What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-05 · 170 added, 356 removed, 662 unchanged (44% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

(In thousands, except share and per share values)

23 unchanged sentences

Operating lease liabilities

Senior convertible notes

Deferred income taxes and other tax liabilities

5 unchanged sentences

Authorized 500,000,000 shares;

issued and outstanding 113,474,233 and 113,905,565 shares at September 30, 2024 and December 31, 2023, respectively

issued and outstanding 112,926,345 and 114,990,219 shares at March 31, 2025 and December 31, 2024, respectively

Class B common stock;

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Authorized 275,000,000 shares;

issued and outstanding 22,430,097 and 22,430,097 shares at September 30, 2024 and December 31, 2023, respectively

issued and outstanding 22,430,097 and 22,430,097 shares at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In thousands, except per share amounts)

3 unchanged sentences

Selling, general and administrative

Provision for litigation, net

Amortization of intangibles

35 unchanged sentences

Balance at March 31, 2025

Stock-based compensation

Grant of contingent restricted stock units

Exercise of stock options

Issuance of Class A common stock under employee and director equity option plans, net

Comprehensive income/(loss)

Repurchase and retirement of common stock

Balance at June 30, 2024

Stock-based compensation

Grant of contingent restricted stock units

Exercise of stock options

Issuance of Class A common stock under employee and director equity option plans, net

Comprehensive income/(loss)

Balance at September 30, 2024

GLOBUS MEDICAL, INC.

12 unchanged sentences

Comprehensive income/(loss)

Balance at March 31, 2023

Stock-based compensation

Grant of contingent restricted stock units

Exercise of stock options

Comprehensive income/(loss)

Balance at June 30, 2023

Stock-based compensation

Grant of contingent restricted stock units

Exercise of stock options

Issuance of Class A common stock under employee and director equity option plans, net

Issuance of equity for NuVasive Merger

Comprehensive income/(loss)

Balance at September 30, 2023

Repurchase and retirement of common stock

Balance at March 31, 2024

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(In thousands)

6 unchanged sentences

Amortization of inventory fair value step-up

Amortization of 2025 Note fair value step up

Amortization of 2025 Notes fair value step-up

Stock-based compensation expense

19 unchanged sentences

Acquisition of businesses, net of cash acquired and purchases of intangible and other assets

Acquisition of intangible assets

Net cash provided by/(used in) investing activities

4 unchanged sentences

Repurchase of common stock

Repayment of senior convertible notes

Net cash provided by/(used in) financing activities

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Non-cash investing and financing activities:

Equity issued in conjunction with the NuVasive Merger

Accrued purchases of property and equipment

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and, where applicable, our consolidated subsidiaries.

(b) NuVasive Merger

On September 1, 2023, the Company merged with NuVasive, Inc.

(“NuVasive”) and Zebra Merger Sub Inc., a wholly owned subsidiary of the Company (“Merger Sub”).

Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into NuVasive (the “Merger”), with NuVasive surviving as a wholly owned subsidiary of the Company.

Upon the consummation of the Merger, each issued and outstanding share of common stock of NuVasive, $ 0.001 par value per share, was converted into 0.75 fully paid and non-assessable shares of the Company’s Class A Common Stock, and the right to receive cash in lieu of fractional shares.

Refer to Note 3, Asset acquisitions and Business Combinations for further information.

Globus Medical was deemed to be the accounting acquirer of NuVasive for accounting purposes under U.S.

generally accepted accounting principles (“U.S.

Accordingly, prior periods within these condensed consolidated financial statements may not be comparable.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The accompanying interim unaudited condensed consolidated financial statements have been prepared in conformity with U.S.

GAAP for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Generally Accepted Accounting Principles (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

Securities and Exchange Commission (the “SEC”).

As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2024.

In the opinion of management, these condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position as of September 30, 2024, and results of operations for the three and nine months ended September 30, 2024.

In the opinion of management, these condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position as of March 31, 2025, and results of operations for the three months ended March 31, 2025.

The results of operations for any interim period may not be indicative of results for the full year.

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The preparation of the condensed consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and

liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

We base our estimates, in part, on historical experience that management believes to be reasonable under the circumstances.

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The majority of our Enabling Technologies product contracts contain multiple performance obligations, including maintenance and support, and revenue is recognized as we fulfill each performance obligation, generally at the point in time in which the obligation is fulfilled.

When contracts have multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.

When a contract has multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.

Revenue associated with products holding rights of return or trade-in are recognized when the Company concludes there is not a risk of significant revenue reversal in future periods for the expected consideration in the transaction.

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The changes to contract liabilities related to deferred revenue are as follows:

Nine Months Ended

September 30,

Three Months Ended

(In thousands)

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(f) Marketable Securities

Our marketable securities include municipal bonds, corporate debt securities, commercial paper, asset-backed securities, and securities of government, federal agency, and other sovereign obligations and are classified as available-for-sale as of September 30, 2024.

Our marketable securities include municipal bonds, corporate debt securities, commercial paper, asset-backed securities, securities of government, federal agency, and other sovereign obligations, all of which have been liquidated as of March 31, 2025.

S hort-term and long-term marketable securities are recorded at fair value on our condensed consolidated balance sheets.

Any change in fair value of our available-for-sale securities, that do not result in recognition or reversal of an allowance for credit loss or write-down, are recorded, net of taxes, as a component of accumulated other comprehensive income or loss on our condensed consolidated balance sheets.

Any change in fair value of our available-for-sale securities, that does not result in recognition or reversal of an allowance for credit loss or write-down, is recorded, net of taxes, as a component of accumulated other comprehensive income or loss on our condensed consolidated balance sheets.

Premiums and discounts are recognized over the life of the related security as an adjustment to yield using the straight-line method.

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The majority of our inventory is finished goods and we utilize both in-house manufacturing and third-party suppliers to produce our products.

We periodically evaluate the carrying value of our inventories in relation to estimated forecasts of product demand, which takes into consideration the life cycle of product releases.

We periodically evaluate the carrying value of our inventories in relation to estimated forecasts of product demand, which takes into

consideration the life cycle of product releases.

When quantities on hand exceed estimated sales forecasts, we record a write-down for such excess inventories.

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If the related project is not completed in a timely manner, we may have an impairment related to the IPR&D, calculated as the excess of the asset’s carrying value over its fair value.

During the three and nine months ended September 30, 2024, there were no impairments in goodwill, finite-lived intangible assets, or IPR&D.

During the three months ended March 31, 2025, there were no impairments in goodwill, finite-lived intangible assets, or IPR&D.

(j) Stock -Based Compensation

9 unchanged sentences

The respective fair values of restricted stock units and performance restricted stock units are estimated on the day of grant based on the closing price of the Company’s common stock.

We assumed equity-classified awards for certain NuVasive restricted stock units (“RSUs”), and performance restricted stock units (“PRSUs”), as part of the Merger.

We assumed equity-classified awards for certain NuVasive restricted stock units (“RSUs”), and performance restricted stock units (“PRSUs”), as part of the NuVasive Merger (as defined below).

These RSUs and PRSUs are measured at the grant date based on the estimated fair value of the award.

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(m) Acquisition-Related Costs

Acquisition-related costs represents the change in fair value of business acquisition-related contingent consideration and specific costs related to the consummation of the acquisition process such as banker fees, legal fees and other acquisition-related professional fees .

Acquisition-related costs represent the change in fair value of business acquisition-related contingent consideration and specific costs related to the consummation of the acquisition process such as banker fees, legal fees and other acquisition-related professional fees.

(n) Restructuring Costs

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This plan was designed to optimize the organizational structure, merge synergies and leverage the strength of both commercial organizations.

As a result of aligning the cost structure of the Company’s businesses and corporate functions with its financial objectives;

the Company also recorded employee separation charge and one-time termination benefits.

As a result of aligning the cost structure of the Company’s businesses and corporate functions with its financial objectives, the Company also recorded employee separation charge and one-time termination benefits.

(o) Accounts Receivable and Related Valuation Accounts

4 unchanged sentences

An increase in the provision for credit losses may be required when the financial condition of our customers or their collection experience deteriorates.

Our exposure to credit losses may also increase if its customers are adversely affected by changes in healthcare laws, coverage and reimbursement, macroeconomic pressures or uncertainty associated with local or global economic recessions, disruption associated with pandemics, or other customer-specific factors.

Our exposure to credit losses may also increase if our customers are adversely affected by changes in healthcare laws, coverage and reimbursement, macroeconomic pressures or uncertainty associated with local or global economic recessions, disruption associated with pandemics, or other customer-specific factors.

(p) Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (the “FASB”), issued Accounting Standards Update (“ASU”) No.

2023-09 , Income Taxes (Topic 740), Improvements to Income Tax Disclosures, to enhance the transparency and decision-making utility of income tax disclosures.

The enhancement will provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities.

In January 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).

The update amends the effective date of Update 2024-03 to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 referred to as non-calendar year end entities.

All public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted.

The amendments should be applied prospectively with retrospective applications also permitted.

Additionally in December 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).

The update improves financial reporting by requiring that public business entities disclose additional information about certain costs and expenses categories:

(a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization in the notes to financial statements at interim and annual reporting periods.

This update is effective for fiscal years beginning after December 15, 2026, and early adoption is permitted.

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The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

In December 2024, the FASB issued ASU No.

2024-04 Debt—Debt with Conversion and Other Options (Subtopic 470-20).

The amendments in this update clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

To account for a settlement of a convertible debt instrument as an induced conversion, an inducement offer is required to provide the debt holder with, at a minimum, the consideration (in form and amount) issuable under the conversion privileges provided in the terms of the instrument.

This update is effective for fiscal years beginning after December 15, 2025, and early adoption is permitted.

The amendments should be applied prospectively with retrospective applications also permitted.

The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

(q) Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09 , Income Taxes (Topic 740), Improvements to Income Tax Disclosures, to enhance the transparency and decision-making utility of income tax disclosures.

Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities.

The Company adopted ASU No.

2023-09 as of the fiscal year after 2024.

See Note 14 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

In November 2023, the FASB, issued ASU No.

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The amendment introduced new requirements to disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), extend certain annual disclosures to interim periods, clarify that single reportable segment entities must apply ASC 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM.

This update is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years after December 15, 2024, early adoption is permitted.

The amendments should be applied retrospectively.

The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

(q) Recently Adopted Accounting Pronouncements

The Company adopted ASU No.

2023-07 as of fiscal year after 2024.

See Note 18 Segment and Geographic Information in the accompanying notes to the consolidated financial statements for further detail.

In June 2022, the FASB issued ASU No.

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The adoption did not have any material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an entity (acquirer) to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers.

This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted.

The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company adopted ASU No.

2021-08 as of January 1, 2023.

The adoption did not have a material impact on the Company’s consolidated financial statements.

ASSET ACQUISITIONS AND BUSINESS COMBINATIONS

Asset Acquisitions

During the first quarter of 2025, the Company entered into a license agreement for certain patents of medical device technology in the spine field for a total of $ 5.0 million due at closing, and 1 percent license fee on future sales of products developed and covered under the license agreement.

The Company recorded $ 5.0 million of patents intangible assets, with a useful life of 10.1 years.

During the first quarter of 2024, the Company completed a share acquisition of a biotech company focused on research and development for hemostasis solutions.

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The purchase price consisted of $ 12.0 million of cash paid at closing.

The transaction also provides for $ 12.0 million contingent consideration which is payable upon meeting the Good Manufacturing Process milestones, as promulgated by the U.S.

The transaction also provides for $ 12.0 million of contingent consideration which is payable upon meeting the Good Manufacturing Process milestones, as promulgated by the U.S.

Food and Drug Administration (the “FDA”), and consideration of $ 10.0 million contingent upon the developed products obtaining approval from the FDA.

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During the first quarter of 2024, the Company completed one acquisition that was not material to the overall condensed consolidated financial statements during the periods presented.

This acquisition has been included in the condensed consolidated

financial statements from the date of acquisition.

The purchase price consisted of approximately $ 0.5 million of cash paid at closing and $ 19.1 million of contingent consideration payments, resulting in goodwill of $ 17.9 million and reacquired rights of $ 1.8 million based on the estimated fair values.

The contingent payments for this acquisition are based upon achieving various performance milestones over a period of 10 years and are payable in a combination of cash and RSUs.

During the first quarter of 2023, the Company completed one acquisition that was not material to the condensed consolidated financial statements and has been included in our financial statements from the date of acquisition.

The purchase price consisted of approximately $ 1.4 million of cash.

The Company recorded identifiable assets of $ 0.4 million of instruments and $ 1.0 million of inventory.

During the fourth quarter of 2022, the Company acquired the membership interests of Harvest Biologics LLC, which engages in the business of selling systems that produce autologous biologics.

The purchase price consisted of approximately $ 30.0 million of cash paid at closing, plus $ 1.4 million of preliminary post-closing adjustments.

The Company recorded identifiable net assets, based on their estimated fair values, for inventory of $ 3.3 million, goodwill of $ 15.2 million, customer relationships and other intangibles of $ 10.5 million with a weighted average useful life of 20 years, and developed technology of $ 2.4 million with a weighted average useful life of 8 years.

The Company finalized the purchase price allocation of the assets and liabilities acquired within one year from the date of acquisition.

During the second quarter of 2022, the Company completed one acquisition that was not material to the overall condensed consolidated financial statements during the periods presented.

This acquisition has been included in the condensed consolidated financial statements from the date of acquisition.

The purchase price consisted of approximately $ 0.2 million of cash paid at closing and $ 4.4 million of contingent consideration payments, resulting in goodwill of $ 4.6 million based on the estimated fair values.

The contingent payments for this acquisition are based upon achieving various performance milestones over a period of 10 years and are payable in a combination of cash and RSUs.

NuVasive Merger

On September 1, 2023, the Company merged with NuVasive, Inc.

On September 1, 2023, the Company entered into the Merger Agreement (the “NuVasive Merger Agreement”) with NuVasive, Inc.

(“NuVasive”) and Zebra Merger Sub Inc., a wholly owned subsidiary of the Company (“Merger Sub”).

Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into NuVasive (the “Merger”), with NuVasive surviving as a wholly owned subsidiary of the Company.

As part of the Merger, the Company assumed equity awards for certain NuVasive RSUs and NuVasive PRSUs in accordance with the terms of the Merger Agreement.

Certain awards included a change in control provision (single trigger) which accelerated the vesting of the awards on the closing date of the Merger.

These awards were considered as part of the total purchase price.

The unvested awards will continue to vest in accordance with the terms of the original award agreement, except for certain PRSUs that were converted into RSUs.

Once vested, the holders will receive shares of the Company’s Class A Common Stock.

Of the total consideration for the assumed equity awards, $ 28.6 million was allocated to the purchase price and $ 42.3 million was deemed compensatory as it was attributable to post acquisition vesting.

Of the $ 42.3 million of total compensation related to the assumed awards, $ 12.9 million was expensed on the acquisition date due to accelerated vesting of the awards, recognized as Merger related costs, and $ 29.4 million relates to future services and will be expensed over the remaining service periods of the unvested awards on a straight-line basis.

Of the $ 29.4 million related to future services, $ 15.4 million of expense has been recognized as of September 30, 2024.

Concurrently with the Merger, the Company repaid the outstanding $ 420.8 million under NuVasive’s revolving senior credit facility in addition to assuming the 0.375 % Senior Convertible Notes due 2025 (“ 2025 Notes”), the privately negotiated call options (“2025 Hedge”) and the privately negotiated warrants (“2025 Warrants”).

The aggregate consideration in connection with the closing of the Merger was as follows:

(In thousands)

NuVasive shares outstanding as of September 1, 2023

NuVasive accelerated equity awards

Globus exchange ratio

Globus Class A Common Stock issued in exchange for NuVasive shares

Globus closing share price

Total Value Class A Common Stock

2025 Warrants

Repayment of revolving credit facility

Fair value of assumed equity awards

Total purchase price

We accounted for the Merger using the acquisition method of accounting, which requires the NuVasive assets and liabilities to be recorded on our balance sheet at fair value as of the acquisition date.

The following table summarizes the final purchase price allocation for the Merger as of September 30, 2024:

(In thousands)

Preliminary Purchase Price Allocation as of September 1, 2023

Measurement Period and Other Adjustments

Preliminary Purchase Price Allocation as of December 31, 2023 (as adjusted)

Measurement Period and Other Adjustments

Final Purchase Price Allocation

Current assets (excluding accounts receivable and inventories)

Accounts receivable

Property, plant, and equipment

Operating lease ROU asset

Intangible assets

Other long-term assets

Deferred income taxes

Current Liabilities

Operating lease liabilities, including current portion

Business acquisition liabilities, including current portion

Senior convertible notes

Deferred income taxes and other tax liabilities

Other liabilities

Total liabilities

Fair value of acquired identifiable assets and liabilities

Purchase price

Fair value of acquired identifiable assets and liabilities

( 1,679,681 )

( 1,369,361 )

( 1,393,896 )

The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies.

The majority of goodwill is non-deductible for tax purposes.

Details of our valuation methodology and significant inputs for fair value measurements are included below.

The fair value measurements for property, plant and equipment and intangible assets are based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The fair value of work-in-process and finished goods inventory utilizes a sales comparison approach which estimates the selling price of the inventory in completed condition less costs of disposal and a reasonable profit allowance for the selling effort.

The fair value of property and equipment utilizes a combination of the cost approach, income approach, and sales comparison approach less amounts for capitalized research and development costs existing on NuVasive’s closing balance sheet.

The fair value of the identifiable intangible assets was determined using variations of the income approach, namely the multi-period excess earnings and relief from royalty methodologies.

The most significant assumptions applied in the development of the intangible asset fair values include:

the amount and timing of future cash flows, the selection of discount and royalty rates, and the assessment of the asset’s economic life.

The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives.

The following table summarizes the estimated fair value of NuVasive’s identifiable intangible assets acquired and their amortization period (in years):

Fair Value as of

(In thousands)

September 30, 2024

Developed Technology

Customer Relationships

Fair value of the 2025 Notes was determined using the publicly traded price.

NuVasive’s results have been included in the Company’s financial statements for the period subsequent to the date of the acquisition on September 1, 2023.

Due to the continuing integration of NuVasive’s operations into the Company, it is impractical to determine NuVasive’s net income/loss during the current period, which is included in the Company’s Net Income .

The following unaudited pro forma information for the Company presents combined net sales and net income, as if the merger had been completed on January 1, 2022, and is presented for informational purposes only :

Three Months Ended

Nine Months Ended

(In thousands)

September 30, 2023

Pro forma net sales

Pro forma net income

The following table represents net sales by product category:

Pursuant to the terms of the NuVasive Merger Agreement, Merger Sub merged with and into NuVasive (the “NuVasive Merger”), with NuVasive surviving as a wholly owned subsidiary of the Company.

Upon the consummation of the NuVasive Merger, each issued and outstanding share of common stock of NuVasive, $ 0.001 par value per share, was converted into 0.75 fully paid and non-assessable shares of the Company’s Class A Common Stock (as defined below), and the right to receive cash in lieu of fractional shares.

The aggregate consideration in connection with the closing of the NuVasive Merger was $ 2.604 billion.

The Company recorded net identifiable assets of $ 1.394 billion and goodwill of $ 1.210 billion.

The following table represents net sales by product category as of March 31, 2025 and 2024, respectively:

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

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MARKETABLE SECURITIES

The composition of our short-term and long-term marketable securities was as follows:

September 30, 2024

(In thousands)

Gross Unrealized Losses

Municipal bonds

Corporate debt securities

Asset-backed securities

Government, federal agency, and other sovereign obligations

Total short-term marketable securities

Corporate debt securities

Asset-backed securities

Government, federal agency, and other sovereign obligations

Total long-term marketable securities

As of March 31, 2025, the Company had no holdings of short-term or long-term marketable securities.

The composition of our short-term and long-term marketable securities as of December 31, 2024 was as follows:

December 31, 2024

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Corporate debt securities

Commercial paper

Government, federal agency, and other sovereign obligations

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Total long-term marketable securities

The short-term marketable securities have effective maturity dates of less than one year and the long-term marketable securities have effective maturity dates ranging from one to three years as of September 30, 2024 and December 31, 2023, respectively.

FAIR VALUE MEASUREMENTS

The following table represents the fair value of assets and liabilities, as of September 30, 2024 and December 31, 2023, respectively, including the following:

The following table represents the fair value of assets and liabilities, as of March 31, 2025 and December 31, 2024, respectively, including the following:

(In thousands)

‎ September 30,

Cash equivalents

Municipal bonds

Corporate debt securities

Asset-backed securities

Government, federal agency, and other sovereign obligations

Senior Convertible Notes due 2025

Bifurcated Conversion Option of the Senior Convertible Notes due 2025

Business acquisition liabilities

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Corporate debt securities

Commercial paper

Asset-backed securities

Government, federal agency, and other sovereign obligations

Senior Convertible Notes due 2025

Bifurcated Conversion Option of the Senior Convertible Notes due 2025

Business acquisition liabilities

Our marketable securities and certain cash equivalents are classified as Level 2 within the fair value hierarchy, as we measure their fair value using market prices for similar instruments and inputs such as actual trade data, benchmark yields, broker/dealer quotes and other similar data obtained from quoted market prices or independent pricing vendors.

The bifurcated conversion option and 2025 Hedge are classified as Level 2 within the fair value hierarchy, based on implied equity volatility.

The estimated fair value of the 2025 Notes, inclusive of the embedded conversion option, at September 30, 2024 was $ 439.7 million.

The fair value was determined based on the quoted price of the 2025 Notes in an active market on the last trading day of the reporting period and has been classified as Level 1 within the fair value hierarchy.

Fair value of the revenue-based business acquisition liabilities was determined using a discounted cash flow model, probability model, and an option pricing methodology.

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* The weighted average rates were calculated based on the relative fair value of each business acquisition liability.

The change in the carrying value of the business acquisition liabilities during the three and nine months ended September 30, 2024 and 2023, respectively included the following:

The change in the carrying value of the business acquisition liabilities during the three months ended March 31, 2025 and 2024, respectively included the following:

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

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Ending balance

Purchase price contingent consideration includes obligations acquired in the NuVasive Merger in addition to other immaterial acquisitions.

Changes in the fair value of business acquisition liabilities are driven by changes in market conditions and the achievement of certain performance conditions.

Inventories included the following:

September 30,

Inventories included the following as of March 31, 2025 and December 31, 2024, respectively:

(In thousands)

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Total inventories

As part of the NuVasive Merger, a net step up in the value of inventory of $ 219.6 million was recorded, with certain acquired inventory receiving a step up of $ 286.7 million, and certain acquired inventory receiving a step down of $ 67.1 million.

The net step up was composed of $ 3.1 million for work in process and $ 216.5 million for finished goods.

The amortization of the inventory step up recorded in product cost of sales was $ 60.7 million and $ 167.9 million for the three and nine months ended September 30, 2024, respectively.

Of the $ 60.7 million amortization in the three months ended September 30, 2024, $ 5.5 million related to a prior period catchup of amortization associated with the final measurement period valuation adjustment recorded to the inventory balance.

As of September 30, 2024, the total remaining balance of inventory fair value adjustment was a step down of $ 19.8 million.

During the three months ended September 30, 2024 and 2023, net adjustments to cost of sales related to excess and obsolete inventory were $ 5.7 million and $ 2.7 million, respectively.

The net adjustments for the three months ended September 30, 2024 and 2023 reflect a combination of additional expense for excess and obsolete related provisions ($ 6.9 million and $ 4.7 million, respectively) offset by sales and disposals ($ 1.2 million and $ 2.0 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

During the nine months ended September 30, 2024 and 2023, net adjustments to cost of sales related to excess and obsolete inventory were $ 16.2 million and $ 6.7 million, respectively.

The net adjustments for the nine months ended September 30, 2024 and 2023 reflect a combination of additional expense for excess and obsolete related provisions ($ 20.7 million and $ 11.6 million, respectively) offset by sales and disposals ($ 4.5 million and $ 4.9 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

During the three months ended March 31, 2025 and 2024, net adjustments to cost of sales related to excess and obsolete inventory were $ 6.0 million and $ 3.9 million, respectively.

The net adjustments for the three months ended March 31, 2025 and 2024 reflect a combination of additional expense for excess and obsolete related provisions ($ 10.2 million and $ 5.2 million, respectively) offset by sales and disposals ($ 4.2 million and $ 1.3 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

PROPERTY AND EQUIPMENT

Property and equipment included the following:

September 30,

Property and equipment included the following as of March 31, 2025 and December 31, 2024, respectively:

(In thousands)

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Modules and cases are used to store and transport the instruments and implants.

Depreciation expense related to property and equipment was as follows:

Depreciation expense related to property and equipment was as follows during the three months ended March 31, 2025 and 2024 respectively:

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

GOODWILL AND INTANGIBLE ASSETS

The change in the carrying amount of goodwill during the twelve months ended December 31, 2023 and the nine months ended September 30, 2024, respectively included the following:

The change in the carrying amount of goodwill during the twelve months ended December 31, 2024 and the three months ended March 31, 2025, respectively included the following:

(In thousands)

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Foreign exchange

September 30, 2024

Intangible assets as of September 30, 2024 included the following:

September 30, 2024

March 31, 2025

Intangible assets as of March 31 2025 included the following:

March 31, 2025

(In thousands)

‎ Amortization

Supplier network

Customer relationships & other intangibles

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‎ Amortization

Supplier network

Customer relationships & other intangibles

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Total intangible assets

The following table summarizes amortization of intangible assets for future periods as of September 30, 2024 :

The following table summarizes amortization of intangible assets for future periods as of March 31, 2025 :

(In thousands)

‎ Amortization

Remaining 2024

ACCRUED EXPENSES

Accrued expenses as of September 30, 2024 and December 31, 2023, respectively included the following:

September 30,

Accrued expenses as of March 31, 2025 and December 31, 2024, respectively included the following:

(In thousands)

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Total accrued expenses

The carrying values of the Company’s 2025 Notes, acquired in the NuVasive merger, as of September 30, 2024, were as follows:

September 30, 2024

The carrying values of the Company’s 2025 Notes (as defined below), acquired in the NuVasive Merger, as of March 31, 2025, and December 31, 2024, respectively, were as follows:

(In thousands)

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Debt, net of unamortized fair value adjustments for acquisition accounting

Three Months September 30,

Nine Months Ended September 30,

Three Months Ended

(In thousands)

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The September 2023 Credit Agreement contains financial and other customary covenants, including a funded net indebtedness to adjusted EBITDA ratio.

As of September 30, 2024, we have no t borrowed under the September 2023 Credit Agreement and we were in compliance with all covenants.

As of March 31, 2025, we have no t borrowed under the September 2023 Credit Agreement and we were in compliance with all covenants.

0.375% Senior Convertible Notes due 2025

On September 1, 2023, in connection with the closing of the Merger, the Company, NuVasive and Wilmington Trust National Association, as trustee (the “Trustee”) entered into a supplemental agreement (the “First Supplemental Indenture”) to the Indenture, dated March 2, 2020 (the “Base Indenture”), by and between NuVasive and the Trustee, relating to NuVasive’s $ 450.0 million in aggregate principal amount of 0.375 % Convertible Senior Notes due 2025.

As of the closing date of the Merger, $ 450 million of aggregate principal amount of the 2025 Notes were outstanding.

Pursuant to the First Supplemental Indenture, the 2025 Notes are convertible into the Company’s Class A Common at a conversion rate of 8.0399 shares per $ 1,000 principal amount of 2025 Notes, which is equivalent to a conversion price of approximately $ 124.38 per share, subject to adjustments.

The 2025 Notes may be settled in cash, stock, or a combination thereof, solely at the Company’s discretion.

Pursuant to the terms of the First Supplemental Indenture, Globus agreed to guarantee NuVasive’s obligations under the Indenture.

The 2025 Notes bear interest at a rate of 0.375 % per annum, payable semi-annually in arrears on March 15 and September 15 of each year.

The 2025 Notes mature on March 15, 2025 , unless earlier converted, redeemed, or repurchased in accordance with their terms.

The Merger constituted a Merger Event as defined in the Base Indenture.

In the event of a Merger Event, the Company is required to execute a supplemental indenture providing for (i) each holder of 2025 Notes with the right to convert each $ 1,000 principal amount of 2025 Notes into the same type of consideration that holders would have been entitled to receive if such holders had held a number of shares of NuVasive Common Stock equal to the applicable conversion rate in effect immediately prior to such Merger Event, and (ii) subsequent adjustments to the conversion rate set forth in the Base Indenture.

Until the close of business on the second scheduled trading day immediately preceding March 15, 2025, holders may convert their 2025 Notes at any time.

In addition, following certain corporate events that occur prior to the maturity date or if the Company issues a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its 2025 Notes in connection with such a corporate event or in connection with such redemption in certain circumstances.

No principal payments are due on the 2025 Notes prior to maturity.

Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the 2025 Notes do not contain any financial covenants and do not restrict the Company from conducting significant restructurings, paying dividends or issuing or repurchasing any of its other securities.

Upon the initial recognition of the 2025 Notes pursuant to the purchase accounting for the Merger, the embedded conversion feature does not meet the equity scope exception described in ASC 815-40, Contracts in Entity’s Own Equity.

The embedded conversion

feature is bifurcated and presented as a liability on the consolidated balance sheet with subsequent measurement at fair value with changes in fair value recognized as “Other income/(expense)” .

The Company recognized, at Merger closing, the embedded conversion feature at fair value of $ 0.7 million and allocated the residual $ 407.8 million of the 2025 Notes fair value to the host debt instrument.

As of the September 30, 2024, the fair value of the embedded conversion feature was $ 0.5 million.

As a result of the Merger and recognizing the fair value of the 2025 Notes, along with the embedded conversion feature, as of the acquisition date, the Company recorded $ 42.2 million debt discount to be accreted as interest expense over the life of the notes.

On September 1, 2023, in connection with the closing of the Merger, the Company, NuVasive, and certain dealers entered into amendment and guarantee agreements with respect to privately negotiated call option transactions (“2025 Hedges”) pursuant to which NuVasive purchased options from such dealers exercisable into its own common stock in connection with the sale of the 2025 Notes.

Pursuant to such amendment and guarantee agreements, the 2025 Hedges are exercisable into Globus Class A Common in certain circumstances and the Company guaranteed NuVasive’s obligations under the 2025 Hedges.

Subject to the amended 2025 Hedge, the Company is entitled to purchase up to 3,617,955 shares of the Company’s Class A Common at a strike price of $ 124.38 .

The 2025 Hedge will expire on the second scheduled trading day immediately preceding March 15, 2025 and is expected to reduce the potential equity dilution upon conversion of the 2025 Notes if the daily volume-weighted average price per share of the Company’s common stock exceeds the strike price of the 2025 Hedge.

In accordance with ASC 805, the Company recognized the 2025 Hedge at an acquisition date fair value of $ 1.7 million.

The 2025 Hedge does not meet the equity scope exception described in ASC 815-40, Contract in Entity’s Own Equity, and will be presented as asset on the consolidated balance sheet with subsequent measurement at fair value with changes in fair value recognized as “Other income/(expense)”.

As of September 30, 2024, the fair value of the 2025 Hedge is $ 0.5 million recorded within the Other Assets with the consolidated balance sheet.

An assumed exercise of the 2025 Hedge by NuVasive is considered anti-dilutive since the effect of the inclusion would always be anti-dilutive with respect to the calculation of diluted earnings per share.

On September 1, 2023, in connection with the closing of the NuVasive Merger, the Company, NuVasive and Wilmington Trust National Association, as trustee (the “Trustee”) entered into a supplemental agreement (the “First Supplemental Indenture”) to the Indenture, dated March 2, 2020 (the “Base Indenture”), by and between NuVasive and the Trustee, relating to NuVasive’s $ 450.0 million in aggregate principal amount of 0.375 % Convertible Senior Notes due 2025 (the “2025 Notes”).

On March 15, 2025, the $ 450.0 million in remaining aggregate principal amount of the 2025 0.375 % Convertible Senior Notes was paid off, net of an immaterial number of converted units that were settled in cash.

The amendment and guarantee agreements with respect to privately negotiated call option transactions entered into on September 1, 2023 among the Company, NuVasive and certain dealers expired with zero value on the second scheduled trading day immediately preceding March 15, 2025.

2025 Warrants

On September 1, 2023, in connection with the closing of the Merger, the Company, NuVasive, and certain dealers entered into amendment and guarantee agreements with respect to privately negotiated warrant transactions (“2025 Warrants”), pursuant to which NuVasive sold warrants to such dealers for its own common stock in connection with the initial sale of the 2025 Notes.

Pursuant to such amendment and guarantee agreements, the warrants are exercisable into Globus Class A Common in certain circumstances and the Company guaranteed NuVasive’s obligations under the 2025 Warrants.

On September 1, 2023, in connection with the closing of the NuVasive Merger , the Company, NuVasive, and certain dealers entered into amendment and guarantee agreements with respect to privately negotiated warrant transactions (“2025 Warrants”), pursuant to which NuVasive sold warrants to such dealers for its own common stock in connection with the initial sale of the 2025 Notes.

Pursuant to such amendment and guarantee agreements, the warrants are exercisable into Globus Class A Common (as defined below) in certain circumstances and the Company guaranteed NuVasive’s obligations under the 2025 Warrants.

Subject to the amended 2025 Warrants, the holders of the 2025 Warrants are entitled to purchase up to 3,617,955 shares of the Company’s common stock at a strike price of $ 170.45 .

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The repurchase program has no time limit and may be suspended for periods or discontinued at any time.

The Company repurchased no shares during the three months ended September 30, 2024.

The Company repurchased 1.6 million shares under this program at an average price of $ 52.14 , for a total dollar amount of $ 84.8 million during the nine months ended September 30, 2024.

As of September 30, 2024, the Company has remaining authorization to repurchase a total of $ 190.3 million of the Company’s Class A Common.

The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, debt covenant requirements, alternative investment opportunities and other market conditions.

F unding of share repurchases is expected to come from operating cash flows and excess cash.

The Company repurchased 2.4 million shares under this program at an average price of $ 77.91 , for a total dollar amount of $ 190.3 million during the three months ended March 31, 2025.

As of March 31, 2025, the Company has no remaining authorization to repurchase the Company’s Class A Common.

Shares repurchased by the Company are accounted for under the constructive retirement method, in which the shares repurchased are immediately retired, as there is no plan to reissue the shares.

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Accumulated Other Comprehensive Income (Loss)

The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss) for the three months ended September 30, 2024 and 2023, respectively:

(In thousands)

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Other comprehensive income/(loss), net of tax

Accumulated other comprehensive income/(loss), net of tax, at September 30, 2024

Accumulated other comprehensive income/(loss), net of tax, at March 31, 2025

(In thousands)

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Other comprehensive income/(loss), net of tax

Accumulated other comprehensive income/(loss), net of tax, at September 30, 2023

Accumulated other comprehensive income/(loss), net of tax, at March 31, 2024

Amounts reclassified from accumulated other comprehensive loss, net of tax, related to unrealized gains/losses on marketable securities were released to other income, net in our condensed consolidated statements of operations and comprehensive income.

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These are included in basic net income per share as of the date that all necessary conditions have been satisfied and are included in the denominator for dilutive calculation for the entire period if such shares would be issuable as of the end of the reporting period assuming the end of the reporting period was the end of the contingency period.

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended

Nine Months Ended

September 30,

The following table sets forth the computation of basic and diluted earnings per share for the year ended March 31, 2025 and 2024, respectively:

(In thousands, except per share amounts)

Net income/(loss) for basic

Interest and amortization of debt discount costs on the 0.375 % Senior Convertible Notes due 2025, net of tax

Adjusted net income (loss) for diluted

Denominator for basic and diluted net income per share:

1 unchanged sentence

Dilutive stock options, RSUs, and PRSUs

Senior Convertible Notes due 2025

Weighted average shares outstanding for diluted

3 unchanged sentences

Anti-dilutive Senior Convertible Notes due 2025 excluded from the calculation

In accordance with ASU No.

2020-06, Debt with Conversion and Other Options (Subtopic 470-20), the Company applies the if-converted method in computing the effect of the Company's 2025 Notes on diluted net income per share.

For periods in which the Company reports net income, the numerator of the diluted per share computation is adjusted for interest expense and amortization of debt issuance costs, net of tax, and the denominator is adjusted for the weighted average number of shares into which each of the Company’s 2025 Notes could be converted.

The effect is only included in the calculation of diluted net income per share for those 2025 Notes which reduce net income per share.

STOCK-BASED AWARDS

1 unchanged sentence

our 2012 Equity Incentive Plan (the “2012 Plan”) and our 2021 Equity Incentive Plan (the “2021 Plan”), the NuVasive 2014 Equity Incentive Plan (the “NuVasive 2014 Plan”), and the Ellipse Technologies 2015 Incentive Award Plan (the “Ellipse 2015 Plan”).

The 2021 Plan, the NuVasive 2014 Plan and the Ellipse 2015 Plan are the only active stock plans.

The 2021 Plan, the Ellipse 2015 Plan are the only active stock plans.

The purpose of the 2012 Plan was, and of the 2021 Plan is, to provide incentive to employees, directors, and consultants of Globus.

7 unchanged sentences

however, awards previously granted under the 2012 Plan remain outstanding and are administered by our Board under the terms and conditions of the 2012 Plan.

Under the 2012 Plan, the aggregate number of shares of Class A Common that were able to be issued subject to options and other awards is equal to the sum of (i) 3,076,923 shares, (ii) any shares available for issuance under the 2008 Equity Incentive Plan as of March 13, 2012, (iii) any shares underlying awards outstanding under the 2008 Plan as of March 13, 2012 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares and (iv) starting January 1, 2013, an annual increase in the number of shares available under the 2012 Plan equal to up to 3 % of the number of shares of our common and preferred stock outstanding at the end of the previous year, as determined by our Board.

Under the 2012 Plan, the aggregate number of shares of Class A Common that were able to be issued subject to options and other awards is equal to the sum of (i) 3,076,923 shares, (ii) any shares available for issuance under the 2008 Equity Incentive Plan (the “2008 Plan”) as of March 13, 2012, (iii) any shares underlying awards outstanding under the 2008 Plan as of March 13, 2012 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares and (iv) starting January 1, 2013, an annual increase in the number of shares available under the 2012 Plan equal to up to 3 % of the number of shares of our common and preferred stock outstanding at the end of the previous year, as determined by our Board.

The number of shares that were able to be issued or transferred pursuant to incentive stock options under the 2012 Plan was limited to 10,769,230 shares.

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The 2021 Plan was approved by our Board in March 2021, and by our stockholders in June 2021.

Under the 2021 Plan, as amended to date, the aggregate number of shares of Class A Common that are able to be issued subject to options and other awards is equal to the sum of (i) 9,000,000 shares, (ii) any shares available for issuance under the 2012 Plan as of June 3, 2021 and (iii) any shares underlying awards outstanding under the 2012 Plan or 2021 Plan as of June 3, 2021 that, on or after that date, are forfeited, terminated,

expired or lapse for any reason, or are settled for cash without delivery of shares.

The number of shares that may be issued or transferred pursuant to incentive stock options under the 2021 Plan is limited to 9,000,000 shares.

The shares of Class A Common covered by the 2021 Plan include authorized but unissued shares, treasury shares or shares of common stock purchased on the open market.

In connection with the Merger, the Company assumed outstanding awards for the RSUs and PRSUs under the NuVasive 2014 Plan and the Ellipse 2015 Plan in accordance with the terms in the Merger Agreement.

In connection with the NuVasive Merger , the Company assumed outstanding awards for the RSUs and PRSUs under the NuVasive 2014 Plan and the Ellipse 2015 Plan in accordance with the terms in the NuVasive Merger Agreement.

The ultimate issuance amount of the PRSUs is determined by the Company’s Compensation Committee.

Share payout levels range from 0 % to 100 % depending on the respective terms of an award.

As of September 30, 2024, pursuant to the 2021 Plan, the NuVasive 2014 Plan, and the Ellipse 2015 Plan, there were 9,887,190 shares, 297,607 shares, and 372,523 shares, respectively, of Class A Common reserved and 3,185,194 shares, no shares, and 285,757 shares, respectively of Class A Common available for future grants.

As of March 31, 2025, pursuant to the 2021 Plan, the NuVasive 2014 Plan, and the Ellipse 2015 Plan (collectively, the “Plans”), there were 10,903,345 shares, 168,414 shares, and 357,897 shares, respectively, of Class A Common reserved and 2,552,463 shares, no shares, and 299,780 shares, respectively, of Class A Common available for future grants.

The NuVasive 2014 Plan terminated as to new awards pursuant to its terms in the second quarter of 2024.

Stock Options

Stock option activity during the nine months ended September 30, 2024 is summarized as follows:

Stock option activity during the three months ended March 31, 2025 is summarized as follows:

‎ Shares (thousands)

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Outstanding at December 31, 2024

Outstanding at September 30, 2024

Exercisable at September 30, 2024

Expected to vest at September 30, 2024

The total intrinsic value of stock options exercised was $ 14 million and $ 2.2 million during the three months ended September 30, 2024, and 2023, respectively.

The total intrinsic value of stock options exercised was $ 23.9 million and $ 10.3 million during the nine months ended September 30, 2024, and 2023, respectively.

Outstanding at March 31, 2025

Exercisable at March 31, 2025

Expected to vest at March 31, 2025

The total intrinsic value of stock options exercised was $ 12.2 million and $ 2.8 million during the three months ended March 31, 2025, and 2024, respectively.

The fair value of the options was estimated on the date of the grant using a Black-Scholes option pricing model with the following assumptions:

Nine Months Ended

September 30,

Three Months Ended

Risk-free interest rate

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Expected dividend yield

The weighted average grant date fair value of stock options granted during the three months ended September 30, 2024, and 2023 was $ 28.63 and $ 20.61 per share, respectively.

The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2024, and 2023 was $ 21.90 and $ 21.95 per share, respectively.

The weighted average grant date fair value of stock options granted during the three months ended March 31, 2025, and 2024 was $ 36.4 and $ 20.90 per share, respectively.

Restricted Stock Units

Restricted stock unit activity during the nine months ended September 30, 2024 is summarized as follows:

Restricted stock unit activity during the three months ended December 31, 2025 and March 31, 2025, respectively, is summarized as follows:

Restricted Stock

4 unchanged sentences

Outstanding at December 31, 2024

Outstanding at September 30, 2024

Outstanding at March 31, 2025

Performance-Based Restricted Stock Units

Performance-based restricted stock unit activity during the nine months ended September 30, 2024 is summarized as follows:

Performance-based restricted stock unit activity during the three months ended December 31, 2024 and March 31, 2025, respectively, is summarized as follows:

Performance-Based Restricted Stock

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Outstanding at December 31, 2024

Outstanding at September 30, 2024

Outstanding at March 31, 2025

Stock-Based Compensation

Compensation expense related to stock options granted to employees and non-employees under the Plans was as follows:

Compensation expense related to stock options granted to employees and non-employees under the Plans during the three months ended March 31, 2025 and 2024, respectively was as follows:

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Stock-based compensation expense

Stock-based compensation expense classified in Acquisition-Related Costs

Net stock-based compensation capitalized into inventory

Total stock-based compensation cost

As of September 30, 2024, there was $ 96.2 million of unrecognized compensation expense related to unvested employee stock options, RSUs, and PRSUs that vest over a weighted average period of 2.57 years.

As of March 31, 2025, there was $ 130.6 million of unrecognized compensation expense related to unvested employee stock options, RSUs, and PRSUs that vest over a weighted average period of 2.92 years.

In computing our income tax provision, we make certain estimates and judgments, such as estimated annual taxable income or loss, annual effective tax rate, nature and timing of permanent and temporary differences between taxable income for financial reporting and tax reporting, and the recoverability of deferred tax assets.

Our estimates and assumptions may change as new events occur, additional information is obtained, or as the tax environment changes.

Should facts and circumstances change during a quarter causing a material change to the estimated effective income tax rate, a cumulative adjustment is recorded the nature and timing of cumulative adjustment is recorded.

The following table provides a summary of our effective income tax rate for the three and nine months ended September 30, 2024 and 2023, respectively:

Should facts and circumstances change during a quarter causing a material change to the estimated effective income tax rate, a cumulative adjustment is recorded.

The following table provides a summary of our effective income tax rate for the three months ended March 31, 2025 and 2024, respectively:

Three Months Ended

Nine Months Ended

September 30,

Effective income tax rate

For the three months ended September 30, 2024, the decrease in the effective tax rate was due primarily to a benefit from a release of tax reserves of $ 2.9 million in the current period and a higher stock compensation windfall benefit of $ 1.5 million, partially offset by higher income before income taxes of $ 54.5 million.

For the nine months ended September 30, 2024, the decrease in the effective tax rate was due primarily to a benefit from a release of tax reserves of $ 3.7 million in the current period, a higher stock compensation windfall benefit of $ 2.1 million, and lower income before income taxes of $ 44.3 million.

For the three months ended March 31, 2025, the increase in the effective tax rate was due primarily to income before taxes of $ 103.7 million as compared to a loss of $ 8.6 million for the three months ended March 31, 2024, and one-time tax adjustments as a percentage of income/(loss) before taxes.

RESTRUCTURING AND OTHER COSTS

For the three months ended September 30, 2024, the Company incurred restructuring and other costs primarily related to employee termination benefits as a part of the 2024 Synergy Plan.

The Company recorded employee termination benefits as a part of the 2024 Synergy Plan.

The 2024 Synergy Plan was designed to optimize the organizational structure of Globus by reducing the size of our workforce.

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Totals include stock-based compensation expense, classified in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, where applicable.

The following table provides a summary of recognized pre-tax costs for the three and nine months ended September 30, 2024:

The following table provides a summary of recognized pre-tax costs for the three months ended March 31, 2025 and 2024, respectively:

Three Months Ended

Nine Months Ended

Three Months Ended

(In thousands)

September 30, 2024

March 31, 2025

March 31, 2024

Cost of Sales

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Total restructuring and other costs

The following table provides a summary of activity related to the restructuring program for the three and nine months ended September 30, 2024:

The following table provides a summary of activity related to the restructuring program for the three months ended March 31, 2025 and 2024, respectively:

Three Months Ended

Nine Months Ended

Three Months Ended

(In thousands)

September 30, 2024

March 31, 2025

March 31, 2024

Beginning Balance

Cash Payments

Settled non-cash

September 30, 2024

Settled non-cash (a)

March 31, 2025

(a) Represents share-based compensation settled without cash payments.

The Company leases certain equipment, vehicles, office and storage facilities via various operating and financing lease agreements.

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Certain lease agreements require the Company to pay taxes, insurance, and maintenance, and provide for options to extend the term beyond the initial lease termination date.

We use judgment to determine whether it is reasonably possible that we will extend the lease beyond the initial term and the length of the

possible extension.

We use judgment to determine whether it is reasonably possible that we will extend the lease beyond the initial term and the length of the possible extension.

Leases that have terms of less than 12 months are treated as short-term and we do not recognize right-of-use assets or lease liabilities for such leases.

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Finance leases amortize the right-of-use assets and amortize the interest on the lease liability over the term of the lease.

Amounts reported in the condensed consolidated balance sheet were as follows:

September 30,

Amounts reported in the condensed consolidated balance sheet were as follows as of March 31, 2025 and December 31, 2024, respectively, were as follows :

(In thousands)

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Total lease liabilities

The table below summarizes the Company’s lease costs arising from the operating and financing lease obligations:

The table below summarizes the Company’s lease costs arising from the operating and financing lease obligations for the three months ended March 31, 2025 and 2024, respectively :

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

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Total lease expense

Future minimum lease payments under non-cancellable leases as of September 30, 2024 are as follows:

Future minimum lease payments under non-cancellable leases as of March 31, 2025, are as follows:

(In thousands)

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Long-term lease obligations

The table below summarizes the Company’s supplemental cash flow information and assumptions used:

Nine Months Ended

September 30,

The table below summarizes the Company’s supplemental cash flow information and assumptions used for the three months ended March 31, 2025 and 2024, respectively :

Three Months Ended

(In thousands, except weighted average lease term and discount rate)

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Moskowitz Family LLC Litigation

On November 20, 2019, Moskowitz Family LLC filed suit against us in the U.S.

On November 20, 2019, Moskowitz Family LLC (“Moskowitz”) filed suit against us in the U.S.

District Court for the Western District of Texas for patent infringement.

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On December 14, 2023, a jury returned a defense verdict in favor of Globus.

On September 30, 2024, Moskowitz Family LLC filed an appeal to the verdict.

The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss, therefore, we have no t recorded a liability, outside of counsel fees, related to this litigation as of September 30, 2024 .

On September 30, 2024, Moskowitz filed an appeal to the verdict.

SEGMENT AND GEOGRAPHIC INFORMATION

Operating segments are defined as components of an organization for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

We have identified two operating segments, Musculoskeletal Solutions and Enabling Technologies, based on how management reviews the business, makes investing and resource allocation decisions and assesses operating performance.

We aggregate these operating segments into one reportable segment, based on conclusions reached after considering relevant factors such as economic similarity, customer base, regulatory environment, production processes, nature of services and products provided, and our comprehensive approach to product development and offerings targeting patient needs through procedural-based solutions.

The following table represents total net sales, net by geographic area, based on the location of the customer:

Operating segments are defined as components of an enterprise about which separate financial information is available that are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.

Generally, financial information is required to be reported on the basis that it is used internally for evaluating segment performance and deciding how to allocate resources to segments.

Scavilla, Chief Executive Officer, is identified as the CODM who determines resource allocation, investing activities, and performance assessment.

The CODM uses revenue, gross profit and operating income to assess financial performance of the segments and make key operating decisions.

Our CODM does not evaluate operating segments using asset or liability information.

The Company identified two operating segments, Musculoskeletal Solutions and Enabling Technologies, based on the overall management structure and business strategy.

The Company aggregates these operating segments into one reportable segment, based on conclusions reached after considering relevant factors such as economic similarity, customer base, regulatory environment, production processes, nature of services and products provided, and our comprehensive approach to product development and offerings targeting patient needs through procedural-based solutions.

The following table represents total segment revenue, significant segments expenses and other expenses for the three months ended March 31, 2025, and 2024, respectively:

Three Months Ended

Nine Months Ended

September 30,

Cost of goods sold

Amortization of inventory fair value step-up (a)

Depreciation cost of goods sold

Research & development employee related cost

Research & development other (b)

Selling, general & administrative employee related cost

Selling, general & administrative other (c)

Provision for litigation

Acquisition-related costs

Other segment expenses (d)

Operating income

Interest income (expense)

FX transactional gain (loss)

Income before taxes

(a) Amounts primarily related to inventory step up associated with NuVasive Merger

(b) Amounts include In-Process Research & Development and other non-employee related costs

(d) Amounts include restructuring expense and credit losses

The following table represents total net sales, net by geographic area, based on the location of the customer for the three months ended March 31, 2025 and 2024, respectively :

Three Months Ended

(In thousands)

1 unchanged sentence

International

The following table represents total property and equipment, net by geographic area, based on the location of the customer:

The following table represents total property and equipment, net by geographic area, based on the location of the customer as of March 31, 2025 and 2024, respectively:

Property and Equipment, Net

September 30,

(In thousands)

1 unchanged sentence

International

SUBSEQUENT EVENTS

On February 6, 2025, the Company entered into an Agreement and Plan of Merger (the “Nevro Merger Agreement”) with Nevro Corp., a Delaware corporation (“Nevro”), and Palmer Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Palmer Merger Sub”).

The Nevro Merger Agreement provides, among other things, that subject to the satisfaction or waiver of the conditions set forth therein, Palmer Merger Sub merged with and into Nevro (the “Nevro Merger”), with Nevro surviving the merger as a wholly owned subsidiary of the Company.

Under the Nevro Merger Agreement, at the effective time of the Nevro Merger (the “Effective Time”), each share of common stock, par value $ 0.001 per share, of Nevro (“Nevro Common Stock”) issued and outstanding immediately prior to the Effective Time (other than certain excluded shares as described in the Nevro Merger Agreement) was cancelled and converted into the right to receive cash in an amount equal to $ 5.85 per share of Nevro Common Stock.

The transaction represented a total equity value of approximately $ 250 million.

On April 3, 2025, the Nevro Merger closed after the approval of Nevro’s shareholders and regulatory review.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements