Globus Medical, Inc. (GMED) Earnings Call Transcript & Summary

Welcome to Globus Medical's Second Quarter 2026 Earnings Call. [Operator Instructions]. I will now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, please go ahead.

Thank you, Sarah, and thank you, everyone, for being with us today. Joining today's call from Globus Medical will be Keith Pfeil, President and Chief Executive Officer; and Kyle Klin, Chief Financial Officer. This review is being made available via webcast accessible through the Investor Relations section of the Globus Medical website at www.globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2025 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. Our SEC filings, including the 10-K, are available on our website. We do not undertake to update any forward-looking statements as a result of new information or future events or developments. Our discussion today will also include certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We believe these non-GAAP financial measures provide additional information pertinent to our business performance. These non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are available on the schedules accompanying the press release and on the Investor Relations section of the Globus Medical website. With that, I will now turn the call over to Keith Pfeil, our President and CEO.

Thanks, Brian, and good afternoon, everyone. Thank you for joining us on today's call. We completed an exceptional second quarter, positioning us for a strong 2026 as we move into the second half of the year. At a top level, Q2 revenue was $789.6 million, growing 6% as reported. Excluding Nevro, Q2 revenue growth was 9% led by 7% U.S. spine growth and 14% growth in international spine. Fully diluted non-GAAP earnings per share was $1.34 growing 56% compared to the prior year quarter, while Q2 adjusted EBITDA was 35.4%, growing 34% in dollars and 740 basis points over the prior year quarter. During the quarter, we also deployed $136 million to repurchase 1.6 million shares. Looking back, since 2022, Globus has more than tripled our top line and earnings while developing a scalable working model to deliver these results over the long term. Our focus on organic growth combined with the scale from the NuVasive merger and the Nevro acquisition underscores our commitment to delivering value creation for our shareholders. We successfully demonstrated our ability to bring together the 2 best-in-class spine portfolios while expanding our commercial distribution and operating with a sense of urgency in a manner that exhibits financial discipline through earnings accretion and increasing returns on capital. Our team has launched over 25 products over the past 36 months, demonstrating our unwavering focus on organic product development. The combination of new products and our significantly expanded worldwide sales force has allowed us to continue taking market share. The acquisition of Nevro with a clinically superior pain product opens the door for us expanding our addressable market into many exciting areas while bringing that franchise into our business model. With all the changes occurred in the past 3 years, it's easy to look past what has been accomplished while still maintaining the ethos of what Globus was founded upon. Now let's move into sales. Musculoskeletal sales were $763.5 million, growing 8% versus the prior year quarter and 4% sequentially. The growth drivers are spine, both U.S. and international as well as trauma. U.S. Spine continues to take significant market share, growing 7% as reported on strong procedural volumes. Competitive recruiting, pull-through from robotics and product launches continue to fuel growth. Our competitive hires in the second quarter were double the amount higher in Q1, and it represents the second highest onboarding in the past 8 quarters. Strategically, competitive recruiting has and will remain at the forefront of our growth strategy. Growth remains broad across U.S. Spine with double-digit growth seen in many products such as SABLE, ELSA, HEDRON C, Reline C and Reline Open. Power tools continue to drive uptake with ThermoPro growing over 250% in the second quarter. International Spine grew 14% as reported and 12% on a constant currency basis led by mid-teens growth across key EMEA markets, namely Italy, Spain and Poland. APAC growth was broad-based across the region, while Lat Am generated its growth mainly from Brazil and Colombia. Overall, Q2 International Spine performance reflects our strategy of going deeper in the territories in which we operate. The focus in infrastructure are such that we can position ourselves to see continued above-market growth moving ahead. Trauma revenue grew 31% versus the prior year quarter and 18% sequentially as we continue to drive share growth in our core trauma line, while returning to normal supply in our precise product line allowing us to fully satisfy U.S. demand while also turning on numerous OUS markets. We are actively capturing market share and attracting top sales talent as our product portfolio has grown and has become differentiated. We are also beginning to see tremendous interest from surgeons, hospitals and competitive sales reps in our product portfolio as a full portfolio of trauma alternative. We see our Trauma business as a long-term growth driver moving ahead. Enabling tech sales were $26.1 million, declining 26% in the second quarter, driven by our continued shift towards greater flexibility in our capital acquisition model. Despite the decline in INR revenue, we are seeing early evidence of success with our new model as EGPS and e-hub units deployed where there sold, leased or rented grew 11% sequentially and 25% versus the prior year quarter. Both data points validating the demand for Excelsius technology. Robotic utilization continues to expand with over 137,000 procedures performed. We remain steadfast and confident in the long-term strategy of our revised approach to capital deployment. Our overarching focus is to achieve above-market growth of our implant technology, disposables and service by launching successful capital programs, creating the catalyst for pull-through revenue. Q2 sales Nevro essentially flat to Q1, consistent with our comments made last quarter and in line with our expectations as we rapidly integrate Nevro into the Globus business model of sustained share growth gains driven by new product development sales force expansion and disciplined operational execution. Recruiting has been the primary area of focus within the sales force, and we've seen success in filling open roles with roughly 75% of those roles filled during the quarter. Looking ahead, we remain active on both the recruiting and training fronts. Our near-term goals are focused around driving trial volumes higher, where we expect to see improvement as we move through the back half of the year with the goal of returning to historical trial levels late in Q4. During the quarter, we launched 3 new products, 2 in trauma and 1 in Spine, which I will touch on quickly. The trauma products include the AUTOBAHN hip fastener and the TENSOR suture button system. Spinal product is Reline 1. The AUTOBAHN hip fastener is engineered to offer robust fixation and resistance to enhance stability with minimal disruption to workflow. This product is designed to allow surgeons to treat patients with poor bone quality with a greater level of confidence and uniquely positions our AUTOBAHN intramedullary nailing system. The TENSOR suture button system is engineered to redefine future management in the OR. The system features a self-locking suture and an inserter with integrated tensioning handles, which provide a more streamlined approach for tensioning through a single incision. Center is compatible with Anthem ankle and 1/3 tubular plates to offer surgeons a complete ankle solution. Reline 1 is designed to address the unmet need for true single-step screw placement in order to reduce procedural steps increase efficiency and minimize patient risk. The ratchet retraction handle, screw design and style it tip geometry work together to achieve these benefits through a differentiated procedural solution. Reline 1 is a premier solution for mass T-Lift and minimally invasive posterior fixation. Last quarter, I had mentioned receiving FDA 510(k) clearances for both our surgeon designed patient-specific script spacer system comprising of 7 patient-specific lumbar interbody systems as well as our surgeon designed patient-specific script rods. Script lumbar spacers are static integrated and expandable thoracolumbar interbody fusion devices additively manufactured with patient-matched endplate topography for maximum stability. We are expecting to launch these systems later in Q3. The patient-specific ship spacers may be placed using Excelsius GPS insurance for navigation with Excelsius GPS, Excelsius Hub and Excelsius XR. Scripp patient rods are precision bent to the surgeon's pedicle screw placement plan and designed to reduce time spent on intraoperative rod bending. Rod are compatible with our Creo, Reline and Revere pedicle screw systems for both open and MIS procedures. Scripps Studio screw plans can be uploaded to our Excelsius GPS and Excelsius Hub Systems for robotically navigated Scripp placement intraoperatively. Our platform keeps the position at the center of the design and planning process with an intuitive interface, allowing the surgeon to efficiently design dis cite restoration, spinal alignment and pedicle screw placement translating their precise clinical intent directly into the implant design. Our software is treated as an advanced tool rather than a replacement for clinical judgment, ensuring the implant perfectly executes to the surgeon's operative strategy. Our expandable offering incorporates our proven technology, allowing surgeons to insert the implant at a lower height designed to minimize nerve retraction and reduce the impaction forces required to implant the spacers. Once in the disk space, the space can be expanded to restore optimal [ discite ]. Our patient match spacers and rods are bundled with our high-quality implants and best-in-class disprep and retractor systems while integrating with our Excelsius suite, thus ensuring final placement matches a digital pre-op plan to ensure proper navigated placement. With our Scripp clearances, we will be the only company positioned to offer a complete portfolio of patient-specific lumbar interspace and rods integrated with our enabling technology truly establishing us as the one-stop shop for lumbar patient-specific implants. Looking ahead, specific focus is centered around organic product development with well over 60 projects in process. We are committed to leading with innovation and purpose. Our in-house development team is expanding to account for greater project complexity as we work to bring new and exciting products to market that address unmet clinical needs. We are continually working to improve the efficient flow of organic product development from concept to production such that we can speed up the launch of new products moving forward. The last few years were spent largely building a broader platform within musculoskeletal care across spine, trauma, enabling tech and neuromodulation. We've assembled a stronger globus bag that is the platform for the future. allowing us to expand our research into various new areas of unmet clinical needs. We're leaning into data, analytics and AI. It's not just about treating 1 patient. It's how we treat that patient and learn so we can help others more effectively and faster. It's how we become smarter to further assist our surgeon partners and clinicians in patient selection and surgical execution. We are developing a surgical intelligence ecosystem that will accelerate digital solutions through strategic investments, so we can bring together intelligent patient selection enabling tech-driven proceduralization of surgical technique while constantly adding to our complementary implants and instruments to improve surgical outcomes. It's not about the next quarter rather, it's about driving long-term sustainable development to drive market disruption and differentiation. I'm thankful to all of our Globus team members for their hard work and dedication in helping us deliver upon this fantastic quarter. Your teamwork, dedication and focus are how we continually work to solve unmet clinical needs. I'll now turn the call over to Kyle.

Thanks, Keith, and good afternoon, everyone. Our second quarter results delivered above-market top line growth, including share taking domestic and international spine sales growth, our seventh consecutive quarter of adjusted gross profit margin expansion and a quarterly record for fully diluted non-GAAP earnings per share. Sales grew 6% as reported compared to the second quarter of the prior year with 9% growth in the base business, excluding Nevro. U.S. Spine, again led the way in growth for the organization, up over 7% compared to the second quarter of the prior year, marking our fifth straight quarter of above-market growth. Adjusted gross profit margin took another step forward matching 69.4% in the second quarter, a 200 basis point improvement over the prior year quarter as we continue to execute our supply chain initiatives. On the bottom line, we achieved record Q2 fully diluted non-GAAP earnings per share of $1.34. In today's prepared remarks, I will provide insights into our quarterly business performance, comment on share repurchases and capital allocation priorities and provide an update on guidance for 2026. Second quarter 2026 results were highlighted by revenue of $789.6 million, growing 5.9% on an as-reported basis and 5.6% on a constant currency basis. GAAP net income was $151.6 million, resulting in $1.10 of fully diluted GAAP earnings per share. Non-GAAP net income was $184.3 million, delivering $1.34 of fully diluted non-GAAP earnings per share or 55.8% of non-GAAP EPS growth over the prior year quarter. Total company adjusted EBITDA margin was 35.4% in the second quarter of 2026 compared to 28% in the prior year quarter. Our Q2 2026 base business Globus adjusted EBITDA margin was 36.9% compared to 32.3% in the prior year quarter, and stand-alone Nevro adjusted EBITDA margin was 22.4% for the quarter compared to negative 1.4% in the prior year quarter. Our second quarter net sales of $789.6 million reflects base business Globus sales totaling $708.6 million growing 8.9% as reported and 9% on a day adjusted basis with the same number of selling days in the U.S. and international and 1 less selling day in Japan compared to the prior year. Base business Globus sales grew 8.5% on a constant currency basis. Sales growth was led by U.S. Spine, which achieved 7.3% as reported growth and International Spine, which grew 13.8% on an as-reported basis and 12.2% on a constant currency basis. Our trauma and neuromonitoring businesses each grew over 30% and have now had 4 straight quarters of double-digit sales growth. Sales growth across these underlying businesses were offset by a 14.3% decline in Nevro and a $9 million decline in enabling technologies. Nevro saw a $1.7 million sequential sales decline from the first quarter to the second quarter of 2026. As mentioned previously, we enacted significant structural changes within the product development, sales and marketing and general and administrative functions of the Nevro business in 2025. We remain on track with our integration of the Nevro business and expect trial volume recovery by the end of this year. Despite the expected decline on the top line, we feel confident in the trajectory of the Nevro business and our ability to improve top line by the end of 2026. Additionally, we continue to see the lasting and sustainable impact of cost control actions taken in 2025 on profitability. Highlighted by sequential quarterly EBITDA margin expansion from 11.8% in the first quarter to 22.4% in the second quarter of this year. Pivoting back to overall results, Musculoskeletal revenue achieved $763.5 million, growing 7.5% over Q2 2025 despite the decline in Nevro. Base business Globus musculoskeletal revenue grew 10.9%. Enabling Technologies revenue was $26.1 million, declining 25.8% as-reported. The enabling technologies business saw a softer quarter in sales dollars when compared to Q2 2025. However, we have continued down the path laid out in the back half of 2025 of being flexible in the way we quote alternative ways of acquiring our capital. To that end, we have executed more alternative offerings in this quarter than ever before. While the majority of our units this quarter remain cash sales, we've continued to see the shift quarter after quarter towards alternative acquisition models and expect this trend to continue as we execute our revised approach to capital deployment. U.S. revenue during the second quarter of 2026 was $619.1 million, growing 3% as reported. Growth in our domestic business was led by our U.S. Spine, neuromonitoring and trauma businesses and partially offset by declines in Nevro and enabling technologies. Q2 2026 international revenue was $170.5 million, growing 18% as reported and 16.2% on a constant currency basis. International growth was seen across the board as we focus on deeper penetration within our existing markets. The International Spine business led the way with 13.8% as reported and 12.2% constant currency growth and double-digit gains across EMEA, Latin America and APAC regions. In the first half of 2026, we have grown the international spine business by 14.5% as-reported and 10.6% on a constant currency basis and are targeting sustained double-digit growth in the back half of the year. Transitioning to the rest of the P&L, GAAP gross profit margin in the quarter was 66.8% compared to 63.3% in the prior year quarter. Adjusted gross profit margin was 69.4% compared to 67.4% in the prior year quarter, primarily driven by increased sales, resulting in fixed cost leverage, favorable sales mix and the impacts of synergy execution through our manufacturing and supply chain initiatives and partially offset by increased freight costs. Manufacturing and supply chain initiatives continue to be a focal point of our operations team as we target a return to a mid-70s adjusted gross profit margin. Quarter after quarter, we are seeing consistent progress as we work towards this goal with a 200 basis point improvement over the prior year second quarter and a 20 basis point sequential improvement over the first quarter of this year. We reiterate our expectation of adjusted gross profit margin falling in the range of 69% to 70% in 2026, representing a 90 to 190 basis point improvement over 2025. Research and development expenses in Q2 2026 were $36.3 million or 4.6% of sales compared to $40 million or 5.4% of sales in the prior year quarter. The resulting decline in R&D both in dollars and as a percent of sales is attributable to synergy capture, resulting in lower employee-related costs. timing of incremental investment in product development and leverage from higher sales volume. As Keith mentioned in his prepared remarks, we are expanding investment in our in-house product development capabilities as we work to bring new and exciting products to market. To that end, we are ramping investment in product development in the back half of 2026. We reiterate our expectation of 2026 R&D expense to be in the range of 5% to 6% of net sales. SG&A expenses in the second quarter of 2026 were $286.8 million or 36.3% of sales compared to $303.6 million or 40.7% of sales in the prior year quarter. The decrease in spend is primarily attributable to decreased employee-related costs from synergy actions and lower employee benefit costs from the timing of claims, partially offset by increased sales compensation costs from higher volume. Q2 2026 net interest income was $7.1 million compared to $0.7 million in the prior year quarter. The $6.4 million favorable change is being driven by an increase in interest income from cash reserves. The GAAP tax rate for the second quarter of 2026 was 20.1% compared to negative 7.8% in the prior year quarter. The prior year quarter GAAP tax rate was impacted by a $34.8 million onetime tax benefit which was primarily driven by the discrete nature of the release of a valuation allowance against previously reserved R&D credits acquired in the NuVasive merger. Our non-GAAP tax rate for the quarter was 20.9% and compared to 25% in the prior year quarter. Our GAAP and non-GAAP tax rate in the current period were favorably impacted by stock option exercise benefits. Given the favorability seen in tax rate in the first half of 2026, we are revising our expectation of non-GAAP tax rate to be in the range of 23% to 24%, down from our previous guide of 24% to 25%. Cash, cash equivalents and marketable securities were $840.5 million at June 30, 2026, compared to $629.1 million at December 31, 2025, the increase in cash is driven by operating cash flow of $412.1 million, primarily from higher net income and partially offset by $136.1 million of share repurchases and cash spend on capital expenditures of $72.8 million or 4.7% of sales. In Q2 2025, we announced a new share repurchase program of $500 million, under which we have purchased $110 million worth of shares in 2025. In the second quarter of 2026, we repurchased $136.1 million or 1.6 million shares and have $253.9 million of authorization remaining under this program as of June 30, 2026. Share repurchases have been and continue to be an integral part of our capital allocation strategy with repurchases in 2026, representing 40% of our year-to-date free cash flow. Since closing the NuVasive merger in September 2023, we have invested $747 million in share repurchases, representing over 50% of our free cash flow generation in that period and buying back 11.9 million shares or 30% of the dilution from the NuVasive merger. We reiterate our capital allocation strategy which prioritizes internal investment in innovative product development efforts above all else. We focus our capital spending efforts on building sets for our worldwide sales force and investing in facilities, machinery and equipment to continue to increase our manufacturing footprint. We will continue to buy back shares through our share repurchase program, minimizing dilution and increasing shareholder value. Finally, we will continue to evaluate complementary M&A while focusing the use of our capital on driving investment for long-term profitable growth. Pivoting to financial guidance. Globus Medical reaffirms its full year 2026 revenue guidance of $3.18 billion to $3.22 billion and we are increasing our guidance for non-GAAP fully diluted earnings per share to be in the range of $4.95 to $5.05 from the previous range of $4.70 to $4.80. The revenue guidance implies growth over 2025, ranging from 8.2% to 9.6%. The revised fully diluted non-GAAP earnings per share guidance implies growth over 2025 and ranging from 24.4% to 26.9%. The upward revision of fully diluted non-GAAP earnings per share guidance reflects a favorable increase in expectations from the margin expansion and operating leverage seen in the first half of 2026, which we expect to have a favorable impact on our full year results. The second quarter of 2026 has been highlighted by share-taking domestic and international spine top line growth, 200 basis points of adjusted gross margin expansion and a definitive return to mid-30s EBITDA margin. year-to-date top and bottom line performance has set us up for a record-breaking year in 2026. I'm proud of the Globus team for their execution in the first half of 2026 and their unrelenting pursuit of excellence and our drive to be the leading musculoskeletal technology company in the industry. Operator, we will now open the call for questions.

[Operator Instructions]. To begin, we will bring Lawrence Biegelsen from Wells Fargo to the stage.

This is Ross on for Larry. So maybe starting off with your international piece of the business. You guys obviously had a strong quarter, but we are hearing from competitors of some softness in Europe due to transient headwinds such as strike and heat wave. Have you guys seen this pickup is the 2Q and you expect a more seasonally soft 3Q?

This is Keith. Thanks for the question. Generally speaking, our performance across the was pretty in line with expectations. Countries go up and down from quarter-to-quarter. But when I look at EMEA, I look at it in the aggregate and what I see is a business that's moving forward. As we look through -- look forward to the rest of the year, Kyle had mentioned earlier that we see the international business as a strong grower as we look ahead.

Yes. And the only thing to add there is back to the prepared remarks, we had noted double-digit growth across our international space, including EMEA, they grew double digits in the second quarter.

Next, we have Vik Chopra with BMO. Vik, your line is open.

Congrats on a nice quarter. Two for me. you reported, I think, U.S. buying growth of 7% in the second quarter. I think that step down from the last couple of quarters. Can you just provide an update on what's going on there? And if this is a more sustainable run rate going forward? And I had a quick follow-up, please.

This is Keith. We had -- we came off a couple of strong quarters here, we had basically 10% growth. As we get into the second half of the year, our comps get a little more difficult as we move through but that doesn't take away from our confidence in the business. We see our U.S. Spine business is performing really well, and we're confident as we look into the rest of the year. But like I said, as we get further into the second half, our comps just get a little more difficult year-over-year.

Understood. And a quick follow-up, if I could. You beat on the gross margin line. You've talked about a return to a mid-70s adjusted gross profit profile. Given the performance we've seen to date, over what time frame do you expect to achieve that?

Thanks for the question, Vik. And yes, to highlight what we talked about during the prepared remarks. This is the seventh straight quarter of gross profit margin expansion. We expect to finish the year somewhere in the 69% to 70% range and see sequential uplift quarter after quarter as we've seen over the past 7 quarters as well. we're likely into in touching 70s by the end of the year, probably very, very low in the 70s. And I think we look back to getting into that mid-70s here and in the year or 2 after that.

Yes. I think I agree with Kyle's point because if you think about what we've done over the last couple of years, we announced NuVasive, we said we want to get back to mid-70s gross margin profile.and mid-30s EBITDA by the end of the third year. We're going to touch on -- we already achieved getting back to mid-30s before we got through 3 full years. to Kyle's point, we'll get into the low 70s this year. There's a lot of other actions that have occurred with acquiring Nevro and other steps that occur within our business that may have had that been a little bit slower, but as I see the overall business and everything that's happening in manufacturing and operations from an initiative perspective, we feel confident on getting back to that in 2027.

The next question is from the line of Richard Newitter with Truist Securities.

This is Ravi on for Rich. So I guess I have 2 questions. I'll ask them upfront, please. One, can you just maybe talk about the Nevro cadence in your guidance for the rest of the year and the M&A strategy in that division? And then maybe second, this lumbar spacer launch coming into 3Q. Can you maybe talk about how quickly can you get that from the doctor designing the case to production in their hands? Just curious what the lag looks like? And are you able to kind of capitalize on some of these new DRGs that are going live in the fall?

Could you repeat your first question again?

I was just asking about Nevro cadence for the reminder of the year. And then just what do we think about M&A strategy? I didn't really hear much of that on the call in terms of Nevro.

No, that's fair. So Nevro cadence, it's consistent really with what we talked about last quarter. As we move through the rest of this year, we're looking to get better as the year moves on and our early read is we're going to look at trial volumes as we get through Q3 and into Q4, our expectation of those trial volumes translate into sales starting to move higher. Nevro as we think about it is a business that we want to return to our historical level of sales. Secondly, on M&A, I have no comments on never M&A specifically at this point. We've been very active on the M&A front the last several years. And really the focus right now is stabilizing this business and getting it to -- back to a path of returning it to growth. Your second question I just kind of more about the timing of the case planning to surgical kind of your production. When you think about lumbar spacers and patient specific, it's about a week to 10 days. We expect to be able to turn it around. So we're working with our manufacturing team to make sure that they can deliver in that time frame, and that's our expectation at this point. And as you think about reimbursement, we think that our strong reimbursement codes are already in place. So as we think about launching this business and this product line, we're confident in the reimbursement profile that this business and products would have.

Our next question comes from the line of Matt Taylor with Jefferies.

The first question I wanted to ask was just whether you could put a finer point on revenue guidance because the range for the second half implies something like 2% to 5% growth bottom to top. Are you more comfortable anywhere within the range? Can you help us 0 on that, recognizing you have the tough comps and the Nevro dynamics?

Matt, this is Kyle. Thanks for the question. So as we think about the second half of the year, yes, we have a range of $3.18 billion to $3.22 billion. We're not going to point to a specific point in the range that we feel comfortable with. But what I would say is if you look at where we've performed so far this year, how we feel about our ability to perform in the second half. Those areas, we continue to feel very, very positive about. The 2 areas we touched on throughout the call this quarter and last quarter has been a change in strategy on enabling tech as well as the Nevro business and getting that back to a stability level so that we can start growing. Those represent the downside risk within our guide. Overall, I guess I would say we feel comfortable with where our guide is at the full range.

And can I ask a follow-up on hiring. It looks like that was really strong this quarter and kind of picked up. Was there anything specific there? Or is this more a continuation and it was a really good quarter?

Just a continuation of what we're doing. It's something that I personally want the sales team focused on and being aggressive with. When I think about our products, we have a very broad spine product portfolio. I commented how many projects we have in process in my prepared remarks. We're innovating, we're driving, and we have our exclusive direct selling force really gives us an ability to touch our accounts and provide them with a comprehensive product offering. I think it's something that strongly differentiates us. And it's something that I want our sales leaders to accentuate as they go out trying to find competitive recruits.

Our next question is with Caitlin Roberts from Canaccord Genuity.

Would love if you could provide a bit more color on the expectations for enabling tech growth in the back half, just given the growing financing flexibility dynamic that you called out.

Thanks, Caitlin, this is Keith. We don't break out our guidance into the parts and pieces. But what I would say, and it really would fall back on my prepared remarks, we're looking to get our capital in the hands of our customers to drive implant growth over the long term. I talked about that capital driving implant growth, disposables growth and service growth. So if you extrapolate that, what I think about is how that's going to drive enhanced sales in musculoskeletal.