Welcome to Globus Medical's Fourth Quarter and Full Year 2025 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, Dana, and thank you, everyone, for being with us today. Joining today's call from Globus Medical will be Keith Pfeil, President and CEO; and Kyle Kline, 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 in 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. Momentum seen coming out of our second quarter continued and accelerated as we progressed through 2025, resulting in a record Q4 performance. Our team delivered, showing great poise and determination during a period of growth and change. I'm proud of our team, and I'm thrilled to be here today discussing these results as well as provide insights into the future. Focusing first on our top-level financial performance for the full year 2025. Globus delivered $2.939 billion of revenue and $3.98 of fully diluted non-GAAP earnings per share growing 16.7% and 30.8% as reported, respectively. Full year 2025 base business revenue, excluding the contributions from Nevro, grew 5% as reported, with Nevro adding $293.6 million in revenue for the full year. Shifting into Q4. Revenue totaled $826.4 million, growing 25.7% versus the prior year quarter, while non-GAAP EPS finished at $1.28, growing 52.1% versus Q4 2024. Digging into this further, our base business revenue of $726.7 million grew 10.6% versus the prior year quarter and included double-digit U.S. spine growth as well as record Enabling Technologies revenue for the quarter. This performance serves to underscore my opening comments on the growing momentum in our business. Looking at the second half of 2025 versus the second half of 2024, our consolidated base business grew organically at 8.8%. This, coupled with continued back-end execution, helps propel us to our sixth consecutive quarter of adjusted gross margin rate expansion as well as returning the base business to a mid-30s adjusted EBITDA, finishing at 35.7% in Q4 '25 and 33.4% for the full year. When we announced the NuVasive merger, we emphasized its compelling financial profile for shareholders and specifically cited our focus on delivering mid- to high single-digit sales growth as well as a mid-30s adjusted EBITDA profile…

Thanks, Keith, and good afternoon, everyone. To expand on Keith's comments, we've had a truly exceptional finish to 2025 with a record-setting quarter in both top and bottom-line results. Operationally, we continue to execute our integrations of the recent merger and acquisition of both NuVasive and Nevro. Our revenue growth was driven by our domestic spine business, growing 10% over the fourth quarter of 2024 and continuing to build upon the trend of above-market growth seen in Q2 and Q3 of this year. Our Enabling Technologies business also saw record growth, achieving over $55 million of revenue in the quarter while posting record sales in terms of dollars and units. As we've mentioned in our Q3 earnings call, we updated our guidance to indicate our expectation was that Nevro would be accretive to earnings in the first 9 months post-acquisition. And today, I'm affirming that the Nevro business was EPS accretive within the first 9 months post-acquisition. This is a phenomenal achievement by the broad Globus and Nevro teams, beating initial guidance by 15 months. Today's discussion will focus on providing insights into our quarterly and annual business performance, including the impacts of Nevro, a look back on synergy execution against our 2 most recent acquisitions and an update on guidance for 2026. Full year 2025 revenue was $2.939 billion, growing 16.7% on an as-reported basis and 16.2% on a constant currency basis. Net income was $537.9 million, resulting in $3.92 of fully diluted earnings per share. Non-GAAP net income was $545.6 million, delivering $3.98 of fully diluted non-GAAP earnings per share or 30.8% of non-GAAP EPS growth over the prior year. Full year adjusted EBITDA was 31.3%. Focusing on our fourth quarter results, revenue was $826.4 million, growing 25.7% on an as-reported basis and 24.7% on a constant currency…

[Operator Instructions] Our first question comes from the line of Shagun Singh of RBC Capital Markets.

Congratulations on a great end to the year. I guess just 2 sets of questions from me. First, on the base business, can you bridge us from your 9% second half 2025 and 9.4% ex-FX growth exiting the year to, I guess, mid- to high single digits in '26? Is that conservative? And then can you maybe put a finer point on margins? It seems like you delivered a really strong quarter in Q4. You're talking about long-term mid-70s outlook and above-market profitable growth. So how should we think about margins over time?

Thanks, Shagun. This is Keith. Thanks for giving us the call -- sending these questions over. So I think, first of all, when I think about our sales growth, really, when I think about 2025, it was really a tale of 2 halves. The first half of the year, we got off to a slow start. We had really a disappointing Q1 that really moved forward in Q2, really led by some disappointing results in Enabling Tech. But one of the things that we started to see in Q2, which carried forward into Q3 and Q4 was U.S. Spine coming back to life. As I look at the year, we did a really nice job growing our sales force with competitive rep conversions. When you think about the products that we've launched, we launched 9 products in spine in 2024 and another 6 in 2025. Those really helped drive some of that growth. And on top of that, like I said in my prepared remarks, we really leaned into inventory and set production. All of that really started to come online as we got through the year, which allowed our momentum to continue. As I think about how we closed the year, we saw our normal seasonal bump in spine. And as you get into Q1, the thing I'm encouraged by is -- and really ties back to my prepared remarks is that we're still seeing momentum in our U.S. Spine business. Our trauma business, again, that performed better as we got throughout the year. I was very encouraged by that. As it relates to margins, Kyle will give you a couple of brief comments on margins.

Yes. From a margin perspective, obviously, we ended the year here at 69.2% from a gross profit perspective. Next year, what I said in my prepared remarks is we expect at least 100 basis point improvement in gross profit, somewhere ranging from the 69% to 70% for the full year, compare that back to the 68.1% we did for full year 2025. As you step through the year, I think as Keith commented on the -- on the Q4 results from a revenue perspective, we always have that seasonal lift in Q4 and then you typically see a sequential slowdown as you go from Q4 into Q1. We feel positive on what we're seeing in terms of U.S. Spine, but we tend to still see from a base business perspective, a little bit of step down in Q1, building up into a little bit higher of a Q2 and Q3 and then stepping up again seasonally into Q4. We think that our gross profit margin will follow that similar cadence that we've seen in the past.

Our next question comes from the line of Vik Chopra of Wells Fargo.

This is Namratha on for Vik. Could you please share your thoughts on how you think you get from a market share perspective and also talk about the general strength of the spine market?

This is Keith. Thank you for the question. As I think about our U.S. Spine business, I continue to believe that we're growing above market. I think that's evidenced in basically achieving 10% growth in Q3 and Q4 and really seeing some of that momentum continue as we get into the first quarter. We don't really comment a ton on the overall market. But I guess from my standpoint, I view the spine market as being relatively healthy.

Our next question comes from the line of Richard Newitter of Truist Securities.

Maybe just for me, look, congrats on a lot of aspects to your performance. But one of the things that really struck me outside of the margin was the Enabling Technologies performance and how that bounced back. Just wondering if you can characterize the environment a little bit, what changed, if anything, from earlier in the year? Clearly, something I think got better for you guys or maybe it's just lumpy and it played out the way you thought. And then as you're answering that, if you could talk a little bit about an operating lease strategy or more of a placement strategy as you go forward. I think you had alluded to more of those types of situations on a go-forward basis. What's contemplated in your guidance for '26 on that front? And how should we think about that?

Rich, this is Keith. Thanks for the question. So Enabling Tech was, I would say, a very lumpy year. As I commented earlier, with Shagun's earlier question, we saw a disappointing Q1, a nice bounce back in Q2, again, a disappointing third quarter. And really, when we got to the fourth quarter, the thing that we saw is our pipeline -- I spoke a lot about during the year about an elongation of pipeline deals taking longer to actually just close. We saw those deals come to fruition in the fourth quarter. And it really ties back to what I was saying throughout the year is that I didn't see us losing deals, but the deals were taking longer to close for one reason or another. And as I look into 2026, I still see a pipeline that I feel is robust. And as I look at where we're at in the quarter, I'm pleased with where we are thus far. Obviously, there's still more work to do in the quarter, but I'm pleased with what I see. And as it relates to getting more flexible with our deals, yes, operating leases are one of the things or one of the options that we can provide to our customers. As I noted in my prepared remarks, we're absolutely going to be more aggressive because really what we're trying to drive is placement of that capital to drive really the implant pull-through. That's the focus and really ties back to us saying that, look, we want to make sure that these capital units get placed and we're driving successful launches of the programs to generate strong implant pull-through. You should expect us to be aggressive in the marketplace as we get into 2026.

Yes. The only comment that I would add, Rich, from a guidance perspective is right, our contemplation in terms of where we have our guidance is based on some mix of sales as well as fair market value leases, placements, et cetera. We're going to continue to make every single one of those options available, and we do think that there will be some mix in 2026.

I guess just higher mix than '25. Is that fair?

Yes. I would say that the mix of lease approaches will be higher this year -- in 2026 than 2025 because we really got more aggressive quoting them as we got to the back half of the year.

Our next question comes from the line of Travis Steed of BMA Securities.

A couple of questions for me. One, over the last couple of quarters, U.S. Spine growth has really accelerated. And a question we get from investors a lot is how sustainable is that U.S. Spine growth? And so just would love to kind of get a sense on your ability to kind of understand how sustainable this kind of growth rate is in U.S. Spine. And then one of your competitors recently launched a new Enabling Tech robot navigation system, if you will. I'm just kind of curious how you're contemplating that if you see that as a competitive portion of the market or not?

So thanks, Travis. This is Keith. So #1, as I think about spine and the growth, we see that growth for our business is durable and something that we look to sustain as we move forward. I think back to some of the things I spoke about, we've continued to launch products in spine. We've continued to grow our sales force. It is fair to assume that we are aggressive in bringing competitive reps into the business. And more importantly, like I said in my prepared remarks, we're really looking to get some of the M&A noise behind us and get back to focusing on really what made Globus great. That's launching new products, driving competitive rep conversions and driving implant pull-through. As I think about the leadership team, we're all focused around those specific areas to drive the business as we get into 2026. And do you want to repeat your -- second part of your question, please?

Yes. One of your large spine competitors just got approval for a new robot navigation system and I didn't know if you -- how you were looking at that in the marketplace.

Yes. No, I mean competition is continuing to evolve, and we still view that Excelsius is a great option for us and for our customers. I commented in my prepared remarks that what we brought to market in 2017 was a floor-mounted navigated-based robotic system. I think some of the competitive offerings that have recently come out only served to reinforce what we came out with back in 2017. As I think about the features that we have, providing best-in-class features and technology, I believe we are well positioned to really weather any competitive threats that we see. I think that combining the technology along with us getting more aggressive in how we get robots into the accounts positions us well for 2026.

Our next question comes from the line of Mathew Blackman of TD Cowen.

A couple of questions, and I apologize, I was bouncing around calls. So you may have touched on this a little bit. But just thinking about Nevro and really thinking bigger picture beyond 2026, just help us think through when that business perhaps starts recalibrating to at least sort of corporate type levels of growth. And to get there, do you need more stuff in the back portfolio enhancements, whether they're organic or inorganic? And then I've just got one follow-up.

Okay. It's a great question. I mean, as I commented earlier, Nevro allowed us to have a pain point in our portfolio. We are excited to bring that business in. And as we see it in 2026, we'll work through some lumpiness as we recast our go-to-market approach. But I think as you look at the business, one of the things that we want to drive is consistency, and we want folks to get back to the basics. I just came back from the Nevro sales meeting this past weekend, and I was really encouraged by the team, the team getting fired up, understanding that we're going to market as one company. And from my perspective, getting that mindset across the team is infectious, #1. But #2, the team knows that they're with a company that's going to drive investment and really look to foster continued product development. Your comment on do we need new products? We're going to continue to evolve and bring new products to market. I think over time, you're going to see us look at other neuromod options such as peripheral nerve. But as time passes, we want to drive the cross-sell with legacy GMED products. We want to develop new spinal cord stimulation products. We want to look at mechanical solutions. And like I said earlier, we want to get back to the basics of running that business. And lastly, but most importantly, we want to drive competitive recruiting. I think that is something that we think will be a catalyst for this business as we move forward.

Okay. I appreciate all that color. And then my follow-up question is international. It's been a heavy lift in international, and that's even before the NuVasive [indiscernible] and some supply constraints you're working through today. So could you maybe just take a step back [Technical Difficulty] the headwinds are in the international [Technical Difficulty] about that business returning to, I think you've talked about double-digit growth. How do we get there? And I guess the last piece of that is, are there specific geographies where there's a heavier lift ahead, Japan, Latin America, Europe, do those sort of extra attention to get you back to sort of that double-digit type growth rate? Or is it more broad-based than that?

Yes. Thanks for the question. So as we thought about our international business historically, we think that, that is something that can grow 12% to 15% over the long term. When I look back at the last 12 months, international was a bit more of a challenge. But what we've sought to do is go deeper in the countries that we operate in. We're not looking to suddenly add more countries to drive growth rate because we see ample ways to grow deeper where we're at. As I think about geographically, when I look at 2025, EMEA, specifically Western Europe and also some of the countries that Kyle commented on, were really integral to helping drive growth. We saw some more challenges was in the APAC region. You mentioned Japan. We have to get -- drive some continued growth there and drive some sustainability. Latam, as I think about the Latam region, there was some choppiness there. But I think as we exited 2025, looking at the international business overall, I think we're well poised going into 2026 to start to get back on track of that business. As I look ahead in 2026, I see that we have the ability to grow, but I think that growth will get better as we get further into the year.

Our next question comes from the line of Matt Miksic of Barclays.

Congrats again on a really strong finish to this year and strong guide. So one question on some of the leverage that you've been delivering. Just maybe if you could talk a little bit about where that's coming from and help us understand that a little bit better. And then second, just on competition and some of the strategic moves that other companies have made in the space. Anything you're feeling yet in terms of changing momentum around the Stryker divestiture or the planned J&J divestiture or anything you'd call out that tells you that sort of the tenor of competition is changing a little bit. But -- thanks so much for the questions and congrats again.

Thanks, Matt. This is Kyle. I'll take the first question and then pass it over to Keith for the second one. But just thinking about leverage and thinking about how our businesses are structured, we've historically said that our U.S. Spine, right, as that business goes, the rest of the business and down through the bottom line goes as well. And what we've seen as we've accelerated growth starting in Q2 and then Q3 and Q4, you've seen that business grow, and you've been able to see the margins come along with it. If you've gone back and you take a look at where we're seeing from a gross profit perspective, what we're seeing from an EBITDA and from an earnings per share perspective, you'll see it go as the base spine business grows. We have fixed cost leverage that we can get throughout COGS. You also see some of that within our G&A and then some of our non-variable commercial type structures, et cetera. But you really see it top to bottom across the board, and it really kind of follows as that U.S. Spine business grows.

Matt, the second part of the question, really the competitive landscape. I mean we've seen the competitive landscape evolve over the last year. You commented Stryker and some of the recent news with J&J and SENTINEL. As I think about that, we remain aware. But what's important to me is that our team stays focused on our internal objectives. When you think about Globus, we're continuing to invest in our spine portfolio. That's first and foremost. We still think we have best-in-class technology, and we want to drive successful robotic programs. Those things, I believe, make us hugely marketable as we go out and try to bring in competitive reps. And as I think about some of the changes that have occurred or are occurring, that, to me, creates opportunity for us to drive our business. But as I think about the leadership team and where we are, I want the team focused on the things that we need to accomplish because I believe if we accomplish them, the results will speak for themselves. I'm not seeing any, I would say, challenges as it relates to some of the competitive threats that are out there or competitive changes, but we continue to monitor it. But again, I want us to stay focused on the things that we need to do to drive our business because I believe that we're well positioned looking ahead.

Our next question comes from the line of Matt O'Brien of Piper Sandler.

This is Anna here for Matt. I wanted to touch on Nevro again. I mean, really impressed with the cost reductions we've seen. I'm just wondering how much more wood there is left to chop there. And how much more, I guess, optimization there is from a synergy perspective? And if it's possible that we see more synergies than originally anticipated like we did with NuVasive.

Thanks for the question. This is Kyle. So as we think about the Nevro business and where we expect to take it from here, right, we've been very active here over the first 3 quarters, 9 months or so from a synergy perspective, we focused mainly on the G&A bucket, removing those redundant costs that we could identify, whether through headcount or non-headcount-related costs. Those actions largely have taken place over a 9-month period here. As we move forward into 2026 and beyond, we're really pivoting towards how do we maintain the sales force and ultimately grow our sales volume. As we're able to grow the sales volume, we expect to get incremental leverage and see that profitability grow further. Something we have not focused on yet, but it is something that we want to continue to evaluate is just the manufacturing aspects of the business as well. Their COGS are about 68%, 69% -- gross profit 68% to 69% on average here over the past 9 months. That's somewhere where we think we can get some improvement on, not dramatic as making little tweaks here and there, but I don't see any large synergies really that we have out there to execute on the Nevro side.

Our next question comes from the line of Caitlin Cronin of Canaccord Genuity.

Starting with Enabling Tech, you already touched on it, but just wondering if you're still seeing elongated deals or time lines compressing there? And then just thinking about Nevro, which gives you access to the pain call point, how are you really thinking about your broader strategy to access lower acuity settings as more spine procedures move into these sites of care?

This is Keith. Appreciate the questions. So as I think about -- I'll answer the second part of your question first, Nevro and really the expansion. So Nevro brings us into smaller centers, more pain. I commented earlier that one of the things that we're going to focus on is driving the cross-sell of legacy Globus products with Nevro and pain. As we think about surgeons, pain surgeons that we've had come through Globus and really learn the business and really learn Nevro, there's been a lot of excitement to see that Nevro was paired with us because there's excitement on driving that cross-sell. I think it only bodes well for us as procedures migrate out of the hospital setting, more into an ASC setting or as procedures morph into a pain center. So we think that we're well positioned there. But as we think about 2026, the first point is really getting the business further stabilized and allowing us to drive the business forward with the products that they have in their core bag. Do you want to repeat the first part of your question again, Enabling Tech?

Yes, sure. Just on Enabling Tech, are you still seeing elongated deals? Or are the time lines compressing there?

I would say as we got to the back end of the year, especially in Q4, some of those deals that are out there from a pipeline perspective closed and you're starting to rebuild that pipeline going into Q1. The deals that we've started to work through from a quoting perspective in Q3 and Q4 are still there. As I look at Q1 where we're at, I'm encouraged by where we're at in the quarter. But consistent with history, the majority of capital deals closed towards the last couple of weeks of the month. I'm not hearing some of the concerns that I heard last year regarding spending, but I remain cautiously optimistic that we won't see quite as long of elongation as we did last year, especially given the fact that we're getting more flexible in how we're quoting the deals.

Our next question comes from the line of David Saxon of Needham & Company.

Congrats on the quarter. I wanted to ask about gross margins. You talked about the path to mid-70s. In '26 round numbers, you're looking at 1 to 2 points of gross margin expansion. So is that a good annual run rate to get to mid-70s or any dynamics in '26 that's driving more of an accelerated benefit? And then just a question or 2 ago, you talked about Nevro manufacturing. Do you need to do anything to that footprint to get to the mid-70s? Or would that be upside?

Thanks, David. This is Kyle. I'll take your question. As we think about what we kind of stepped out and messaged back in 2024 into 2025 and what our expectation was in terms of growing that margin, we thought by working through some of our manufacturing initiatives, right, we'd placed the order for CapEx. We'd bring in and in-source some of our manufacturing, and we'd see a bump here at the tail end of 2025 and in through 2026 from a gross profit perspective. What we've actually seen is that, that that process has been sequentially better quarter after quarter. And if you go back to our prepared remarks, we both touched on 6 sequential quarters in terms of gross profit improvement. And you can see it's kind of steady as you go as you work your way through quarter after quarter. We're seeing those improvements come through. We're seeing different things that we are attacking and driving in order to make those improvements. But I think 2026 is going to be more of the same where we see a little bit of incremental benefit as you kind of work through the year, ultimately working your way into that 69% to 70% range for the full year. My expectation is as you get to the back half of the year, you'll touch that 70% range and get into the low 70s. And then I think it's beyond that when you see the step back into that mid-70s, which we've always kind of classified as starting as the 72% range.

As it relates to Nevro and manufacturing, I don't see any large-scale changes that we need to make specifically. As you think about bringing them into the fold with Globus, really, we're focused #1, on spending. So it gets back to very basic things of how are you doing your 4-wall spending? Are there ways to drive efficiencies on the manufacturing footprint? How do you really monitor output? How do you monitor efficiency? Those are ways to get better fixed cost coverage. And then secondly, how are we buying? You think about making sure that you're bringing raw materials into the business, are we buying smart in a way that allows us to produce most effectively in our production facilities. We see opportunity to expand the gross margin, which touches on some of what Kyle said earlier, but I wouldn't say that we need a massive scale change on that business to get that improved profitability.

Great. That was super helpful. And then my second question, just on ExcelsiusFlex. Would love to get an update there. How are placements going if you've made any? And then how are you thinking about the StelKast implant portfolio and potential growth of that part of the business?

Thank you. So as I think about 2026, I'm not expecting EFlex to be a major contributor to revenue. As I think about the portfolio, from a joint perspective, we have the knee and the uni as it relates to primary joints. We have a hip except for tri-taper. And when I think about revision joints, we're expecting to have hip and knee at the end of 2026. So we're still continuing to modernize the portfolio. But as we modernize that the portfolios, we're coming to market with the robot, and I think that will bode well really as we get later into the year.

Our next question comes from the line of Ryan Zimmerman of BTIG.

Congrats guys on a strong end of the year. Maybe when we think about the composition of guidance, I'm wondering if you could speak a little bit to it, Keith and Kyle. I mean if I think about Nevro kind of being in a similar vein to the way it was running and Enabling Tech doing the way it's been going, which has been stronger in the back half of 2025, it does suggest kind of a slowdown in kind of legacy musculoskeletal growth. Relative to what we've seen so far in 2025, I think it implied around mid-single digits. And I think Shagun was asking this question as well, but why would it slow down if you're not seeing necessarily that slowdown anecdotally into Q1? Or why guide to that extent? Because I guess by my math, it implies kind of a mid-single-digit growth rate on legacy musco, ex-Nevro and ex-Enabling Tech.

Thanks, Ryan. This is Keith. So as I think about the Nevro business, I commented that in the short term, you could see additional lumpiness in that business. So I don't expect that business just to suddenly drive growth in a linear fashion as we move forward. I'm still expecting choppiness as we get into 2026. As it relates to Enabling Tech, Kyle commented on earlier, as you think about us getting more aggressive with how we place capital, some of those deals may be operating lease in nature, which might not have the immediate rev rec pop right upfront. So you might be moving units but not seeing the same sales dollars if you're trying to look at this apples-to-apples. So that's something that we will -- that we contemplated in guide for 2026. As you think about the core business, the core spine business, I remain very optimistic about where this business is. We've had really 2 strong quarters coming off the back half of 2025. I'm encouraged by what I see in 2026. International, I think, is a story that gets better throughout the year, and our trauma business continues to perform. So as I think about how the business came together from an overall guide, I'm comfortable. I believe our numbers are achievable. We maintain globus conservatism, but I feel that our numbers are achievable given what we see coming at us.

Yes. Okay. And then maybe for Kyle, we've talked -- you guys -- legacy Globus EBITDA margins are second to none, right? They're very strong. When I think about that, though, in the context of the need to invest more in R&D, I appreciate that gross margins are moving higher, which helps to offset some of that. But maybe, Kyle, you can speak to kind of how you think about potentially taking those adjusted EBITDA margins higher if you can? Or is this kind of the steady state where we should think about adjusted EBITDA margins and some of the components are moving around to get you to that point going forward?

Yes. And I think it's in our prepared remarks where we were calling out the plan to invest heavier in R&D. So we see the benefit in terms of what's come through from an EBITDA perspective, working our way back to that mid-30s EBITDA that Globus has always been known for. But as you saw in our prepared remarks, R&D for the year is down to 5%. We want to ramp up spend there, get back into that 5%, into the 6% in terms of range of spend. And really, we want to invest kind of across the board, all of our businesses, whether that's spine, whether that's trauma, whether that's capital, et cetera, really invest back into the business. That's really the main reason that we've always prided ourselves on those margins is so that we could take that cash and invest it back in ourselves.

Our next question comes from the line of Keith Hinton of Freedom Capital Markets.

Just one high-level question and then kind of a housekeeping one. Starting off with Enabling Tech. When we think about more leases or pay-per-use or kind of creative financing, maybe this year, that results in somewhat of a hiccup. But as we start to think more longer term, do you see an increase in those leases or pay-per-use contracts resulting in that revenue starting to smooth out, become less lumpy, start to track seasonality more in line with the MSK business? Or would you expect that to still continue to be a business that is quite lumpy?

Thanks for the question, Keith. So as I think about that, the first year that you're really pushing operating leases, you're going to definitely see lumpiness until you get a base underneath you. But as that business looks to move forward, you should expect to see some of that smoothing out, #1. But #2, as I commented on earlier, I expect to see the flywheel effect because when we have greater robots out there in an operating lease format, the offset to that is really driving spine implant pull-through. So it's important that as we increase the volume of placements out there of robots, it's important those programs get launched and that we're continually driving and sustaining those programs because the offshoot should be stronger implant growth.

Great. That's helpful. And then more on the housekeeping side. Just any -- and apologies if I missed this in the prepared remarks, but any expected changes in any working capital metrics, CapEx, things like that, that might meaningfully sort of change the relationship between EBITDA and free cash flow over the next couple of years? And any thoughts on plans to deploy the increase in cash balance?

No. Yes, no changes to what we've been stating here historically. We expect CapEx to be in the range of 5% to 6% of sales. That's right in line with what we did this year. We continue to prioritize cash spend on product development as well as inventory and sets for our field and manufacturing in terms of being able to continue to vertically integrate within the business. We'll continue to look at share repurchases when the time is right, and we'll also continue to look at tuck-in M&A here and there if we find the right technology out there, but no changes to that.

Our next question comes from the line of Tom Stephan of Stifel.

Apologies if these have been asked, jumping around calls. But I wanted to ask about the 2026, call it, U.S. Spine surgery environment, a lot of changes with CMS, reimbursement site of care, et cetera, that may or may not impact surgical volumes here in the U.S. So Keith, can you maybe flesh out for us the main, call it, market-related headwinds and tailwinds that we should be cognizant of? And how would you characterize your general outlook on U.S. surgical volumes in this year, in '26?

So thanks for the question. As I think about the overall market, I think the market is growing low single digits. So I still continue to believe that we're growing well above the market. Dynamics of -- the competitive dynamics, obviously, are out there, we still feel that we have the ability to address and find ways to grow. As I think about just the general landscape of the market and how the market continues to evolve, I believe that we're really well positioned. As I think about some of the initiatives that are out there, I see some of them, but I don't really see them having an impact on the business longer term. And as we think about as the business starts to migrate maybe further out of the hospital into the ASC setting, I think we have the portfolio to be able to respond to that and really come at this really with a complete suite of products, not only just the spine implants, but also the Enabling Technologies. So all in all, I think we're well positioned, and I still think we're well positioned to grow above market.

With no further questions, that concludes the Globus Medical earnings call. Thank you for participating. You may now disconnect.