Medical device company Globus Medical (NYSE: GMED) announced better-than-expected revenue in Q1 CY2026, with sales up 27% year on year to $759.9 million. The company expects the full year’s revenue to be around $3.2 billion, close to analysts’ estimates. Its non-GAAP profit of $1.12 per share was 21.7% above analysts’ consensus estimates.

Is now the time to buy GMED? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Globus Medical’s first quarter delivered results ahead of Wall Street’s expectations, but the market reacted negatively, with shares declining over 5%. Management attributed the quarter’s performance to continued share gains in U.S. Spine and improved supply chain execution, especially after resolving prior-year disruptions. CEO Keith W. Pfeil emphasized the company’s focus on cross-selling, competitive sales rep recruiting, and robotics pull-through as core drivers, noting, “Our U.S. Spine sales team remains resolute and focused, operating against the backdrop of driving achievement against key objectives.”

Looking ahead, Globus Medical’s guidance is shaped by ongoing investments in product innovation, a more flexible approach to robotics placements, and operational initiatives targeting gross margin improvements. Management believes that broadening leasing and rental options for robotics will sustain recurring implant revenue, while operational discipline will support further margin expansion. CFO Kyle Kline stated, “We reiterate our expectation of adjusted gross profit margin falling in the range of 69% to 70% in 2026 and our long-term goal for mid-70s adjusted gross profit percentage.”

Key Insights from Management’s Remarks

Management pointed to several strategic and operational shifts that influenced both the quarter’s growth and the company’s positive outlook for the remainder of the year.

• U.S. Spine momentum: The U.S. Spine business achieved its third consecutive quarter of 10% growth, driven by share gains through cross-selling, targeted sales rep recruiting, and the expansion of robotics-assisted procedures. Management highlighted 58 weeks of consecutive growth and called out success in multiple spine product categories, including pedicle screws and cervical plating.

• Robotics strategy evolution: The company is shifting from a focus on outright sales of its ExcelsiusGPS robotics system to a more flexible leasing and rental model. This adjustment aims to increase hospital adoption by lowering capital barriers and, according to management, is designed to drive higher recurring implant and service revenue over time.

• Supply chain and integration improvements: Last year’s supply chain challenges have been resolved, with inventory and set availability now supporting case coverage across all regions. Management also noted successful integration and manufacturing ramp-up of acquired products, particularly within the trauma and limb-lengthening portfolios.

• Trauma and international growth: The trauma business grew 34%, bolstered by product launches like the Anthem elbow plating system and restored supply of limb-lengthening devices. International spine revenues rebounded after prior supply disruptions, with broad-based gains in Europe, Latin America, and Asia-Pacific.

• Margin expansion drivers: Manufacturing and supply chain initiatives, along with synergy capture from recent acquisitions, led to sequential improvement in adjusted gross profit margins. Management reiterated its commitment to achieving a mid-70% adjusted gross margin profile over the long term, emphasizing cost control and operational leverage as key levers.

Drivers of Future Performance

Globus Medical’s outlook is anchored by continued product innovation, margin expansion initiatives, and evolving go-to-market strategies.

• Flexible robotics placements: Management expects recurring revenue growth from more hospitals acquiring robotics systems through leases and rentals, rather than upfront purchases. This shift is designed to broaden adoption and drive long-term implant and service sales, though it may reduce near-term revenue recognition compared to outright sales.

• Gross margin improvement focus: The company is pursuing operational efficiencies in manufacturing and supply chain, as well as premium pricing from new product launches. Management sees the largest margin gains coming from cost reductions, leveraging vertical integration, and improved facility utilization, with product innovation helping offset typical price erosion in the competitive spine market.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be watching (1) the pace and impact of the flexible robotics placement strategy on recurring revenue, (2) whether margin expansion holds as manufacturing and supply chain initiatives mature, 

Globus Medical currently trades at $78.45, down from $85.06 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

High Quality Stocks for All Market Conditions

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week - FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.