elongated selling cycle.

Got it. A quick follow-up: What’s the status of the FDA warning letter? Should we expect a continued focus on M&A?

We’ve made a lot of progress with the FDA warning letter and are waiting for them to come back for inspection. We are ready for that and want to resolve this matter shortly. Regarding M&A, given our focus on finalizing the NuVasive and Nevro integrations, we may slow down on M&A activity and emphasize integration activities.

Our next question comes from Caitlin Cronin of Canaccord Genuity.

Thanks for taking the questions. With the U.S. performance at 2%, what did you see in terms of market growth and overall procedural health?

I don’t have specific data to share for the market growth. However, I’ve spoken with surgeons, and some indicated they have observed a slowdown. Some approvals are reportedly taking longer from insurance companies. That said, I look at our focus on creating cadences, clearing out back orders, launching new products, and executing as the path to get back on track very soon.

Got it. Just on enabling tech funding; has Modulus been approved for Excelsius, and how much of an uptick are you already seeing with cross-selling to NuVasive surgeons?

Modulus is not yet approved, but it’s in the works. Regarding Reline, we’re placing robots into NuVasive accounts, and we are seeing continued momentum. Of course, we would like the timelines to be faster, but all instrumentation is done on Reline; all products are ready, Modulus is next, and we are training teams to maximize our impact in NuVasive accounts.

Our next question comes from David Saxon of Needham & Company.

Thanks for taking my questions. I had a couple here this afternoon, one on Nevro and then one on ExcelsiusFlex. Can you discuss the pace of the integration with Nevro and key milestones we should be aware of? Regarding Nevro’s SG&A, how quickly can you work to bring that down to the desired level?

In terms of Nevro, operational expenses are a key area of focus. We are in the early stages of integration and working on that. I won’t provide a specific timeline for future state, but our goal is to work aggressively to control and align operational expenses. That level of spending is unsustainable for profitable sales over time, and we’re aggressively collaborating to address it.

Great. Regarding eFlex, what is the level of interest in the system, number of placements, and how’s that order book building today?

We’re still building the book of capital placements and it’s going well. The order book is increasing, and we anticipate entering the market within the second quarter. We expect to start seeing implant pull-through ramp up in future quarters.

Our final question comes from Unidentified Analyst.

Thanks for taking the question. Can you discuss what impact the announced tariffs may have on your margins?

We don’t see any real material impact on margins. Our business is predominantly vertically integrated. The countries we source from have minimal impacts due to actions taken, including vendor cost negotiations and offsets such as targeted price increases. I do not see tariffs affecting our earnings or margins this year or next.

To add to what Keith mentioned, given that 95% of our production is U.S.-based, our sourcing materials is also primarily domestic. This advantages us in navigating tariff challenges. Our current calculations indicate no need for a strategic change as we’re managing these tariff issues effectively.

Our next question comes from Craig Bijou of Bank of America Merrill Lynch.

Thanks for taking the questions. Dan, I wanted to ask about U.S. Spine growth at 2%. Have supply disruptions impacted this number? And what was the growth excluding one-time factors?

Yes, that’s a good question, Craig. The answer is yes; we experienced some impacts from backorders. I can’t provide a split on specifics, but the disruptions certainly contributed to our results. Additionally, robotic sales and prolonged sales processes can impact pull-through and the overall numbers.

I’m going to try another quantification question. Can you quantify the impact on enabling tech in Q1, as well as the deals that closed in early Q2?

While I apologize, I cannot provide that specific quantification at this moment—it’s more appropriate to share during our Q2 call as we are still seeing plays for sales that occur within those months. Some carryovers and new deals are in play, so it’s challenging to provide clarity right now.

Thank you. With no further questions, that concludes the Globus Medical’s earnings call. Thank you for participating. You may now disconnect.