GLOBUS MEDICAL INC 10-Q

Item 1. Financial Statements GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, (In thousands, except share and per share values) 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 229,446 $ 784,438 Short-term marketable securities — 105,619 Accounts receivable, net of allowances of $ 26,607 and $ 15,505 , respectively 611,565 557,697 Inventories 772,131 659,233 Prepaid expenses and other current assets 68,202 49,640 Income taxes receivable 48,558 20,633 Total current assets 1,729,902 2,177,260 Property and equipment, net of accumulated depreciation of $ 601,753 and $ 545,786 , respectively 587,505 561,909 Operating lease right of use assets 61,587 49,647 Long-term marketable securities — 66,134 Intangible assets, net 796,372 795,117 Goodwill 1,434,983 1,432,387 Other assets 74,843 75,096 Deferred income taxes 275,897 94,200 Total assets $ 4,961,089 $ 5,251,750 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 87,099 $ 75,118 Accrued expenses 281,747 260,591 Operating lease liabilities 13,179 10,249 Income taxes payable — 10,725 Senior convertible notes — 443,351 Business acquisition liabilities 18,619 33,739 Deferred revenue 24,020 22,140 Total current liabilities 424,664 855,913 Business acquisition liabilities, net of current portion 86,353 89,496 Operating lease liabilities 107,925 83,588 Deferred income taxes and other tax liabilities 24,402 23,889 Other liabilities 22,062 21,531 Total liabilities 665,406 1,074,417 Commitments and contingencies (Note 17) Equity: Class A common stock; $ 0.001 par value. Authorized 500,000,000 shares; issued and outstanding 112,620,208 and 114,990,219 shares at June 30, 2025 and December 31, 2024, respectively 113 115 Class B common stock; $ 0.001 par value. Authorized 275,000,000 shares; issued and outstanding 22,430,097 and 22,430,097 shares at June 30, 2025 and December 31, 2024, respectively 22 22 Additional paid-in capital 3,071,652 3,031,244 Accumulated other comprehensive income/(loss) 10,239 ( 6,861 ) Retained earnings 1,213,657 1,152,813 Total equity 4,295,683 4,177,333 Total liabilities and equity $ 4,961,089 $ 5,251,750 See accompanying notes to unaudited condensed consolidated financial statements. 3 GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, (In thousands, except per share amounts) 2025 2024 2025 2024 Net sales $ 745,342 $ 629,691 $ 1,343,463 $ 1,236,357 Cost of Sales and Operating expenses: Cost of sales (exclusive of amortization of intangibles) 248,765 260,040 444,162 501,527 Research and development 39,954 37,698 73,016 94,966 Selling, general and administrative 303,622 239,454 546,421 488,133 Amortization of intangibles 30,189 29,709 58,991 59,385 Acquisition-related costs 33,156 13,734 34,213 16,152 Restructuring costs 13,547 ( 566 ) 13,547 18,575 Operating income/(loss) 76,109 49,622 173,113 57,619 Other income/(expense), net Interest income/(expense), net 693 ( 2,335 ) 2,374 ( 4,229 ) Foreign currency transaction gain/(loss) 38 ( 703 ) 4,308 ( 16,074 ) Bargain purchase gain 110,561 — 110,561 — Other income/(expense) 772 997 1,485 1,707 Total other income/(expense), net 112,064 ( 2,041 ) 118,728 ( 18,596 ) Income/(loss) before income taxes 188,173 47,581 291,841 39,023 Income tax provision/(benefit) ( 14,673 ) 15,821 13,533 14,380 Net income/(loss) $ 202,846 $ 31,760 $ 278,308 $ 24,643 Other comprehensive income/(loss), net of tax: Unrealized gain/(loss) on marketable securities 2 492 317 871 Foreign currency translation gain/(loss) 12,404 ( 1,298 ) 16,783 ( 2,530 ) Total other comprehensive income/(loss), net of tax 12,406 ( 806 ) 17,100 ( 1,659 ) Comprehensive income/(loss) $ 215,252 $ 30,954 $ 295,408 $ 22,984 Earnings per share: Basic $ 1.50 $ 0.23 $ 2.05 $ 0.18 Diluted $ 1.49 $ 0.23 $ 2.01 $ 0.18 Weighted average shares outstanding: Basic 135,205 135,195 135,981 135,276 Diluted 136,499 136,979 138,137 136,836 See accompanying notes to unaudited condensed consolidated financial statements. ‎ 4 GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) Class A ‎ Common Stock Class B ‎ Common Stock Additional paid-in Accumulated other comprehensive Retained (In thousands) Shares $ Shares $ capital income/(loss) earnings Total Balance at December 31, 2024 114,990 $ 115 22,430 $ 22 $ 3,031,244 $ ( 6,861 ) $ 1,152,813 $ 4,177,333 Stock-based compensation — — — — 13,324 — — 13,324 Grant of contingent restricted stock units — — — — 429 — — 429 Exercise of stock options 309 — — — 11,223 — — 11,223 Issuance of Class A common stock under employee and director equity option plans, net 72 — — — ( 2,293 ) — — ( 2,293 ) Comprehensive income/(loss) — — — — — 4,694 75,462 80,156 Repurchase and retirement of common stock ( 2,445 ) ( 2 ) — — — — ( 192,102 ) ( 192,104 ) Balance at March 31, 2025 112,926 $ 113 22,430 $ 22 $ 3,053,927 $ ( 2,167 ) $ 1,036,173 $ 4,088,068 Stock-based compensation — $ — — $ — $ 13,154 $ — $ — $ 13,154 Grant of contingent restricted stock units — — — — 249 — — 249 Exercise of stock options 77 — — — 4,697 — — 4,697 Issuance of Class A common stock under employee and director equity option plans, net 28 — — — ( 375 ) — — ( 375 ) Comprehensive income/(loss) — — — — — 12,406 202,846 215,252 Repurchase and retirement of common stock ( 411 ) — — — — — ( 25,362 ) ( 25,362 ) Balance at June 30, 2025 112,620 $ 113 22,430 $ 22 $ 3,071,652 $ 10,239 $ 1,213,657 $ 4,295,683 5 GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) Class A ‎ Common Stock Class B ‎ Common Stock Additional paid-in Accumulated other comprehensive Retained (In thousands) Shares $ Shares $ capital income/(loss) earnings Total Balance at December 31, 2023 113,906 $ 114 22,430 $ 22 $ 2,870,749 $ ( 10,192 ) $ 1,137,266 $ 3,997,959 Stock-based compensation — — — — 17,281 — — 17,281 Grant of contingent restricted stock units — — — — 336 — — 336 Exercise of stock options 112 — — — 3,413 — — 3,413 Issuance of Class A common stock under employee and director equity option plans, net 205 — — — ( 5,343 ) — — ( 5,343 ) Comprehensive income/(loss) — — — — — ( 853 ) ( 7,117 ) ( 7,970 ) Repurchase and retirement of common stock ( 1,597 ) ( 1 ) — — — — ( 83,314 ) ( 83,315 ) Balance at March 31, 2024 112,626 $ 113 22,430 $ 22 $ 2,886,436 $ ( 11,045 ) $ 1,046,835 $ 3,922,361 Stock-based compensation — — — — 12,844 — — 12,844 Grant of contingent restricted stock units — — — — 181 — — 181 Exercise of stock options 329 — — — 14,239 — — 14,239 Issuance of Class A common stock under employee and director equity option plans, net 3 — — — ( 91 ) — — ( 91 ) Comprehensive income/(loss) — — — — — ( 806 ) 31,760 30,954 Repurchase and retirement of common stock ( 30 ) — — — — — ( 4,123 ) ( 4,123 ) Balance at June 30, 2024 112,928 $ 113 22,430 $ 22 $ 2,913,609 $ ( 11,851 ) $ 1,074,472 $ 3,976,365 See accompanying notes to unaudited condensed consolidated financial statements. 6 GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, (In thousands) 2025 2024 Cash flows from operating activities: Net income $ 278,308 $ 24,643 Adjustments to reconcile net income to net cash provided by operating activities: Bargain purchase gain ( 110,561 ) — Acquired in-process research and development — 12,613 Depreciation and amortization 136,705 118,849 Amortization of premiums on marketable securities ( 421 ) ( 14 ) Provision for excess and obsolete inventory 10,933 10,498 Amortization of inventory fair value step-up 6,015 107,341 Amortization of 2025 Notes fair value step-up 6,658 13,315 Stock-based compensation expense 26,823 30,073 Allowance for expected credit losses 4,554 11,481 Change in fair value of business acquisition liabilities 5,389 12,739 Change in deferred income taxes ( 41,236 ) ( 65,275 ) (Gain)/loss on disposal of assets, net 6,131 464 Payment of business acquisition-related liabilities ( 15,764 ) ( 16,965 ) Net (gain)/loss from foreign currency adjustment ( 11,342 ) 6,558 (Increase) decrease in: Accounts receivable 20,395 ( 124,206 ) Inventories ( 11,722 ) ( 22,855 ) Prepaid expenses and other assets 852 ( 2,001 ) Increase (decrease) in: Accounts payable ( 4,085 ) 11,561 Accrued expenses and other liabilities ( 13,841 ) ( 28,951 ) Income taxes payable/receivable ( 38,626 ) 6,777 Net cash provided by/(used in) operating activities 255,165 106,645 Cash flows from investing activities: Purchases of marketable securities ( 1,750 ) ( 12,174 ) Maturities of marketable securities 58,630 21,709 Sales of marketable securities 115,608 7,404 Purchases of property and equipment ( 82,665 ) ( 56,366 ) Acquisition of businesses, net of cash acquired and purchases of intangible and other assets ( 252,546 ) ( 17,535 ) Acquisition of intangible assets ( 5,000 ) — Proceeds from credit facility 20,000 — Repayment of borrowings from credit facility ( 20,000 ) — Net cash provided by/(used in) investing activities ( 167,723 ) ( 56,962 ) Cash flows from financing activities: Payment of business acquisition-related liabilities ( 7,864 ) ( 33,921 ) Net proceeds from exercise of stock options 15,920 17,651 Payments related to tax withholdings for share-based compensation ( 2,953 ) ( 5,955 ) Repurchase of common stock ( 215,451 ) ( 84,787 ) Repayment of senior convertible notes ( 449,985 ) — Net cash provided by/(used in) financing activities ( 660,333 ) ( 107,012 ) Effect of foreign exchange rates on cash 17,899 461 Net increase/(decrease) in cash and cash equivalents ( 554,992 ) ( 56,868 ) Cash and cash equivalents at beginning of period 784,438 467,292 Cash and cash equivalents at end of period $ 229,446 $ 410,424 Supplemental disclosures of cash flow information: Income taxes paid, net $ 93,226 $ 71,586 Non-cash investing and financing activities: Accrued purchases of property and equipment $ 13,454 $ 9,508 See accompanying notes to unaudited condensed consolidated financial statements. 7 GLOBUS MEDICAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (Unaudited) NOTE 1. BACKGROUND (a) The Company Globus Medical, Inc., together with its majority-owned or controlled subsidiaries, is a medical device company that develops and commercializes healthcare solutions with a mission to improve the quality of life of patients with musculoskeletal disorders. We are primarily focused on implants that promote healing in patients with musculoskeletal disorders, including the use of a robotic guidance and navigation system and products to treat patients who have experienced orthopedic traumas. We are an engineering-driven company with a history of rapidly developing and commercializing advanced products and procedures to assist surgeons in effectively treating their patients and to address new treatment options. With numerous products launched since the founding of the Company, we offer a comprehensive portfolio of innovative and differentiated technologies that address a variety of musculoskeletal pathologies, anatomies, and surgical approaches. We are headquartered in Audubon, Pennsylvania, and market and sell our products through our exclusive sales force in the United States (“U.S.”), as well as within North, Central & South America, Europe, Asia, Africa and Australia. We sell our products in the U.S. through a sales force comprised primarily of directly-employed and independent sales representatives. Our international sales force is comprised of directly-employed sales personnel, independent sales representatives, as well as exclusive and non-exclusive independent third-party distributors. The terms the “Company,” “Globus,” “we,” “us” and “our” refer to Globus Medical, Inc. and, where applicable, our consolidated subsidiaries. ( b) Nevro Merger As previously announced, on February 6, 2025, the Company entered into an Agreement and Plan of Merger (the “Nevro Merger Agreement”) with Nevro Corp., (“Nevro”) and Palmer Merger Sub, Inc., a wholly owned subsidiary of the Company (“Palmer Merger Sub”). On April 3, 2025, pursuant to the terms of the Nevro Merger Agreement, Palmer Merger Sub merged with and into Nevro (the “Nevro Merger”), with Nevro surviving as a wholly owned subsidiary of the Company. Upon the consummation of the Nevro Merger, each issued and outstanding share of common stock of Nevro, $ 0.001 par value per share, was cancelled and converted into the right to receive cash in an amount equal to $ 5.85 per share of Nevro Common Stock, without interest and subject to any applicable withholding taxes. Refer to Note 3, Asset Acquisitions and Business Combinations for further information. Globus was deemed to be the accounting acquirer of Nevro for accounting purposes under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Accordingly, prior periods within these condensed consolidated financial statements may not be comparable. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation 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. 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 (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 June 30, 2025, and results of operations for the three and six months ended June 30, 2025. The results of operations for any interim period may not be indicative of results for the full year. (b) Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Globus and its majority-owned or controlled subsidiaries. All intercompany balances and transactions are eliminated in consolidation. 8 Variable Interest Entities We provide intraoperative neuromonitoring (“IONM”) services through various majority-owned or controlled subsidiaries, which collectively conduct business as NuVasive Clinical Services. In providing IONM services to surgeons and healthcare facilities across the U.S., the Company maintains contractual relationships with several physician practices (“PCs”). In accordance with authoritative guidance, the Company has determined that the PCs are variable interest entities and therefore, the accompanying consolidated financial statements include the accounts of the PCs from the date of acquisition. During the periods presented, the results of the PCs were immaterial to the Company’s financial statements. The creditors of the PCs have claims only to the assets of the PCs, which are not material, and the assets of the PCs are not available to the Company. (c) Use of Estimates 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. We base our estimates, in part, on historical experience that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the condensed consolidated financial statements in the period they are determined to be necessary. Significant areas that require estimates include revenue recognition, intangible assets, business acquisition liabilities, allowance for expected credit losses, stock-based compensation, reserves for excess and obsolete inventory, fair value measurements, useful lives of assets, the outcome of litigation, recoverability of intangible assets and income taxes. We are subject to risks and uncertainties due to changes in the healthcare environment, regulatory oversight, competition, and legislation that may cause actual results to differ from estimated results. (d) Revenue Recognition In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. The principles in ASC 606 are applied using the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligation(s). Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. For purposes of disclosure, we disaggregate our revenue into two categories, Musculoskeletal Solutions and Enabling Technologies. Our Musculoskeletal Solutions products consist primarily of the implantable devices, disposables, unique instruments, and neuromonitoring services, used in an expansive range of spine, orthopedic trauma, hip, knee and extremity procedures. The majority of our Musculoskeletal Solutions contracts have a single performance obligation and revenue is recognized at a point in time. For our IONM services, revenue is recognized in the period the service is performed, which can be either at a point in time or over time, depending on how the performance obligation is defined for the amount of consideration expected to be received. Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of sales. Our Enabling Technologies products are advanced hardware and software systems, and related technologies, that are designed to enhance a surgeon’s capabilities and streamline surgical procedures by making them less invasive, more accurate, and more reproducible to improve patient care. 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 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. Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of sales. 9 Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Deferred revenue is comprised mainly of unearned revenue related to the sales of certain Enabling Technologies products, which includes maintenance and support services. Maintenance and support services are generally invoiced annually, at the beginning of each contract period, and revenue is recognized ratably over the maintenance period . The changes to contract liabilities related to deferred revenue are as follows: Six Months Ended June 30, (In thousands) 2025 Beginning contract liabilities $ 31,809 Revenue recognized from contract liabilities ( 16,513 ) Advance consideration received during the period 19,011 Ending contract liabilities $ 34,307 (e) Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at acquisition date to be cash equivalents. Cash equivalents, which consist of money market accounts, commercial paper, government securities, and corporate debt securities are stated at fair value. (f) Marketable Securities Our marketable securities include municipal bonds, corporate debt securities, commercial paper, asset-backed securities, securities of government, federal agency, and other sovereign obligations . As of June 30, 2025, we have no marketable securities outstanding. 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 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. Realized gains or losses from the sale of marketable securities are determined on a specific identification basis. Realized gains and losses, interest income and the amortization/accretion of premiums/discounts are included as a component of other income/(expense), net, on our condensed consolidated statements of operations and comprehensive income. Interest receivable is recorded as a component of prepaid expenses and other current assets on our condensed consolidated balance sheets. We invest in securities that meet or exceed standards as defined in our investment policy. Our policy also limits the amount of credit exposure to any one issue, issuer or type of security. We review declines in the fair value of our securities to determine whether they are resulting from expected credit losses or other factors. If the assessment indicates a credit loss exists, we recognize any measured impairment as an allowance for credit loss in our condensed consolidated statements of operations. Any other impairments not recorded through allowance for credit losses is recognized in our other comprehensive income. (g) Fair Value Measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or the liability in an orderly transaction between market participants on the measurement date. Additionally, a fair value hierarchy was established that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our assets and liabilities measured at fair value on a recurring basis are classified and disclosed in one of the following three categories: Level 1—quoted prices (unadjusted) in active markets for identical assets and liabilities; Level 2—observable inputs other than quoted prices in active markets for identical assets and liabilities; and 10 Level 3—unobservable inputs in which there is little or no market data available, which require the reporting entity to use significant unobservable inputs or valuation techniques. Contingent consideration represents contingent milestone, performance and revenue-sharing payment obligations related to acquisitions and is measured at fair value, based on significant inputs that are not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions we believe would be made by a market participant. We assess these assumptions on an ongoing basis as additional data impacting the assumptions is obtained. The fair value of contingent consideration is recorded in business acquisition liabilities on our condensed consolidated balance sheets, and changes in the fair value of contingent consideration are recognized in acquisition-related costs in the condensed consolidated statements of operations and comprehensive income. The fair value of contingent restricted stock unit grants (“RSUs”) is recorded as additional paid-in capital in the consolidated balance sheet on the day of the grant due to the remote likelihood of forfeiture. The purchase price of business acquisitions is primarily allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the excess recorded as goodwill. We utilize Level 3 inputs in the determination of the initial fair value. (h) Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. 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. When quantities on hand exceed estimated sales forecasts, we record a write-down for such excess inventories. Once inventory has been written down, it creates a new cost basis for inventory that is not subsequently written up. (i) Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the fair values of the identifiable assets acquired less the liabilities assumed in the acquisition of a business. Goodwill is tested for impairment at least annually or whenever events or circumstances indicate that a carrying amount may not be recoverable. Goodwill is tested for impairment at the reporting unit level by comparing the reporting unit’s carrying amount to the estimated fair value of the reporting unit. Fair values are estimated using an income and discounted cash flow approach. We perform our annual impairment test of goodwill in the fourth quarter of each year. We consider qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill. Intangible assets consist of purchased developed technology, trade names, customer relationships, in-process research and development (“IPR&D”), supplier network, patents, re-acquired rights, and non-compete agreements. Intangible assets with finite useful lives are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from 1 to 21 years. Intangible assets with finite useful lives are tested whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. If an impairment is indicated, we measure the amount of the impairment loss as the amount by which the carrying amount exceeds the fair value of the asset. Fair value is generally determined using a discounted future cash flow analysis. IPR&D has an indefinite life and is not amortized until completion of the project at which time the IPR&D becomes an amortizable asset. Intangible assets with indefinite useful lives are tested for impairment annually or whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. 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 six months ended June 30, 2025, there were no impairments in goodwill, finite-lived intangible assets, or IPR&D. (j) Stock -Based Compensation The cost of employee and non-employee director awards is measured at the grant date fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the equity award. Expense for performance-based restricted stock units is recognized when the performance condition is deemed to be probable. Compensation expense for awards includes the impact of forfeiture in the period when they occur. 11 We estimate the fair value of stock options utilizing the Black-Scholes option-pricing model. Inputs to the Black-Scholes model include our stock price, expected volatility, expected term, risk-free interest rate and expected dividends. Expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the Company’s stock options offering period which is derived from historical experience. The risk-free interest rate assumption is based on observed interest rates of U.S. Treasury securities appropriate for the expected terms of the stock options. The dividend yield assumption is based on the history and expectation of no dividend payouts. 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 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. The fair value of equity instruments that are expected to vest is recognized and amortized over the requisite service period. The Company has granted awards with up to five-year graded or cliff vesting terms (in each case, with service through the date of vesting being required). No exercise price or other monetary payment is required for receipt of the shares issued in settlement of the respective award; instead, consideration is furnished in the form of the participant’s service to the Company. The fair value of RSUs including PRSUs with pre-defined performance criteria is based on the stock price on the date of grant whereas the expense for PRSUs with pre-defined performance criteria is adjusted with the probability of achievement of such performance criteria at each period end. (k) Derivative Financial Instruments The Company recognizes all derivative instruments as assets or liabilities in its unaudited condensed consolidated balance sheets and measures these instruments at fair value by revaluing these assets and liabilities at the end of each reporting period. Gains and losses are recorded as a component of other expense, net in the unaudited condensed consolidated statements of operations and comprehensive income. The effects of these derivative instruments are immaterial to the Company’s financial statements. (l) Other Comprehensive Income (Loss) Other comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive income (loss) includes net of tax, unrealized gains or losses on the Company’s marketable debt securities and foreign currency translation adjustments. (m) Acquisition-Related Costs The Company incurs certain costs related to acquisition, which include severance, investment banking fees, legal fees, consulting fees, leasehold exit costs, costs related to the Nevro Merger, third-party acquisition costs and contingent consideration fair value adjustments and other costs directly associated with such activities. Contingent consideration is accrued based on the fair value of the expected payment, and such accruals are subject to increase or decrease based on the assessment of the likelihood that the contingent milestones will be achieved resulting in payment. If an accrual for contingent consideration decreases based upon the assessment during a particular period, it results in a reduction of costs during such period, which the Company records as a benefit. (n) Restructuring Costs Restructuring costs represent costs associated with the Company’s 2024 Synergy Plan and 2025 Strategic Integration Plan. These plans were 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. (o) Accounts Receivable and Related Valuation Accounts Accounts receivable in the accompanying unaudited condensed consolidated balance sheets are presented net of allowances for expected credit losses. We maintain an allowance for expected credit losses resulting from the inability of its customers, including hospitals, ambulatory surgery centers, and distributors, to make required payments. The allowance for credit losses is calculated quarterly and is estimated on a region-by-region basis considering a number of factors including age of account balances, collection history, historical account write-offs, third-party credit reports, identified trends, current economic conditions, and supportable forecasted economic expectations. The allowance is adjusted on a specific identification basis for certain accounts as well as pooling of accounts with similar characteristics. 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 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. 12 (p) Recently Issued Accounting Pronouncements 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. 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. 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. 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. The Company will adopt ASU No. 2023-09 in our Annual Report on Form 10-K for the year ending December 31, 2025. (q) Recently Adopted Accounting Pronouncements In November 2023, the FASB, issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures , to improve reportable segment disclosure requirements. 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. The Company adopted ASU No. 2023-07 as of January 1, 2024 and the amendment was applied retrospectively. 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. 2022-03 , Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions , which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU introduces new disclosure requirements to provide investors with information about contractual restrictions, including the nature and remaining duration of such restrictions. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The amendments should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. The Company adopted ASU No. 2022-03 as of January 1, 2024. The adoption did not have any material impact on the Company’s consolidated financial statements. NOTE 3. 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. The fair value of the assets acquired are concentrated in a similar identified asset, IPR&D of the acquired technology, thus satisfying the requirements of the screen test in ASC 805, Business Combinations . At the date of the acquisition, the Company determined that the development of the projects underway had not yet reached technological feasibility and that the research in process had no alternative future use. Accordingly, the acquired IPR&D of $ 12.6 million was charged to research and development expense in the condensed consolidated statements of operations and comprehensive income. The purchase price consisted of $ 12.0 million of cash paid at closing. 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. As of June 30, 2025, the milestones have not been met and as such, contingent consideration has no t been recorded in this asset acquisition. 13 Business Combinations During the third 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 $ 0.1 million of cash paid at closing and $ 1.6 million in contingent consideration payments, resulting in goodwill of $ 1.7 million based on the estimated fair values. The contingent payments for this acquisition are based upon achieving various performance milestones over a period of five years and are payable in cash. During the second 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 $ 0.1 million of cash paid at closing and $ 1.9 million in contingent consideration payments, resulting in goodwill of $ 2.0 million based on the estimated fair values. The contingent payments for this acquisition are based upon achieving various performance milestones over a period of five years and are payable in cash. 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. NuVasive Merger 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 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. Nevro Merger As previously announced, on February 6, 2025, the Company entered into the Merger Agreement with Nevro and Palmer Merger Sub. On April 3, 2025, pursuant to the terms of the Nevro Merger Agreement, Palmer Merger Sub merged with and into Nevro, with Nevro surviving as a wholly owned subsidiary of the Company. At the consummation of the Nevro Merger, each issued and outstanding share of common stock of Nevro, $ 0.001 par value per share, was converted into cash in an amount equal to $ 5.85 per share of Nevro Common stock. As part of the Nevro Merger, the Company cash settled equity awards for all outstanding Nevro RSUs and performance stock units (“PSUs”) in accordance with the terms of the Merger Agreement. Of the total consideration for the cash settled equity awards, $ 9.5 million was allocated to the purchase price and $ 15.1 million was deemed compensatory as it was attributable to post acquisition vesting and was expensed on the acquisition date due to cash settlement. Concurrently with the Nevro Merger, the Nevro Braidwell Term Loans and Braidwell Warrants were paid off, with Globus funding $ 18.5 million of this repayment, which we have determined to be included within the aggregate consideration. The aggregate consideration in connection with the closing of the Merger was as follows: (In thousands, except share and per share values) Nevro shares outstanding as of April 3, 2025 38,383 Price paid per share $ 5.85 Total consideration paid for outstanding Nevro Common stock $ 224,538 Repayment of Braidwell Term Loans, Warrants, and other Nevro transaction costs 18,515 Fair value of cash settled equity awards 9,493 Total purchase price $ 252,546 14 We accounted for the Nevro Merger using the acquisition method of accounting, which requires Nevro’s assets and liabilities to be recorded on our balance sheet at fair value as of the acquisition date. We will complete a final determination of the fair value of certain assets and liabilities within the one-year measurement period from the date of the acquisition as required by FASB ASC Topic 805, “Business Combinations”. The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, valuations, and assumptions that are subject to change as the Company obtains additional information during the measurement period. The following table summarizes the preliminary purchase price allocation for the Nevro Merger as of April 3, 2025: (In thousands) Preliminary Purchase Price Allocation as of April 3, 2025 Current assets (excluding accounts receivable and inventories) $ 10,328 Accounts receivable 70,754 Inventories 115,416 Property and equipment 29,051 Operating lease right of use assets 12,269 Intangible assets 53,600 Other long-term assets 4,223 Deferred income taxes 141,510 Total Assets $ 437,150 Current Liabilities (excluding operating lease liabilities) $ 46,880 Operating lease liabilities, including current portion 27,163 Total liabilities $ 74,043 Fair value of acquired identifiable assets and liabilities $ 363,107 Less: Purchase price $ 252,546 Bargain purchase gain $ 110,561 The excess fair value of the net assets acquired over the purchase price resulted in the recognition of a bargain purchase gain and was recorded in the bargain purchase gain on the condensed consolidated statements of operations and comprehensive income. The gain on bargain purchase occurred primarily due to the recognition of the deferred tax assets. The deferred tax assets were comprised primarily of pre-acquisition federal net operating loss carryforwards with an indefinite carryforward period. The majority of the bargain purchase gain is non-taxable for tax purposes. During the three months ended June 30, 2025, total transaction costs incurred in connection with the Nevro Merger were $ 28.8 million. These transaction costs were recognized as acquisition related costs in the condensed consolidated statements of operations and comprehensive income. Details of our valuation methodology and significant inputs for fair value measurements are included below. The fair value measurements for property and equipment and intangible assets are based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements. The preliminary 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 preliminary 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 Nevro’s closing balance sheet. The preliminary 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. These estimates and assumptions are subject to change within the measurement period, which is up to 12 months after the acquisition date. The allocation of the purchase price for this acquisition has been prepared on a preliminary basis and changes to the allocation of certain assets and liabilities may occur as additional information becomes available. The primary component of the purchase price that is not yet finalized is related to income taxes and the recognition of deferred tax assets. 15 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 Nevro’s identifiable intangible assets acquired and their remaining amortization period (in years): Fair Value as of (In thousands) June 30, 2025 Useful Life Developed Technology $ 36,500 8 Customer Relationships 8,800 10 Tradenames 8,300 15 Nevro’s results have been included in the Company’s financial statements for the period subsequent to the date of the acquisition on April 3, 2025. Nevro contributed revenues and net loss of $ 94.6 million and $ 50.0 million, respectively, for the period from April 3, 2025, to June 30, 2025. NOTE 4. NET SALES The following table represents net sales by product category for the three and six months ended June 30, 2025 and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Musculoskeletal Solutions $ 710,182 $ 592,913 $ 1,286,115 $ 1,167,610 Enabling Technologies 35,160 36,778 57,348 68,747 Total net sales $ 745,342 $ 629,691 $ 1,343,463 $ 1,236,357 NOTE 5. MARKETABLE SECURITIES As of June 30, 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 (In thousands) Amortized ‎ Cost Gross ‎ Unrealized ‎ Gains Gross ‎ Unrealized ‎ Losses Fair ‎ Value Short-term: Municipal bonds $ 8,990 $ 8 $ ( 25 ) $ 8,973 Corporate debt securities 29,596 1 ( 62 ) 29,535 Commercial paper 36,527 4 ( 1 ) 36,530 Government, federal agency, and other sovereign obligations 30,676 4 ( 99 ) 30,581 Total short-term marketable securities $ 105,789 $ 17 $ ( 187 ) $ 105,619 Long-term: Municipal bonds $ 6,538 $ — $ ( 13 ) $ 6,525 Corporate debt securities 25,382 4 ( 115 ) 25,271 Asset-backed securities 19,690 2 ( 71 ) 19,621 Government, federal agency, and other sovereign obligations 14,772 2 ( 57 ) 14,717 Total long-term marketable securities $ 66,382 $ 8 $ ( 256 ) $ 66,134 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 December 31, 2024, respectively. 16 NOTE 6. FAIR VALUE MEASUREMENTS The following table represents the fair value of assets and liabilities, as of June 30, 2025 and December 31, 2024, respectively, including the following: (In thousands) Balance at ‎ June 30, ‎ 2025 Level 1 Level 2 Level 3 Assets: Cash equivalents $ 34,085 $ 34,085 $ — $ — Liabilities: Business acquisition liabilities 104,972 — — 104,972 (In thousands) Balance at ‎ December 31, ‎ 2024 Level 1 Level 2 Level 3 Assets: Cash equivalents $ 496,676 $ 423,977 $ 72,699 $ — Municipal bonds 15,498 — 15,498 — Corporate debt securities 54,806 — 54,806 — Commercial paper 36,530 — 36,530 Asset-backed securities 19,621 — 19,621 — Government, federal agency, and other sovereign obligations 45,298 — 45,298 — 2025 Hedge 22 — 22 — Liabilities: Senior Convertible Notes due 2025 443,003 443,003 — — Bifurcated Conversion Option of the Senior Convertible Notes due 2025 22 — 22 — Business acquisition liabilities 123,235 — — 123,235 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. Fair value of the revenue-based business acquisition liabilities was determined using a discounted cash flow model, probability model, and an option pricing methodology. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility and discount rates, market price risk adjustment, projections associated with the applicable milestone, the interest rate, and the related probabilities and payment structure in the contingent consideration arrangement. The following are the significant unobservable inputs used in the two valuation techniques: Unobservable input Range Weighted Average* Revenue risk premium 1.8 % - 5.8 % 2.7 % Revenue volatility 14.0 % - 15.8 % 14.2 % Discount rate 5.1 % - 8.5 % 5.5 % Projected year of payment 2025 - 2034 * The weighted average rates were calculated based on the relative fair value of each business acquisition liability. 17 The change in the carrying value of the business acquisition liabilities during the three and six months ended June 30, 2025 and 2024, respectively, included the following: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Beginning balance $ 118,055 $ 111,310 $ 123,235 $ 139,358 Purchase price contingent consideration — 1,923 — 21,066 Changes resulting from foreign currency fluctuations ( 252 ) 3 ( 252 ) 246 Contingent cash payments ( 17,725 ) ( 4,296 ) ( 23,628 ) ( 50,886 ) Contingent RSU grants ( 249 ) ( 181 ) ( 677 ) ( 517 ) Changes in fair value of business acquisition liabilities 5,222 12,898 5,389 12,739 Contractual payable reclassification ( 79 ) ( 325 ) 905 ( 674 ) Ending balance $ 104,972 $ 121,332 $ 104,972 $ 121,332 Changes in the fair value of business acquisition liabilities are driven by changes in market conditions and the achievement of certain performance conditions. NOTE 7. INVENTORIES Inventories included the following as of June 30, 2025 and December 31, 2024, respectively: June 30, December 31, (In thousands) 2025 2024 Raw materials $ 153,311 $ 121,984 Work in process 60,448 45,775 Finished goods 558,372 491,474 Total inventories $ 772,131 $ 659,233 As part of the Nevro Merger, a step up in the value of inventory of $ 17.9 million was recorded, which was composed of $ 2.7 million for work in process and $ 15.2 million for finished goods. The amortization of the inventory step up recorded in product cost of sales was $ 6.0 million for the three months ended June 30, 2025. As of June 30, 2025, the total remaining balance of inventory step up was $ 11.9 million. During the three months ended June 30, 2025 and 2024, net adjustments to cost of sales related to excess and obsolete inventory were $ 5.0 million and $ 6.6 million, respectively. The net adjustments for the three months ended June 30, 2025 and 2024 reflect a combination of additional expense for excess and obsolete related provisions ($ 9.5 million and $ 8.6 million, respectively) offset by sales and disposals ($ 4.5 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 six months ended June 30, 2025 and 2024, net adjustments to cost of sales related to excess and obsolete inventory were $ 10.9 million and $ 10.5 million, respectively. The net adjustments for the six months ended June 30, 2025 and 2024 reflect a combination of additional expense for excess and obsolete related provisions ($ 19.6 million and $ 13.8 million, respectively) offset by sales and disposals ($ 8.7 million and $ 3.3 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods. 18 NOTE 8. PROPERTY AND EQUIPMENT Property and equipment included the following as of June 30, 2025 and December 31, 2024, respectively: Useful June 30, December 31, (In thousands) Life 2025 2024 Land — $ 9,765 $ 9,731 Buildings and improvements 31.5 119,793 100,128 Equipment 5 - 15 234,958 215,100 Instruments, modules, and cases 5 764,645 741,125 Other property and equipment 3 - 5 60,097 41,611 1,189,258 1,107,695 Less: accumulated depreciation and amortization ( 601,753 ) ( 545,786 ) Total $ 587,505 $ 561,909 Instruments are hand-held devices used by surgeons to install implants during surgery. Modules and cases are used to store and transport the instruments and implants. Depreciation expense related to property and equipment was as follows during the three and six months ended June 30, 2025 and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Depreciation $ 40,442 $ 33,880 $ 77,713 $ 59,464 NOTE 9. GOODWILL AND INTANGIBLE ASSETS The change in the carrying amount of goodwill during the twelve months ended December 31, 2024 and the six months ended June 30, 2025, respectively, included the following: (In thousands) December 31, 2023 $ 1,434,540 Additions and adjustments ( 550 ) Foreign exchange ( 1,603 ) December 31, 2024 1,432,387 Foreign exchange 2,596 June 30, 2025 $ 1,434,983 Intangible assets as of June 30, 2025 included the following: June 30, 2025 (In thousands) Weighted ‎ Average ‎ Amortization ‎ Period ‎ (in years) Gross ‎ Carrying ‎ Amount Accumulated ‎ Amortization Intangible ‎ Assets, ‎ net Customer relationships & other intangibles 10.5 $ 365,812 $ ( 103,998 ) $ 261,814 Developed technology 8.0 720,569 ( 203,972 ) 516,597 Patents 14.1 14,560 ( 5,825 ) 8,735 Trade Names 15.3 9,834 ( 608 ) 9,226 Total intangible assets $ 1,110,775 $ ( 314,403 ) $ 796,372 19 Intangible assets as of December 31, 2024 included the following: December 31, 2024 (In thousands) Weighted ‎ Average ‎ Amortization ‎ Period ‎ (in years) Gross ‎ Carrying ‎ Amount Accumulated ‎ Amortization Intangible ‎ Assets, ‎ net Customer relationships & other intangibles 10.6 $ 354,192 $ ( 87,725 ) $ 266,467 Developed technology 8.0 681,477 ( 157,889 ) 523,588 Patents 16.1 9,023 ( 5,057 ) 3,966 Trade Names 16.7 1,535 ( 439 ) 1,096 Total intangible assets $ 1,046,227 $ ( 251,110 ) $ 795,117 The following table summarizes amortization of intangible assets for future periods as of June 30, 2025 : (In thousands) Annual ‎ Amortization 2025 $ 58,565 2026 115,256 2027 114,145 2028 110,648 Thereafter 397,758 Total $ 796,372 NOTE 10. ACCRUED EXPENSES Accrued expenses as of June 30, 2025 and December 31, 2024, respectively, included the following: June 30, December 31, (In thousands) 2025 2024 Compensation and other employee-related costs $ 155,737 $ 151,819 Legal and other settlements and expenses 7,689 6,746 Accrued non-income taxes 38,860 34,088 Royalties 9,065 10,612 Rebates 38,199 33,105 Other 32,197 24,221 Total accrued expenses $ 281,747 $ 260,591 NOTE 11. DEBT Line of Credit In September 2023, we entered into an unsecured credit agreement with U.S. Bank National Association, as administrative agent, Citizens Bank, N.A., as syndication agent, Royal Bank of Canada, as documentation agent, U.S. Bank National Association and Citizens Bank, N.A., as joint lead arrangers and joint book runners, and the other lenders referred to therein (the “September 2023 Credit Agreement”) that provides a revolving credit facility permitting borrowings up to $ 400.0 million and has a termination date of September 27, 2028 . We may request an increase in the revolving commitments in an aggregate amount not to exceed (i) $ 200 million or (ii) so long as the Leverage Ratio (as defined in the September 2023 Credit Agreement) is at least 0.25 to 1.00 less than the applicable Leverage Ratio then required under the September 2023 Credit Agreement, an unlimited amount. Revolving Loans under the September 2023 Credit Agreement bear interest at either a base rate or the Term SOFR Rate (as defined in the September 2023 Credit Agreement) plus, in each case, an applicable margin, as determined in accordance with the provisions of the September 2023 Credit Agreement. The Applicable Margin ranges from 0.125 % to 0.625 % for the Base Rate (as defined in the September 2023 Credit Agreement) and 1.125 % to 1.625 % for the Term SOFR Rate. We may also request Swingline Loans (as defined in the September 2023 Credit Agreement) at either the Base Rate or the Daily Term SOFR Rate. The September 2023 Credit Agreement is guaranteed by certain direct or indirect wholly owned subsidiaries of the Company. The September 2023 Credit Agreement contains financial and other customary covenants, including a funded net indebtedness to adjusted EBITDA ratio. As of June 30, 2025, we have no outstanding borrowings under the September 2023 Credit Agreement and we were in compliance with all covenants. 20 0.375% Senior Convertible Notes due 2025 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 Notes was paid off, net of an immaterial number of converted units that were settled in cash. There were no Convertible Senior Notes as of June 30, 2025. There was no interest expense and $ 7.1 million of interest expense recognized on the 2025 Notes for the three months ended June 30, 2025 and 2024 respectively. During the six months ended June 30, 2025 and 2024, interest expense recognized on the 2025 Notes was $ 6.9 million and $ 14.2 million respectively. 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 the Company’s 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 were entitled to purchase up to 3,617,955 shares of the Company’s common stock at a strike price of $ 170.45 , of which, 3,075,210 shares are still outstanding. The 2025 Warrants will expire on various dates from July 2025 through October 2025 and may be settled in net shares or cash, at the Company’s election. In accordance with ASC 805, the Company recognized the 2025 Warrants at an acquisition date fair value of $ 0.6 million within additional paid-in capital. The 2025 Warrants could have a dilutive effect on the Company’s earnings per share to the extent that the price of the Company’s common stock during a given measurement period exceeds the strike price of the 2025 Warrants, which is $ 170.45 per share. The Company uses the treasury share method for assumed exercise of its 2025 Warrants to compute the weighted average common shares outstanding for diluted earnings per share. NOTE 12. EQUITY Share Repurchases On March 11, 2020, the Company announced a share repurchase program, which authorized the Company to repurchase up to $ 200.0 million of the Company’s Class A common stock (“Class A Common”). On March 4, 2022, the share repurchase program was expanded by authorizing the Company to repurchase an additional $ 200.0 million of the Company’s Class A Common. On September 27, 2023, the share repurchase program was expanded by authorizing the Company to repurchase an additional $ 350.0 million of the Company’s Class A Common. On May 15, 2025, the share repurchase program was expanded by authorizing the Company to repurchase an additional $ 500.0 million of the Company’s Class A Common. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. The Company repurchased 0.4 million and 2.8 million shares under this program at an average price of $ 60.81 and $ 75.45 , respectively, for a total of $ 25.0 million and $ 215.4 million during the three and six months ended June 30, 2025. 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. The value of the retired shares includes the 1% excise tax accrual as a result of the Inflation Reduction Act of 2022. The Company made an accounting policy election to charge the excess of repurchase price over par value entirely to retained earnings. Common Stock Our amended and restated Certificate of Incorporation provides for a total of 775,000,000 authorized shares of common stock. Of the authorized number of shares of common stock, 500,000,000 shares are designated as Class A Common, and 275,000,000 shares are designated as the Company’s Class B common stock (“Class B Common”). The holders of Class A Common are entitled to one vote for each share of Class A Common held. The holders of Class B Common are entitled to 10 votes for each share of Class B Common held. Each share of our Class B Common is convertible at any time at the option of the holder into one share of our Class A Common. In addition, each share of our Class B Common will convert automatically into one share of our Class A Common upon any transfer, whether or not for value, except for permitted transfers. For more details relating to the conversion of our Class B Common please see “Exhibit 4.2, Description of Securities of the Registrant” filed with our Annual Report on Form 10-K on February 20, 2025. The holders of Class A Common and Class B Common vote together as one class of common stock. Except for voting rights, the Class A Common and Class B Common have the same rights and privileges. 21 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 June 30, 2025 and 2024, respectively: (In thousands) Unrealized loss on marketable securities, net of tax Foreign currency translation adjustments Accumulated other comprehensive loss Accumulated other comprehensive income/(loss), net of tax, at December 31, 2024 $ ( 317 ) $ ( 6,544 ) $ ( 6,861 ) Other comprehensive income/(loss) before reclassifications 315 16,783 17,098 Amounts reclassified from accumulated other comprehensive income/(loss), net of tax 2 — 2 Other comprehensive income/(loss), net of tax 317 16,783 17,100 Accumulated other comprehensive income/(loss), net of tax, at June 30, 2025 $ — $ 10,239 $ 10,239 (In thousands) Unrealized loss on marketable securities, net of tax Foreign currency translation adjustments Accumulated other comprehensive loss Accumulated other comprehensive income/(loss), net of tax, at December 31, 2023 $ ( 1,862 ) $ ( 8,330 ) $ ( 10,192 ) Other comprehensive income/(loss) before reclassifications 1,133 ( 2,530 ) ( 1,397 ) Amounts reclassified from accumulated other comprehensive income/(loss), net of tax ( 262 ) — ( 262 ) Other comprehensive income/(loss), net of tax 871 ( 2,530 ) ( 1,659 ) Accumulated other comprehensive income/(loss), net of tax, at June 30, 2024 $ ( 991 ) $ ( 10,860 ) $ ( 11,851 ) 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. Earnings Per Common Share The Company computes basic earnings per share using the weighted-average number of common shares outstanding during the period. Diluted earnings per share assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive. For purposes of this calculation, common stock equivalents include the Company’s stock options, unvested RSUs, and PRSUs. 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. 22 The following table sets forth the computation of basic and diluted earnings per share for the three and six month ended June 30, 2025 and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, (In thousands, except per share amounts) 2025 2024 2025 2024 Numerator: Net income/(loss) for basic $ 202,846 $ 31,760 $ 278,308 $ 24,643 Denominator for basic and diluted net income per share: Weighted average shares outstanding for basic 135,205 135,195 135,981 135,276 Dilutive stock options, RSUs, and PRSUs 1,294 1,784 2,156 1,559 Weighted average shares outstanding for diluted 136,499 136,979 138,137 136,836 Earnings per share: Basic $ 1.50 $ 0.23 $ 2.05 $ 0.18 Diluted $ 1.49 $ 0.23 $ 2.01 $ 0.18 Anti-dilutive stock options and RSUs excluded from the calculation 6,803 7,809 4,926 7,635 Anti-dilutive warrants excluded from the calculation 3,075 3,618 3,075 7,236 Anti-dilutive Senior Convertible Notes due 2025 excluded from the calculation — 3,618 — 7,236 Total $ 9,878 $ 15,045 $ 8,001 $ 22,107 NOTE 13. STOCK-BASED AWARDS We have four stock plans: 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 and 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. The 2012 Plan, 2021 Plan, and Ellipse 2015 Plan are administered by the Board of Directors of Globus (the “Board”) or its delegates. The number, type of option, exercise price, and vesting terms are determined by the Board or its delegates in accordance with the terms of the 2012 Plan and 2021 Plan. The options granted expire on a date specified by the Board, which is ten years from the grant date. Options granted to employees vest in varying installments over a four-year period. The 2012 Plan was approved by our Board in March 2012, and by our stockholders in June 2012. The 2012 Plan terminated as to new awards pursuant to its terms in 2022. Following effectiveness of the 2021 Plan, we have no t issued any additional awards under the 2012 Plan; 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 (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. The shares of Class A Common covered by the 2012 Plan included authorized but unissued shares, treasury shares or shares of common stock purchased on the open market. 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) 11,000,000 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 11,000,000 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. 23 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 June 30, 2025, pursuant to the 2021 Plan, the NuVasive 2014 Plan and the Ellipse 2015 Plan (collectively, the “Plans”), there were 12,906,283 shares, 154,281 shares and 335,560 shares, respectively, of Class A Common reserved and 4,540,046 shares, no shares and 309,345 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 six months ended June 30, 2025 is summarized as follows: Option ‎ Shares (thousands) Weighted ‎ average ‎ exercise ‎ price Weighted ‎ average ‎ remaining ‎ contractual ‎ life (years) Aggregate ‎ intrinsic ‎ value ‎ (thousands) Outstanding at December 31, 2024 10,959 55.47 Granted 1,898 87.99 Exercised ( 386 ) 41.41 Forfeited ( 320 ) 63.58 Outstanding at June 30, 2025 12,151 60.75 6.7 $ 66,325 Exercisable at June 30, 2025 7,323 54.43 5.3 55,131 Expected to vest at June 30, 2025 4,829 $ 70.34 8.8 $ 11,194 The total intrinsic value of stock options exercised was $ 1.2 million and $ 7.1 million during the three months ended June 30, 2025 and 2024, respectively. The total intrinsic value of stock options exercised was $ 13.5 million and $ 9.9 million during the six months ended June 30, 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: Six Months Ended June 30, 2025 2024 Risk-free interest rate 4.03 % - 4.52 % 4.02 % - 4.74 % Expected term (years) 4.9 - 9.1 4.7 - 5.5 Expected volatility 34.0 % - 37.0 % 37.0 % - 38.9 % Expected dividend yield —% —% The weighted average grant date fair value of stock options granted during the three months ended June 30, 2025, and 2024 was $ 29.45 and $ 21.47 per share, respectively. The weighted average grant date fair value of stock options granted during the six months ended June 30, 2025, and 2024 was $ 35.65 and $ 21.15 per share, respectively. 24 Restricted Stock Units Restricted stock unit activity during the six months ended June 30, 2025 is summarized as follows: Restricted Stock ‎ Units (thousands) Weighted ‎ average ‎ grant date fair value ‎ per share Weighted ‎ average ‎ remaining ‎ contractual ‎ life (years) Outstanding at December 31, 2024 416 $ 57.05 Granted 8 80.10 Vested ( 114 ) 54.10 Forfeited ( 14 ) 54.10 Outstanding at June 30, 2025 296 $ 58.98 2.97 Performance-Based Restricted Stock Units Performance-based restricted stock unit activity during the six months ended June 30, 2025 is summarized as follows: Performance-Based Restricted Stock ‎ Units (thousands) Weighted ‎ average ‎ grant date fair value ‎ per share Weighted ‎ average ‎ remaining ‎ contractual ‎ life (years) Outstanding at December 31, 2024 67 $ 53.57 Granted 3 87.18 Vested ( 20 ) 53.54 Forfeited ( 23 ) 54.10 Outstanding at June 30, 2025 27 $ 56.36 1.74 Stock-Based Compensation Compensation expense related to stock options granted to employees and non-employees under the Plans during the three and six months ended June 30, 2025 and 2024, respectively, was as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Stock-based compensation expense $ 13,617 $ 12,813 $ 26,823 $ 30,073 Stock-based compensation expense classified in Acquisition-Related Costs 27,192 — 27,192 — Net stock-based compensation capitalized into inventory ( 226 ) 31 ( 345 ) 53 Total stock-based compensation cost $ 40,583 $ 12,844 $ 53,670 $ 30,126 As of June 30, 2025, there was $ 118.5 million of unrecognized compensation expense related to unvested employee stock options, RSUs, and PRSUs that vest over a weighted average period of 2.77 years. 25 NOTE 14. INCOME TAXES 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 following table provides a summary of our effective income tax rate for the three and six months ended June 30, 2025 and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Effective income tax rate ( 7.8 %) 33.2 % 4.6 % 36.9 % For the three and six months ended June 30, 2025, the decrease in the effective tax rate was due primarily to the state valuation allowance release of $ 34.8 million and the impact of the non-taxable bargain purchase gain of $ 110.6 million, with no comparable events in the prior year . NOTE 15. RESTRUCTURING AND OTHER COSTS The Company recorded employee termination benefits as a part of the 2024 Synergy Plan and 2025 Strategic Integration Plan. The 2024 Synergy Plan was designed to optimize the organizational structure of Globus by reducing the size of our workforce. Impacted employees were notified during the first and third quarters of 2024 and the second quarter of 2025. The 2025 Strategic Integration Plan was implemented to streamline operations. Impacted employees were notified during the second quarter of 2025. Totals include stock-based compensation expense, classified in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, where applicable. The 2024 Synergy Plan The following table provides a summary of the recognized pre-tax costs for the three and six months ended June 30, 2025 and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Cost of Sales $ — $ — $ — $ 143 Research and Development 211 25 307 1,520 Selling, General and Administrative 149 53 207 3,236 Restructuring Costs 3,059 ( 566 ) 3,059 18,575 Total restructuring and other costs $ 3,419 $ ( 488 ) $ 3,573 $ 23,474 26 The following table provides a summary of activity related to the restructuring program for the three and six months ended June 30, 2025 and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Beginning Balance $ 1,222 $ 10,638 $ 2,747 $ — Charges 3,419 ( 488 ) 3,573 23,474 Cash Payments ( 1,747 ) ( 1,142 ) ( 3,272 ) ( 9,645 ) Settled non-cash (a) ( 360 ) ( 78 ) ( 514 ) ( 4,899 ) Ending Balance $ 2,534 $ 8,930 $ 2,534 $ 8,930 (a) Represents share-based compensation settled without cash payments. The 2025 Strategic Integration Plan There was no stock-based compensation expense included below. The following table provides a summary of the recognized pre-tax costs for the three months ended June 30, 2025: Three Months Ended (In thousands) June 30, 2025 Restructuring Costs $ 10,489 The following table provides a summary of activity related to the restructuring program for the three months ended June 30, 2025: Three Months Ended (In thousands) June 30, 2025 Beginning Balance $ — Charges 10,489 Foreign currency impact 12 Ending Balance $ 10,501 NOTE 16. LEASES The Company leases certain equipment, vehicles, office and storage facilities via various operating and financing lease agreements. Our leases have initial lease terms ranging from one year to seventeen years . 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. 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. We generally estimate discount rates using our incremental borrowing rate, and based on other information available, at commencement date of a lease when determining the present value of future payments as most of our leases do not provide an implicit rate. The Company includes financing lease right-of-use assets in other assets, short-term financing lease liabilities in accrued expenses, and long-term financing lease liabilities in other liabilities on the condensed consolidated balance sheet. Operating lease expense is recognized, on a straight-line basis over the term of the lease, as a component of operating income on the condensed consolidated statement of operations and comprehensive income. Finance leases amortize the right-of-use assets and amortize the interest on the lease liability over the term of the lease. 27 Amounts reported in the condensed consolidated balance sheet were as follows as of June 30, 2025 and December 31, 2024, respectively, were as follows : June 30, December 31, (In thousands) 2025 2024 Asset: Operating lease right-of-use asset $ 61,587 $ 49,647 Finance lease right-of-use asset 295 518 Total leased assets $ 61,882 $ 50,165 Liabilities: Current: Operating lease liability 13,179 10,249 Finance lease liability 132 233 Long-term: Operating lease liability 107,925 83,588 Finance lease liability 173 298 Total lease liabilities $ 121,409 $ 94,368 The table below summarizes the Company’s lease costs arising from the operating and financing lease obligations for the three and six months ended June 30, 2025 and 2024, respectively : Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Lease expense: Operating lease expense $ 5,017 $ 6,593 $ 8,516 $ 12,200 Finance lease expense Depreciation of right-of-use asset 42 165 111 348 Interest expense on lease liabilities 4 27 12 56 Total lease expense $ 5,063 $ 6,785 $ 8,639 $ 12,604 Future minimum lease payments under non-cancellable leases as of June 30, 2025, are as follows: (In thousands) Finance ‎ Leases Operating ‎ Leases 2025 $ 86 $ 9,903 2026 113 22,118 2027 69 20,477 2028 51 18,136 2029 14 17,697 Thereafter — 75,789 Total minimum lease payments $ 332 $ 164,120 Less: amount representing interest ( 27 ) ( 43,016 ) Present value of obligations under leases 305 121,104 Less: current portion ( 132 ) ( 13,179 ) Long-term lease obligations $ 173 $ 107,925 28 The table below summarizes the Company’s supplemental cash flow information and assumptions used for the six months ended June 30, 2025 and 2024, respectively : Six Months Ended June 30, (In thousands, except weighted average lease term and discount rate) 2025 2024 Other supplemental cash flow information: Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 10,926 $ 9,785 Operating cash flows for finance leases 12 668 Financing cash flows for finance leases 139 611 Total cash paid for amounts included in the measurement of lease liabilities $ 11,077 $ 11,064 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 16,984 $ 1,507 Financing leases $ 81 $ — Weighted-average remaining lease term Operating leases 8.1 9.1 Financing leases 2.8 2.4 Weighted-average discount rate Operating leases 7.5 % 5.3 % Financing leases 5.7 % 5.0 % 29 NOTE 17. COMMITMENTS AND CONTINGENCIES We are involved in a number of proceedings, legal actions, and claims arising in the ordinary course of business. Such matters are subject to many uncertainties, and the outcomes of these matters are not within our control and may not be known for prolonged periods of time. In some actions, the claimants seek damages, as well as other relief, including injunctions prohibiting us from engaging in certain activities, which, if granted, could require significant expenditures and/or result in lost revenues. We record a liability in the condensed consolidated financial statements for these actions when a loss is considered probable and the amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, and no amount in the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded. While it is not possible to predict the outcome for most of the matters discussed, we believe it is possible that costs associated with them could have a material adverse impact on our consolidated earnings, financial position or cash flows. Moskowitz Family LLC Litigation 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. Moskowitz, a non-practicing entity, alleges that Globus willfully infringes one or more claims of six patents by making, using, offering for sale or selling the COALITION MIS ® , CORBEL ® , MAGNIFY ® -S, HEDRON IA TM , INDEPENDENCE MIS ® , INDEPENDENCE MIS AGX ® , FORTIFY ® and XPAND ® families, SABLE ® , RISE ® , RISE ® INTRALIF, RISE ® -L, ELSA ® , ELSA ® ATP, ALTERA ® , ARIEL ® , CALIBER ® and CALIBER ® -L products. Moskowitz seeks monetary damages and injunctive relief. On July 2, 2020, this suit was transferred from the U.S. District Court for the Western District of Texas to the U.S. District Court for the Eastern District of Pennsylvania. On December 14, 2023, a jury returned a defense verdict in favor of Globus. On September 30, 2024, Moskowitz 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 June 30, 2025 . Pimenta Litigation On April 2, 2018, Dr. Luiz Pimenta filed suit against NuVasive in the Superior Court of California, County of San Diego for breach of contract alleging NuVasive improperly terminated the Clinical Advisor Agreement (the “Agreement”) between the parties. Dr. Pimenta seeks monetary damages in the form of unpaid royalties relating to a number of NuVasive products. The Company believes it has substantial legal defenses and intends to vigorously defend against these claims. On September 13, 2022, NuVasive filed cross-claims against Dr. Pimenta for breach of contract alleging that Dr. Pimenta improperly provided inventions to Alphatec Holdings, Inc., a competitor of NuVasive, without granting NuVasive the right of first negotiation under the Agreement. NuVasive is seeking monetary damages in the form of lost profits related to the undisclosed inventions. The trial is scheduled for on or after August 8, 2025. The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss, therefore, we have not recorded a liability, outside of counsel fees, related to this litigation as of June 30, 2025. Warranty Obligations With the Nevro Merger, the Company acquired warranty obligations that provide a limited one - to five -year warranty and warrants that its products will operate substantially in conformity with product specifications. The Company records an estimate for the provision for warranty claims in cost of revenue when the related revenues are recognized. This estimate is based on historical and anticipated rates of warranty claims, the cost per claim and the number of units sold. The Company regularly assesses the adequacy of its recorded warranty obligations and adjusts the amounts as necessary. Activities related to warranty obligations were as follows (in thousands) for the three and six months ended June 30, 2025 and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Beginning Balance $ — $ — $ — $ — Acquired in Nevro Merger 3,083 — 3,083 — Provision for Warranty 912 — 912 — Utilization ( 974 ) — ( 974 ) — Ending Balance $ 3,021 $ — $ 3,021 $ — 30 NOTE 18. SEGMENT AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the 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. Daniel T. Scavilla, Chief Executive Officer, is identified as the CODM who determines resource allocation, investing activities, and performance assessment as of June 30, 2025. Refer to Note 19, Subsequent Events for an update on leadership structure after June 30, 2025. 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. 31 The following table represents total segment revenue, significant segments expenses and other expenses for the three and six months ended June 30, 2025, and 2024, respectively: Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Net sales $ 745,342 $ 629,691 $ 1,343,463 $ 1,236,357 Cost of Sales and Operating expenses: Cost of sales ( 213,162 ) ( 180,172 ) ( 379,538 ) ( 350,646 ) Amortization of inventory fair value step-up (a) ( 5,967 ) ( 53,670 ) ( 6,016 ) ( 107,341 ) Depreciation related to cost of sales ( 29,636 ) ( 26,198 ) ( 58,609 ) ( 43,540 ) Research and development employee-related cost ( 30,101 ) ( 29,872 ) ( 55,533 ) ( 64,562 ) Research and development other (b) ( 9,852 ) ( 7,826 ) ( 17,483 ) ( 30,404 ) Selling, general and administrative employee-related cost ( 237,372 ) ( 186,608 ) ( 426,353 ) ( 376,182 ) Selling, general and administrative other (c) ( 59,258 ) ( 35,748 ) ( 104,881 ) ( 85,768 ) Provision for litigation 2,621 ( 1,335 ) 3,908 ( 1,304 ) Acquisition-related costs ( 33,155 ) ( 13,733 ) ( 34,213 ) ( 16,152 ) Amortization of intangibles ( 30,189 ) ( 29,709 ) ( 58,991 ) ( 59,385 ) Other segment expenses (d) ( 22,390 ) ( 14,201 ) ( 31,156 ) ( 41,747 ) Operating income/(Loss) 76,881 50,619 174,598 59,326 Interest income/ (expense), net 693 ( 2,335 ) 2,374 ( 4,229 ) Foreign currency transactional gain/(loss) 38 ( 703 ) 4,308 ( 16,074 ) Bargain purchase gain 110,561 — 110,561 — Income/(loss) before income taxes $ 188,173 $ 47,581 $ 291,841 $ 39,023 (a) Amounts primarily related to inventory step up associated with the NuVasive and Nevro Mergers (b) Amounts include In-Process Research & Development and other non-employee related costs (c) Amounts include non-employee related costs including taxes and fees (d) Amounts primarily 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 and six months ended June 30, 2025 and 2024, respectively : Net Sales Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 United States $ 600,784 $ 499,459 $ 1,084,641 $ 982,386 International 144,558 130,232 258,822 253,971 Total $ 745,342 $ 629,691 $ 1,343,463 $ 1,236,357 The following table represents total property and equipment, net by geographic area, based on the location of the customer as of June 30, 2025 and December 31, 2024, respectively: Property and Equipment, Net As of June 30, December 31, (In thousands) 2025 2024 United States $ 527,890 $ 523,002 International 59,615 44,716 Total $ 587,505 $ 567,718 32 NOTE 19. SUBSEQUENT EVENTS One Big Beautiful Bill Act On July 4, 2025, the President of the United States of America signed into law the One Big Beautiful Bill Act (“OBBBA”), which includes significant changes to U.S. federal income tax law. The Company is currently evaluating the impact the standard will have on its consolidated financial statements and related disclosures. Leadership Structure On July 18, 2025, Daniel T. Scavilla notified the Chairman of the Board of Directors (the “Board”) of the Company of his resignation from the Board and from his positions as President and Chief Executive Officer of the Company, in each case effective July 18, 2025. On July 21, 2025, the Company issued a press release announcing Keith Pfeil’s appointment as a member of the Board, President and Chief Executive Officer, and Kyle Kline’s appointment as Chief Financial Officer, in each case effective July 18, 2025. Keith Pfeil assumed the role of the CODM effective as of July 18, 2025 . 33