Globus Medical [GMED] — Financial Model Notes
Analysis date: 2026-07-29. Every figure below is traced to a primary filing or a named computation. No
spreadsheet is shipped with this memo; these notes are the model, and they are written so any number in
GMED_Research.md or GMED_Valuation.md can be re-derived from them.
1. Revenue — the quarterly build
US registrants do not file a Q4 10-Q, so Q4 is derived, not read: Q4 = FY − 9M, both of which are filed.
This is the step the Tier-1 screen omitted, producing a five-quarter TTM window with a duplicated Q1.
| Quarter | Total net sales | Derivation | Nevro | Base business | Base YoY |
|---|---|---|---|---|---|
| Q1 2024 | $606.7m | 10-Q | — | $606.7m | — |
| Q2 2024 | $629.7m | 10-Q | — | $629.7m | — |
| Q3 2024 | $625.7m | 10-Q | — | $625.7m | — |
| Q4 2024 | $657.3m | FY24 $2,519.4m − 9M $1,862.1m | — | $657.3m | — |
| FY2024 | $2,519.4m | 10-K | — | $2,519.4m | — |
| Q1 2025 | $598.1m | 10-Q | — | $598.1m | −1.4% |
| Q2 2025 | $745.3m | 10-Q | $94.7m (derived) | $650.6m | +3.3% |
| Q3 2025 | $769.0m | 10-Q | $99.2m (derived) | $669.8m (disclosed) | +7.0% |
| Q4 2025 | $826.4m | FY25 $2,938.9m − 9M $2,112.5m | $99.7m (disclosed) | $726.7m (disclosed) | +10.6% |
| FY2025 | $2,938.9m | 10-K | $293.6m (disclosed) | $2,645.3m (disclosed) | +5.0% |
| Q1 2026 | $759.9m | 10-Q | $82.7m (disclosed) | $677.2m (disclosed) | +13.2% |
| TTM to Q1'26 | $3,100.6m | Q2'25+Q3'25+Q4'25+Q1'26 | $376.3m | $2,724.3m | +8.5% |
Nevro Q2'25 and Q3'25 are derived: the FY2025 8-K discloses Nevro's nine-month total ($293.6m) and its Q4 ($99.7m); the Q3 8-K discloses base business of $669.8m against total revenue of $769.0m, giving Nevro Q3 of $99.2m. Q2 is then $293.6 − $99.7 − $99.2 = $94.7m. Every other Nevro and base-business figure in the table is disclosed verbatim by the company.
Prior-four-quarters base for the TTM organic calculation: Q1'25 $598.1m + Q2'24 $629.7m + Q3'24 $625.7m + Q4'24 $657.3m = $2,510.8m. TTM base $2,724.3m ÷ $2,510.8m − 1 = +8.50%.
1.1 Revenue by category and geography (FY, 10-K Notes 4 and 20)
| ($m) | FY2023 | FY2024 | FY2025 | FY25 YoY |
|---|---|---|---|---|
| Musculoskeletal Solutions | 1,448.3 | 2,365.4 | 2,797.9 | +18.3% |
| Enabling Technologies | 120.2 | 154.0 | 141.0 | −8.4% |
| Total | 1,568.5 | 2,519.4 | 2,938.9 | +16.7% |
| United States | 1,279.8 | 2,000.1 | 2,367.6 | +18.4% |
| International | 288.7 | 519.3 | 571.3 | +10.0% |
Nevro's $293.6m sits entirely within Musculoskeletal Solutions ($254.2m US + $39.4m international, per MD&A), so MSK ex-Nevro grew +5.9% and Enabling Technologies is fully organic.
Q1 2026 by category (10-Q Note): Musculoskeletal $732.98m (vs $575.93m), Enabling Technologies $26.87m (vs $22.19m, +21.1%).
2. Income statement (FY, 10-K) and the purchase-accounting adjustments
| ($m) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Net sales | 1,568.5 | 2,519.4 | 2,938.9 |
| Cost of sales (excl. amortisation of intangibles) | (548.2) | (1,035.5) | (957.8) |
| Gross profit | 1,020.3 | 1,483.9 | 1,981.1 |
| Gross margin | 65.1% | 58.9% | 67.4% |
| Research and development | (124.0) | (163.8) | (147.2) |
| Selling, general and administrative | (643.8) | (981.4) | (1,178.5) |
| Amortisation of intangibles | (51.0) | (119.4) | (118.2) |
| Acquisition-related costs | (68.3) | (29.6) | (42.3) |
| Restructuring costs | — | (23.8) | (15.0) |
| Operating income | 133.1 | 166.0 | 479.8 |
| Interest income/(expense), net | 20.1 | (4.2) | 7.1 |
| FX transaction gain/(loss) | 14.3 | (43.3) | (3.0) |
| Bargain purchase gain | — | — | 117.7 |
| Other income | (2.1) | 2.2 | 3.4 |
| Pre-tax income | 165.4 | 120.7 | 605.1 |
| Income tax provision | (42.5) | (17.7) | (67.2) |
| Net income | 122.9 | 103.0 | 537.9 |
| Diluted EPS | $1.07 | $0.75 | $3.92 |
| Non-GAAP diluted EPS | n/a | $3.04 | $3.98 |
2.1 The inventory fair-value step-up (10-K Note 20, segment disclosure)
| ($m) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Amortisation of inventory fair-value step-up, within cost of sales | (71.7) | (215.4) | (19.5) |
| Gross margin ex step-up | 69.6% | 67.4% | 68.0% |
Restated, gross margin is flat. The FY2024 → FY2025 swing of +$195.9m is 62% of the $313.8m increase in operating income. The cash-flow statement carries the same item as "Amortisation of acquisition accounting fair value step-up": FY2023 $79.8m, FY2024 $242.1m, FY2025 $26.1m.
2.2 The bargain purchase gain (10-K Note 3)
| ($m) | At 2025-04-03 | Measurement-period adj. | At 2025-12-31 |
|---|---|---|---|
| Fair value of acquired identifiable assets and liabilities | 363.1 | +7.1 | 370.3 |
| Less: purchase price | (252.5) | — | (252.5) |
| Bargain purchase gain | 110.6 | +7.1 | 117.7 |
Driven by $144.9m of Nevro deferred tax assets (indefinite-carryforward federal NOLs). "The majority of the bargain purchase gain is non-taxable." It is recorded below the operating-income line, so operating income is unaffected; net income and GAAP EPS are not. Adjusted for it, FY2025 GAAP diluted EPS is approximately $3.06 (537.9 − 117.7 = 420.2 ÷ 137.2m diluted shares) rather than $3.92.
The Nevro purchase price allocation, in full:
| ($m) | Amount |
|---|---|
| Current assets excl. receivables and inventory | 10.3 |
| Accounts receivable | 70.8 |
| Inventories | 116.8 |
| Property and equipment | 29.1 |
| Operating lease ROU assets | 12.3 |
| Intangible assets | 56.0 (developed technology 36.0 / 7yr; customer relationships 11.5 / 10yr; trade names 8.5 / 15yr) |
| Deferred income taxes | 144.9 |
| Other long-term assets | 4.2 |
| Total assets | 444.3 |
| Total liabilities assumed | (74.0) |
| Net assets at fair value | 370.3 |
| Goodwill recognised | $0.0 — none |
Consideration: 38.383m shares × $5.85 = $224.5m, plus $18.5m term-loan/warrant repayment and transaction costs, plus $9.5m of cash-settled equity awards allocated to purchase price = $252.5m. A further $15.1m of cash-settled awards was deemed compensatory and expensed on the acquisition date. Transaction costs of $28.9m ran through acquisition-related costs.
Nevro contributed revenue of $293.6m and a net loss of $37.5m (excluding the bargain purchase gain) for 2025-04-03 to 2025-12-31 (10-K Note 3).
3. Base-business Adjusted EBITDA (company-disclosed, 8-K Ex-99.1 reconciliation tables)
| ($m) | Q4 2024 | Q4 2025 | FY2024 | FY2025 |
|---|---|---|---|---|
| Adjusted EBITDA — acquired Nevro subsidiaries | — | 21.2 | — | 36.0 |
| Adjusted EBITDA — base business | 196.9 | 259.3 | 735.0 | 883.6 |
| Base revenue | 657.3 | 726.7 | 2,519.4 | 2,645.3 |
| Base Adjusted EBITDA margin | 30.0% | 35.7% | 29.2% | 33.4% |
This is the operating-leverage evidence that survives §2.1 — Nevro is carved out on both sides and no inventory step-up sits in either the numerator or the comparison base.
Nevro's Adjusted EBITDA of $21.2m in Q4 2025 alone against $36.0m for the full nine months implies an exit run rate near $85m annualised on a $252.5m purchase price.
4. Balance sheet (10-Q, 2026-03-31)
| ($m) | 2026-03-31 | 2025-12-31 |
|---|---|---|
| Cash and cash equivalents | 561.0 | 526.2 |
| Short-term marketable securities | 68.9 | 31.1 |
| Accounts receivable, net | 686.4 | 678.9 |
| Inventories | 772.6 | 759.3 |
| Total current assets | 2,198.1 | 2,125.6 |
| Long-term marketable securities | 169.4 | 71.8 |
| Property and equipment, net | 557.1 | 564.5 |
| Intangible assets, net | 720.8 | 745.1 |
| Goodwill | 1,438.7 | 1,435.0 |
| Deferred income taxes | 214.8 | 218.2 |
| Total assets | 5,439.6 | 5,302.8 |
| Accounts payable + accrued expenses | 417.1 | 432.4 |
| Business acquisition liabilities (current + non-current) | 100.3 | 101.5 |
| Operating lease liabilities (current + non-current) | 115.2 | 118.7 |
| Total liabilities | 707.2 | 729.5 |
| Total equity | 4,732.3 | 4,573.3 |
There is no financial debt line. The XBRL debt tags (LongTermDebtNoncurrent, LongTermDebt,
ConvertibleDebtNoncurrent) return no values after 2023-12-31; the convertible notes carried at $417.4m at
2023-12-31 have been settled.
Net cash = 561.0 + 68.9 + 169.4 = $799.3m. Alternative treating the $100.3m of contingent consideration as debt-like: $699.0m. The headline figures use $799.3m; the alternative moves the reverse-DCF required CAGR by under 20bp and is not separately modelled.
Working-capital ratios, checked against the accounting-quality precedents: - DSO = 686.4 / (3,100.6/365) = 80.8 days. Normal for spine implants; nothing resembling AAOI's ~264. - DIO = 772.6 / (996.5/365) = 283 days, where TTM cost of sales = Q2'25 248.8 + Q3'25 252.5 + Q4'25 261.1 (= FY25 957.8 − 9M 696.7) + Q1'26 234.1 = $996.5m. High, but structural: spine implant sets are consigned to hospitals in complete size ranges, and GMED's own history is at this level. Inventory grew +1.8% QoQ against revenue +27% YoY, so there is no channel build. (TTM gross margin on the same build: 67.9%.)
5. Cash flow
| ($m) | FY2023 | FY2024 | FY2025 | Q1 2025 | Q1 2026 |
|---|---|---|---|---|---|
| Net cash from operating activities | 243.5 | 520.6 | 753.4 | 177.3 | 202.4 |
| Capital expenditure | (78.3) | (115.4) | (164.7) | (36.1) | (39.6) |
| Free cash flow | 165.2 | 405.2 | 588.7 | 141.2 | 162.8 |
| Share repurchases | (225.6) | (85.8) | (300.5) | (190.5) | 0.0 |
| Cash paid for acquisitions, net | (296.0) | (17.6) | (252.5) |
Accruals check. FY2025 operating cash flow of $753.4m exceeds net income of $537.9m by $215.5m — and the gap widens once the $117.7m non-cash bargain purchase gain is removed from earnings. Cash conversion is clean; the accruals signal is favourable, not adverse.
Share repurchases stopped entirely in Q1 2026 after $300.5m in FY2025 — cash was redirected to marketable securities (long-term securities rose from $71.8m to $169.4m in the quarter). Not explained in the filings; noted without interpretation.
6. Derived metrics used in the memo
| Metric | Value | Derivation |
|---|---|---|
| TTM revenue | $3,100.6m | 745.3 + 769.0 + 826.4 + 759.9 |
| TTM EBIT | $533.2m | 76.1 + 137.4 + 169.3 + 150.4 (Q4'25 = FY 479.8 − 9M 310.5) |
| TTM EBIT margin | 17.2% | |
| Market capitalisation | $10,946.5m | $80.64 × 135.745m |
| Enterprise value | $10,147.2m | mcap − $799.3m net cash |
| EV/Sales | 3.27x | |
| EV/EBIT | 19.0x | |
| FY2026 guided P/E | 17.0x | $80.64 ÷ $4.75 |
| NOPAT (TTM, normalised) | $421.2m | $533.2m × (1 − 0.21); Q1'26 actual effective tax rate 20.9% |
| Invested capital | $3,933.0m | equity $4,732.3m − net cash $799.3m + debt $0 |
| ROIC | 10.7% | vs ~9–10% WACC |
| 252-day realised volatility | 45.7% | log returns, Alpaca daily bars |
Effective tax rate caution: the FY2025 reported rate of 11.1% ($67.2m / $605.1m) is depressed by the non-taxable bargain purchase gain. Excluding it the rate is 13.8%; Q1 2026's actual rate is 20.9%. 21% is used throughout as the normalised rate, and the reported FY2025 rate is not used for anything.
7. What is not modelled, and why
- No FY2027+ forecast beyond the single revenue figure used in the 12-month target, which is labelled HOUSE at the point of use. There is no company guidance and no obtainable consensus.
- No franchise-level P&L. GMED aggregates its two operating segments into one reportable segment and discloses no franchise margins.
- No unit economics for Enabling Technologies. Placement counts, ASPs and attach rates are not disclosed.
- No Street consensus anywhere in this file. Alpha Vantage
EARNINGS_ESTIMATESquota was exhausted on 2026-07-29; the API returned its rate-limit notice, not data. Every forward number is either company guidance (labelled) or a house estimate (labelled). - No pro-forma NuVasive-combined revenue history, because the FY2025 10-K does not disclose one — Nevro fell below the ASC 805 pro-forma materiality threshold at ~10% of revenue, and the NuVasive pro forma is no longer presented three years after closing.