Nuvasive (NUVA) 24 Feb 222021 Q4 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the NuVasive Fourth Quarter and Full Year 2021 Earnings Conference Call. I would now like to introduce your host for today's call, Ms. Juliet Cunningham, Vice President of Investor Relations at NuVasive. Please go ahead, Ms. Cunningham.

begin. may You

afternoon, Good Thank everyone. you.

and and Joining me Matt and overview will Chief business quarter Officer; review our results Chris Harbaugh, are of and Chief and fourth an Barry, Matt provide Financial Executive will XXXX financial today Officer. trends year full detailed NuVasive's results Chris guidance. on we'll IR a issued is X-K on the question-and-answer this our SEC. earlier The earnings and afternoon, filed Then XXXX session. of has our with the website section financial Form we host been release, which posted

supplemental have also information We website. IR posted financial on our

As is IR archive website reminder, recorded our will today. and a an this call later on be available being

forward-looking to you implied in which to law. on I'd to looking we The based prove speak differ results as are or materially the by such Except materially that no comments release assume of differ risks as to statements, could forward current respective cause cause described started, expectations, Before those correct, and actual include SEC. or do results uncertainties, they looking that NuVasive to factors, periodic their which factors filings forward required and update with remind other which news any We get obligation new statements. statements by be assumptions, and could information expressed date. involve are during like or our materialize and if will this from call actual

release like the IR NuVasive measures, information of most comparable Chris are are And directly section In which today's included measures introduce addition, include the Barry. the and now to website. from supplemental this these GAAP measures GAAP in call I'd of of non earnings reconciliations to will both accessible certain financial financial in

deliver reported quarter about why I'll today's as XXXX our to Matt of you, commercial and full details we an updates financial fourth XXXX financial year XXXX product Earlier share On provide additional XXXX, and I'm good as innovation the afternoon, and our growth excited on performance call, results. year will value. well fourth and full including Julie, progress and guidance. shareholder overview today, Thank and everyone. XXXX quarter

Our progress to quarter portfolio advancing reflects how XXXX I'm accelerate product our excited in product introductions and the new our XXXX the how market-leading fourth company growth are have in past years the investments and us positioned strategy. during and beyond. about three over

$X.XXX prior business. basis reported we X.X% the on For year, business and sales year. billion, surgical the our support performance U.S. X.X% or full strong came Spinal our delivered international at lines and compared a increase to basis challenging in In XXXX U.S. currency Hardware constant a a of our net environment, in an on grew

reflects business Specifically, the growth which strategic our our spine Asia-Pacific, key Europe delivered double-digit year, core progress and globalize for markets. in to America business Latin in our

with less the surgeons surgery, in grow flexibility and spine from continued solutions differentiated In procedurally NuVasive. patient we innovation any pathology deliver international that to market enabling share, As before, the share invasive And saw growth. to to you extend strategy leadership less I've shared we we us in during drive historically surgery, into business. invest any technology treat our had progress provide where to all have fourth procedural have our make integrated vectors underrepresented in subsegments take our comprehensive on position offering, multiple invasive quarter,

million for seen surgery. $X.X our about expandable anterior interbody XLIF, column In evidence, next-generation interior subsegments. support a And spine research from posterior is This and our interbody science, and is clinical lateral development spine area surgery we'll clinically lateral industry's in position. only years manufactured position or portfolio solutions excited the extend A clinical XXXX our with ALIF. now MODX procedure $XXX lateral the evaluations introductions, begin within market proven of of We've and XX growth with XLIF, single we're team, X and leadership our Modulus address prone X access we surgeon ALIF the and positioned XXXX. expandable focus are including in well training for the help procedure. from and Our materials latest advanced from ALIF, billion market in posterior leader increased continued are key lateral ALIF new validated the product we technology to through

less new our of posterior our XXXX. lumbar procedures, retractor expect system expandable scheduled the to help XPL, TLIF These portfolio, interbody portfolio. is our procedures, next-generation growth to tubular infusion for begin XXXX designed in launch and feature market-leading from invasive will in extend clinical technologies a system, in decompression we're tube half XXXX. also We support expanding The technologies. offerings to NuVasive posterior MOD second evaluations our

investments Our subsegment in growth cervical billion $X.X XXXX. deliver off in to the paid

column for and Our quarter fourth CXXX growth well plating has been Simplify portfolio The and delivered year our expectations partners, pleased we net disc Simplify cervical surgeon both double-digit our received full sales to in anterior XXXX. exceeded and by the the in system. by NuVasive led initial I'm Disc NuVasive XXXX, announce

our Simplify we've the for expect supply growth technology. With highly this Disc capacity and future now chain, expanded differentiated integrated into

our builds fixation versatility system, Simplify procedural comprehensive Reliant Cervical, third one most current our, approval to the cervical investments our most cervical to With platform. global portfolio, additional system, XXXX. ACP simplify posterior PMA initial a Reliant we our in received have to We extend approvals we late needed Reline launch to expect manufacturing expect continued assembly our we which provided strong and we from spine's and of PMA a on move the and innovative the manufacturing market, Pulse fixation Cervical, portfolio. FDA To facility Cervical cervical with unique future world-class compatibility offering the systems system and the further and in fixation technologies packaging, performance Our XXXX. industry's capability have for Disc operations. integrate anticipate next-generation quarter of create to into up Reliant

key see the continues commercial of European ability hardware that utilize workflow of to of XXX% of surgery contracts Pulse quarter launch and Moving into and single in to achieve Pulse's the its single and running received technologies United Pulse's purchase, deliver cases capital partners integrates single and fixed room to in States in and commercial provides clinical and a nature following surgeons utility surgeon staff. financial and unique testing third add software the the accuracy software significantly future rates The of sites the With initial operational, technologies seamless equipment partners and unit from improved first screens, customer in our XXXX, multiple reduced integrated shows other for the providers quarter across and that surgeon footprint multiple enabling on first platform. Financially, technology. maximizes operating X error Pulse to the increased providing investment. our platform up efficiency technologies. The XXXX. value ecosystem is hospitals hospital's procedure, clinically, device a third-party spine milestones surgical a connectivity will provides are integrate lower helping the with outcomes. with navigation extensible NuVasive systems multiple Operationally, And the Pulse's wireless Through internal can applications navigation platform market. lean the an than platform. the

include States, in the R&D Pulse XD launching CEO are for to in further increases growing system United customer with value portfolio. Our mobile pipeline XXXX. capabilities is upgrades teams C-arm the value entire system of commercial software the Spin in procedural completing Healthineers The second integration release quarter the remote additional Asia-Pacific. the release and platform, reflected platform proposition next the the across go-live improve of upcoming spine Siemens level global support will Europe software efforts. The our of Pulse in and

As define operations International the growth disciplined company the will of potential much we to change to help through past execution. and future for be continues significant spine of the today a who contributor and the are platform XLIF our success, care. Pulse commercial procedure the has redefine

company growth we international recently globally, report, the our And first we We safe around and environmental actions make recognize ESG healthy, business to to we a to the we and the the core spine employees three of our are focused to see our commitment Specialized our as portfolio, by foundation more our Orthopedics market NuVasive from to to joined do, closing, continuing environmental, ago, from our we continue to to report, world. expect in as In on business were our we In outlines us. spine. XXXX, which led governance we Europe, our that and win. social our Japan and To be We support impact manage discuss the return must the minimize and ethically published give I single teams difference responsibly in have our communities. we geographies. lay sustainability mindful keep efforts. world will subsegment are our key I as well taken to continued on social in company's advance work the which back When around Asia-Pacific and we impact efforts, we've a grow know we we mission of well have and to many positioned responsibility to believe primarily years our

industry's and our integrated beyond future with We spine portfolio possess surgery. a we of and solutions. and most as the company are vectors in up comprehensive define of evolution help continue set evolved now procedurally the growth We've multiple as XXXX of will

surgery highly and differentiated our in purposeful complemented by further made that enabling have spine anterior, posterior We investments to cervical is technology. and ensure portfolio

and R&D, Our we subsegments historically in line target been have are underrepresented. efforts commercial marketing to where

reflects innovation. I'm towards through software-related density. organization in year. leadership pipeline R&D has challenging commercial our infrastructure of an our shift increasing And increase Our company's and breakthrough response to customer place another proud and the

spine to growing potential and the organization can't to critical deliver COVID-XX of market value as be I and best-in-class these executing control response the and plan in that XXXX product subsegment. the unknown, we to our commercial of years to the platform control through portfolio, in successful how introductions macro end, lead To each XXXX can pipeline remain believe the Pulse our on we we strategic utilization on plan across growth strategic our investments impact focused paying environment, and off While shareholder are times. continues through come. and We CXXX for future

Now I'll turn the call over Matt. to

major and on product walk and year commentary will drivers, of XXXX full will quarter focus comments and you our Today, Chris, overview our high-level also results my guidance. XXXX financial afternoon, through beginning I a financial lines. with fourth Thanks, good everyone. and our I

detailed have press provided been results today's Our financial in release.

a we international XXXX currency the $XXX.X United as to compared in elective full X.X% $XXX.X our year. staffing restrictions constant double-digit basis of increase X.X% as X.X% period constant the the product prior constant in Full compared the X.X% in discussing is our continued the reconciliations. led one-fourth of nearly will and on $XXX.X the of Japan fourth will and an continued shortages of year color XXXX for saw a to I XXXX momentum to be increase both by remarks, of net period. sales quarter measures basis on GAAP bit a a to primarily due compared $XX.X refer basis and increase non-GAAP year and year results on the X.X% net on the the COVID-XX by provide million net Europe including Latin headwinds, disc. and grew reported prior quarter portfolio, year. billion were XX.X% billion, non-GAAP million, COVID-related were introductions, Pulse declined period. reported Notably, of sales for our growth. my growth our the of positive currency our These cervical International reported our innovative in as year sales slightly on total surgeries. XXXX now and on to fourth press XXXX performance XX.X% an products reported Both $X.XXX prior a company these cervical sales quarter million, year to new year platform an quarter for basis prior the and compared the business compared to fourth particular. release sales and you full due impact were currency During later. of on posting were additional net currency Total these Simplify net constant elective $X.XX outside reflected during sales. and prior hospital to continued Asia-Pacific, America net I procedures the Despite million of States, fourth International as driven X.X% and

we the discussed call, net availability the During quarter our product impacted earnings Orthopedics third particularly NuVasive for quarter, our United specialized sales outside how States. negatively of

majority that market. During the began in to fourth titanium of I'm now precise the report back pleased we products key our quarter, we returning to are And geographies.

X.X% in Now our sales year were to to million from net representing Hardware a the some period. share of net compared I'd lines. an key of fourth XXXX, $XXX.X XX% quarter the cervical quarter compared year hardware, franchise of $XXX.X Full Within spinal product Spinal highlights sales like period. prior U.S. U.S. was the were prior spot with our prior increase bright million, sales growth continued X.X% a to year. in the increase compared to the fourth year net U.S.

since cervical to well Support Pulse Pulse the Cervical and we performed which to full for represented Notably, of net of $XX.X report X.X% are quarter full primarily during the our exceeded grew Pulse growth the quarter the year, full sales million the pleased XX.X%, QX sales year Disc. commercialized expectations first the was sales net our for year the the to net Surgical platform. net For full U.S. fourth we period, fourth compared we were sales in and platform. prior expectations exceeded year quarter, sales. very due Simplify original

we net sales Chris strong Importantly, mentioned a as building pipeline are future global for previously. growth,

Non-GAAP to million $XXX.X Turning in the now the fourth operating gross to in period. quarter year million profit $XXX.X was compared prior highlights.

compared year, XX.X%, to increase increase an was XXXX Non-GAAP For quarter an XX.X% the of inventory approximately XX year fourth was $XXX.X expenses XX% of XXXX was of commercial higher as compared year-over-year in our core a prior continue million, increased and the invest in XXXX improvement and year was spine of in period. XXXX, full $XXX.X XX.X% gross year to to travel portfolio. we the compared a operating negative to and $XXX.X increase in an This million period. margin million in labor Pulse quarter the of prior R&D prior in $XX.X $XXX.X increased million primarily a Pulse margin non-GAAP basis, for investments non-GAAP operating Non-GAAP charges. platform, by On fourth increase expenses million compared to by the to the prior quarter the period. X.X% compared $XXX.X basis, positive the our in were GAAP to freight quarter full basis of On gross year-over-year we million the in million, profit prior the points for compared costs of expenses. expenses X.X% margin to fourth $XXX.X decrease year. The were period. primarily The operating driven the prior $XX.X reported year. robotics non-GAAP driven Fourth in million year year channel, in operating

XXXX, million of expenses operating which, quarter recorded Medical impact a Simplify negative fourth had a the and of in an turn, the on charge contingent consideration margin. the liabilities for During with we associated GAAP $XX.X in acquisition, GAAP our operating increase

XXXX, the based each and XXXX upfront future included remaining Our as products acquisition years from as technology Medical well sales The of the Simplify payable incorporating payments milestone milestone are consideration payments. in are of Simplify net on and Medical XXXX.

to was The increased to fourth other in income quarter in for of in our primarily of year-over-year from basis, losses, primarily technology are with compared margin Simplify performance year. in full partially compared we operating XX.X%, period. prior margin the XXXX basis, R&D XXX continued basis the a million and for investments as pleased year-over-year Fourth in and prior non-GAAP and year. compared to expense which cost supply in forecast future to foreign increase higher declined negative in accordingly. gains. to XX.X% X.X% basis increased the the Simplify efficiency This indicated, prospects margin points expense driven X.X% XX.X% currencies. full year cervical we updated decrease from and were the decline by attributable non-GAAP As this American disc, $X.X prior million unrealized addition primarily positive sales period. was $X.X On of XX.X% the the offset operating On the basis commercial to points a by GAAP by expense currency operating innovative Latin Non-GAAP well year prior to Chris of commercial, sales very XXX chain by as points infrastructure, XXX quarter was year a medical year

rate losses and was XXXX, primarily the expense income in due million to XXXX year quarter non-GAAP year was other $XX.X full the compared the tax in fourth $X.X effective period, expense. million of Non-GAAP jurisdictions $X.X versus expense of to prior year For tax an of of in in million tax prior associated tax without rate XX.X%, resulting benefits. the XX%

in of for acquisition quarter net a increase $XX.X per of discussed $XX.X earnings per tax fourth share or year On This as liabilities to period. diluted diluted earlier. of On diluted of non-GAAP compared For $X.XX largely basis, $X.XX income of in XX.X%. diluted compared loss income the share the effective was we the per the per of in the $X.XX or full by million earnings year our million prior quarter a or fourth net basis, a the income $X.X $X.XX XXXX, net share net net reported of contingent GAAP to driven earnings million reported rate was we share prior loss consideration of million Simplify period. year or $XX.X Medical

per was year of For GAAP reported the per net of loss the by diluted million consideration contingent GAAP or prior loss Simplify net diluted $XX.X XXXX non-GAAP $XX.X largely liability a earnings basis, per to $X.XX million a $X.XX XXXX charges million loss net of XXXX, income as share quarter The share the as diluted income $XX.X compared year. full in as we call. loss a on or million of we loss withdrawals reported the discussed earnings increase NSO net to $X.XX of driven with share $X.XX of in or associated per product of year. $XX.X diluted share well year compared full of On prior earnings net inventory or third net our

flow. to Turning cash

Our income free decrease and working cash $XX.X XXXX The million primarily versus the net year capital flow lower driven was was for the million $XX.X fourth prior timing. quarter period. in of by

For the $XX.X full to year. we million year flow XXXX, in million $XX.X prior cash of the generated free compared

with remains of of equivalents cash sheet as in XXXX, XXXX. strong cash balance XX, $XXX.X December Our and million

Our undrawn. $XXX million revolving facility credit remains

business financial we the in we're the three investments At our fruition. to and environment same year guidance. have health as care great past the made to to related say XXXX full to pressure. we our and which over COVID come expect increasing I'm Turning as the time, we well years pleased confidence inflationary in volatile have operating issues with staffing recognize

phasing back typical constant we worldwide growth impact than X% of lower down to currently factors, launches to guiding weighted growth full the basis. Simplify sales full expect last seasonality, ramping those approximately bit we XX% historically of half currency after in be perspective, basis, XXXX quarter a are Given to further, year on reported X% This net sales XXXX X% first net We we been for On XXX for fourth due the sequentially a points X% X% more from and to foreign product a their XXXX. of throughout expect year to the Drilling between negative inclusive expect is has basis year. currency year. which quarter Pulse to compared levels. a

seasonally beyond. third XXXX of top to strong realize solid and Also, innovation, our to in products especially competitive in international in quarter. growth R&D the growth will NSO the drive continue in and we to business line expect to returning differentiation We benefit market, invest in

in training as non-GAAP a in we to spending, inflation-related reflects the Turning and travel of surgeon to expect XX% well range normalized level XX.X%, as return margin, to of particularly impacts. a operating which

remain to to in of COVID The operating but costs. that earnings related Finally, operating appropriately XXXX, per range our to levels. pre-COVID to modest our $X.XX. normalized guidance as in focused $X.XX return health We range it conservative on the believe we assumes throughout inflation us a impact and will margins the care expect improving gradually We is shortages non-GAAP of our improve end guidance share supply assumes and year. from staffing chain remain high with our

innovations Day. intend we as and full-line growth time despite that, in XXXX our over our macro To grow platform the we company Analyst have conditions, and Beyond targets spine operating such conclude, the at with provide believe for our to margins Pulse we positioned CXXX. portfolio XXXX we'll updated including

of to We the we're excited opportunities ready our every the Q&A about market achieve from dedication and front change help us, the continued in to we us contribution mission begin life Operator, session. to and a team are patient's appreciate NuVasive minute. the

[Operator Josh first of comes the question Our Jennings with Instructions] line from Cowen.

You may question. proceed your with

better including questions shapes that And understand to the such as just one some other I the upgrades in kind of XXXX. upgrades appreciate for on I had of integration, and I you And on Chris, procedural follow-up. I software that road to wanted up two kind Pulse. this to have module, I the system of I guidance mentioned year? were front detailed any robotics know how wanted just and of map XXXX download then -- the TAP.

Thanks, in were and go of progress in From made on on some software Yes. obviously in get-go, that series we somewhat perpetuity Excited will the early upgrades about Josh. a the of we feedback. the we forward potentially integrating as or more the your value map of to then more Ahead add system. to navigated the point, upgrade. instrumentation move software as are as within we procedural road look more instrumentation, us Pulse

lot on the annual So of a basis we'll functionality new likely upgrade to and add system. an into

and First then it one in talk software applications at we'll from more we move that this as year. And there, to happen hardware-related continue later will We'll about forward. time. add

And Pulse. Great. a just on then follow-up

the beyond? how XXXX? surgeons? effect should set fruit mean I hardware customers? I up filling could be and in really attracting you here surgeon the low-hanging new today? the is very these of guidance systems? that that, understand you are days in the help are of the -- effect the in is Can pipeline -- mix still early Just you've halo Just thinking Or going early Pulse about thinking early guess, are with, to in pull-through the we Or our about us the days launch. is success the you Pulse NuVasive assumption loyalist and And top of XXXX had and just pipeline is that occur placing launch how guys and curious in you the that or that be XXXX deliver thinking was pull-through about of surgeons will effect with kind on

Yes. want to said, technology. flexible Thanks, Josh. pull-through. days, sales. It's I the along, Early been majority little an to to this be primarily calculate create so all possible of as as said we've being we customers seen early really opportunity for access far what a our to That

clearly trying that We're to know the So measuring halo a every know anything monitoring we're early sense. it's a but like. if I system there, look to on? you little it's on. , comment placed seeing We get what Matt to else have will and and effect end, better don't

in U.S. obvious. going is hardware. the are internally it that through so everyone's we're out go going. though pull-through repulse the But Any going to saying to going that to get there, just we Josh, support clear track Yes, U.S. spinal is

So enough for a changes of year, numbers. at it's for get that least And and this last but both QX we're year. as tracking we not throughout hope we conversation, those

of mix other oil? on or in details any surgeons the ordered either are the then that just And Great.

have that been in involved us Yes. of been the primarily past. lot the There's It's been with on side. folks front a

bit would story. pipeline has We're Pulse We're little new introducing it the a new experience users. the labs. different technology been to though, reflects I center looking So the say bring to in to users some.

good been early with months. to -- we adopters users done customers really over first go we've couple of both we the first forward, test as and want new customers. there a But it's reason familiar is as last So or existing of more the early and have of that because a project our is mix folks were for some the of

So we but evolve as that's what the will next today. quarters, couple in forward we of see it move

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

Drew is for on This Matt.

both at wide looking you're today, line. providing Just and providing guidance the you're on line pretty a the bottom the top range

and baked So line you but as range the I maybe couple of there. I'm walk part us the each case on assuming end goes, assumed of shortages and different it all that a little you've a that in base range of you're could far through bit how stuff around and you about you thinking of that that assumptions the scenarios have kind know COVID bottom into each staffing as range? touched maybe

we a Drew. and I'll give the turn we take solid specifics. I'll solid quarter Thanks, last to Matt over the were performance. of came more to it, But out it -- believe very 'XX

ready We continue vectors developing to we're execute growth, against as on progress of make things. to a about a our talked strategic with now plan we lot of those lot multiple

the of look reflects shortages, we've although last reflects we is I couple other which of of couple the And know it haven't over these that staffing We product of a I the situations runway, subsided, and QX continue infection function non-COVID reality, to pressures, quarters. things that opportunities infection progress -- developed since next I think also a in impacted been the inflationary a the really of the durability XXXX. of years. guidance at growth over play the our -- rate see that quarter can but out that's other by volumes, And those somewhat against don't our how COVID international I made have these drop, sort rates see significant there had progress but I

we've reflects we're guidance positives the our the what reality of what environment. but sort I still of think So of the developed, facing in

have you uncertainty. Matt, But any? a So little do

small basis, add X% a new X% just to other product net numbers that and constant I'd number from and on in currency of Chris Yes, of or a products grow of we sales we we're which talked those Simplify say that we ALIF, guidance to XLIF, that TLIF. Plus expecting year, hope how that Modulus this half include, we're But Pulse. it but years. introductions, come the about future in also internally. in would to to I obviously, talked year, the launching growth new would X% gave look about is He about prepared the X% at minus, this Cohere really remarks, the

new the a and and then in Spine from the product U.S. is international half about So some really execution, third quarter event. NSO which introductions is growth from other then half Core return, continued

be So do a that we sequentially. QX like thinking tough to specifically, remarks We is that of say we're had a down the that's we'll in other one about I the how we guidance. did. issuing The for of XX% though, thing highlight, think did kind X% want companies lot prepared to

And to we see so the quarters, we the that, not future but particularly year. of were will in in half back pickups immune

next question Stifel. of line from comes the Our Blackman with Matthew

proceed may question. your You with

so to follow-up. one year-over-year gross the items think is Maybe And is Matt, of sort And guide. how to quantify of SG&A? you directional supply it drag line about more much operating I've margin got start, leverage? there chain way any a the to concentrated it and the color more baked the margin inflation on to Is than one in get Or those Is others? one how expect any balanced on of into across guide? and

Sure.

supply were to that this So through in see for here year, Matt, about given that what guidance we've cost. in that accounted in an here. we we we chain. did key And was last the able is our absorb But efficiencies previous we've we uptick freight the saw talked calls, in that

So didn't quarter throughout know, at it notable. or margin were was we last you you at sales year, of which you profit percent gross a as for as this see came in really XX%, gross our looking if

a an that From SG&A we're COVID SG&A our of relates the to but be to to inflationary through certainly perspective, we lingering improvement. So costs. as inflationary seeing watch still anticipating We launches. then I'm going on bit kind think of we're it employees. remember, a those as close the we gross for we're our on profile. margin Matt, say And and uncertainty, we're of compensation still manifest are running Obviously, have some a P&L, in lot itself we I keeping still would still offset of able pressure pressures, product see

we've a we've want accounted room reason but ourselves make think we we large range the we to here for sure we since those of all so some given, in that's And the give because gave it why on higher. The be years, to probably the is about not degree will R&D. to that the item final in you're in same early has it line year. growing but still curious be past going it's guidance It's

probably and multiply can here it zone. You we take $XX quarter the and did by in the the in you're X, first million

bit more of And on Simplify I appreciate the performance a hoping broader a spent follow-up, of the obvious reasons. time to I Chris, that. CXXX portfolio. talking my color we little for lot then about was get

tracking to color what portfolio it point? where the any growth Or is in this if any Just So excluding you portfolio of talk helpful? rest way generally on performing, CXXX is just to how the the it'd to portfolio would at is Simplify? even be the thought be

broader to I talked CXXX don't greater cervical say would introducing the is seeing I good And be year. this about, parts. portfolio. just Simplify the but sum we it, doors to that now later open we'll the as We're exclude than

So Simplify a some been all talked that we're got the of as against to specifically some we from the we talked the prepared by the of durable that our has do year. forward all, well to schedule. about we and this plan about received executing growth earlier, chain It's we've remarks. course We're think integration perspective over customers. We've of now, in highlight. I've of get-go, been ahead completed a looking that in supply

feel the of portfolio we think the competitive it's in cervical got portfolio, got We've the we broad to believe the cervical and the end opportunity a we good but the day, most market. So very lot plays well, very execute, at of we portfolio. about

the it's I only is to thing amazing would other landscape. a year Yes, change add Matt, quite that how the can

that for predicted the cervical in yes, analysts have together deliver there, asked we cervical but these On is coming why is in were the repeating, portfolio, for XX% up a is said part year being full were fourth we alone, Simplify quarter prepared would as X those but back the fourth call XX.X%. struggling? all ago. and for XX%. in not fantastic last about tandem that year absolutely I results. is And the year, quarter XX% were we remarks, portfolio year-over-year we up quarter of to earnings by of in But a the on basis worth And And

question of Crédit from with Miksic Matt next Our comes the line Suisse.

You your question. may proceed with

quarter bunch pretty really a a on on impressive Congrats of different drivers.

just So then could, I follow-up your question, on I had one if comments, Pulse. on on Chris, and ALIF a

And by on there, pun one about you I that? XXXX. that I is driving what's And in you has? driven expand it sort happening, ALIF, but what guess, of follow-up. of on your that? been So mentioned notable business intended, talk Could runway guess, what your part what have I leadership I of mean part to else kind is runway

a in We're our be procedure talking company house of the our -- was much Thanks, evolution more portfolio subsegment. the that about, Obviously, with early of Matt. near adjacency of to of been anterior comprehensive most spine to all that has million stage player. we've the disruptor broadening from space, exit we kind $XXX The been to sort as Yes. XLIF ALIF.

So familiarity think on pronounced Obviously, that XLIF, of moved I very used a lot had with procedure. part. to ALIF the over played surgeons certain us really, now a

the year. as impressive I this lateral over part with of launches launching year. as played think, surgeons, I prone course And in our I be to coming more invigorated got XLIF the education the Our key think, on XLIF, will forward. dealing the an well as approach a access We've procedure look growth.

space. So anterior we've a lot coming got the in

to lead complementing by to perspective very our We're anterior. and everybody broader and enabling ability no complement anterior in and continue from that tech we means, we're But no introducing with make are, to leadership the and to away share obviously understands by cervical bullish We posterior on means, are in portfolio. our space. our sure moving this, take

folks get with exposure. navigation maybe and out a lots pull not then lot the launch obviously a how of things what is addition preferred a on were ahead or companies times, there driver many contracting of of other about technology I'd and on and think Pulse. this the the that follow-up -- like a for got in we model navigation, There's not other of the to with the you contracting economic -- few then the That's pricing, you sense And couple great. of being key what about launch the questions to talked reduce things be navigation here? sort lead being system? purchase just -- just A And to x-ray love of what any will integrated is around

Yes.

So looking model. it us, enough I preferred we And know to we'll that we the from don't we're from wants to clearly question take say -- at have came of have pull-through purchase. Clearly, someone the earlier from better But beneficial a to definitely buy Josh kind early financial help be will think that the cases. to so spine XXX% scenario, our is most still days. us what's we are Pulse the models our around that in it's goal get of Again, understand used outright company. to

sort over are us of of we of a to beneficial access easy over more models to period people this the time. know quarters for next probably it to couple make that We'll the most financial and of want So technology.

our the is several week, love add the the that That's more of think more certain technology. we Bendini workflow and we actually extend to -- main driver it. Lessray, do have to aspect has a really work had driver. resonated the what and they mean synergies the Navigation, over as interface, really on to you exciting talk accessibility about As clearly, extensible, chance technology to can surgeons as this and a described, and proposition talk customers. incorporated I we I've all love it Bandini, starts the user into Lessray applications last the of down and which to comes still of surgeons that been with We the far I as represents. surgeons value further have single that certain

and from to So of resonate voices hear coming there's integration components, but different different the almost to technology customers, different from seems our universally, continue that customers. with the we

comes question Shagun of with the next from RBC Singh Capital line Our Markets.

question. You with proceed may your

half QX? you I think items Pulse you is mentioned curious just new the guys, Simplify and What sales in assuming what So it but in guidance? product other of your includes it were introductions, are well. And other that the curious then XXXX relative sales our I'm we track. coming backlog lost to NuVasive backlog. had out the as By 'XX or and largest one of companies of about math,

the on guidance of didn't inflation, assuming for inflation you And in impact lastly, are your just that? what on margins. quantify So you I hear

that, you helpful? If could do be that would

Sure.

say achieve then that externally early here to feel of net a take that was were Simplify, that to free and those we those. $X out Pulse Chris, both jump on shot to in million we goal year, regard in. to products. We I'll With clear and sales for last of the exceeded So each put

With growth that's of point hosting that For appreciate manifesting we growth the really, you're that CXXX missing Pulse, you only because itself. about we're Pulse if fully ACP like Simplify whole if the talk Surgical you're where for see coming going to the rates not in what the rather or modeling years. cervical. know look really is Simplify U.S. that, and than that to Simplify you're and things at going and is That's where quarter fourth

buried you more would because that's about how that a And Simplify. than in encourage to I lot it was just XX% so think

And regard is there, have need you But there, to wide a hard muted shortages are And didn't on It what last predict. be does recovery dynamic margins. continue. that's then impact We in back. we to we make and put With Therefore, surgeries costs. very out inflation year, navigate our That's to so we about backlog, wide freight earlier, went give to a trend did pressure. and with we of hospital why that you're environment. bolus expect forecast ranges. very that some to a ourselves range, can number do Shagun, saw But but seeing on staffing modest it's COVID. we in inflationary thinking with it certainly as of it compensation we said as include I modeling a not we on But it. sure huge coming is specific some

and quarter-to-quarter, procedures of seen non-acute year, thought different backlog. mix volumes some the care, saw the done. think an It's don't down on We've the example, we hard to little as just QX roughly in I we have ASC may gotten XX%. of add a last is type Yes. the tell, were

Some of gotten the more or trauma, may complex done. have cases obviously,

the don't the with or acceleration shortages see nature, yet, gradual. more constraints was of cases see some but catch-up, staff, DGEN I to at for -- will. we elective clinical the the the us. more on with that you of and Some it's of the been, come if in And Matt's a not those hospital opportunity, back, maybe We to point, some see an were impact now staffing start least

we'll the I several see point, think obviously If it it about sort over the this next that's and will happen of that changes, feel But quarters. gradually prediction. it at and talk it.

Yes. units And placed around Pulse Shagun, U.S. year the we just comment my were crystal in clear, last to be

So the math is clear there.

are We contract that European commercial in QX. -- do one we have received we've

that, on just be to but come more So to clear.

of Loop line Jason Our comes next Capital. the question with from Wittes

your proceed question. may You with

of Pulse? like want of I seems within saying growth most of it. on that know -- It if mean, maybe a going outside you you're $X the on answered just Pulse to if million was exceeded -- the there's of Pulse. sort business, from discussion I what's Surgical any Solutions,

remainder the So business? for is of of just what curious implications to know just Surgical kind Solutions the the broader

Yes. the over Surgical roughly last us been I Solutions has flat for mean, several.

reflection is generally what in the business. our from we're with feel as volume there flattish in the now, the as support business of has NCS biologics we biologics and right the a speaking, us. surge in -- a But choppy still at as the the well NCS on was position. for NCS it's least sort a stable our We We have And consider today. U.S. related clearly much of market we house little volume, market. very see been like

is the that that's -- that success Pulse Surgical the the that or Matt the So more into and is said what reflect implication U.S. we're selling units business.

So we're barometer that's it. of we'll -- a on kind how set

the Is just an arm there And a robotic quick follow-up. update on Okay. timing?

actually, not a but big update Yes. update. There well, is some maybe

years. like do. -- couple we gone progress I've the no the several over ARM robotic end-effector software into news world quarters and robotic instrumentation, we very significant time no the labs our will change commented good And resources. development previously do through goes readiness. We've we internally over against to of give will made work you completed So the And good have last progress process. of to each say design line, QX while made last there's believe the I the And in we've new these number and several continued invest our a in and our in us in insights but just last of electronics, the this areas that clinical there's is in-card the to not key before quarters or milestone program, our

stay So tuned.

QX, man. be a of time you we'll that We critical that are in inform we milestone now frame kind coming starting where to first really the will in got anticipated We've up are. track in and

Bank Our next Bijou line of America. question with comes from of the Craig

with question. may You your proceed

types that loyalists more -- being previously X it with surgeons and the level, Or Let me maybe of bit but were to Is and other just could early surgeons wanted provide they I products that days, little it? competitive are then Nuvo using level? maybe it's color X other see that surgeons of see more were on disguise a yours? prior Are it And how you are using or know they using are disc? were used. guys Simplify it if is -- I you start

Thanks, Craig.

specialized surgeons do say excited level surgeons, are been both our this lumbar more X our we'll our has be a in We days. catching both. those that Simplify and to both It's new we're competitive year. but up some level? and and over It's supply portfolio. but that the outstripped of a surgeons position about a Is would X cervical, mix of we supply, haven't Demand thoracal surgeons early technology, cervical, cervical new surgeons current It's specialized. Many maybe but company. will better or it talked clearly I broader about. as obviously, course are surgeons the When talked about more seen are Matt's attracting it's

differentiated comment X-millimeter market. done got actual that We've in in on procedures. a X-millimeter procedure the unique We've opener had had surgical this option So on It's the door for it's only had We're X-millimeter ours their us. the the have that folks employees definitely option. technology. individual

current We've underrepresented this as we've been the but about competitive we're talked NuVasive. X% surgeons, cervical surgeons excited share. would we both So I It's there, attracts -- space, seeing less than and say I'm new how about. to

as new about and more hospital the services at more potentially, after my in going level. adoption NuVasive driving said and introducing we're So I customer prepared remarks, density excited to

helpful. second That's a the question NSO today. a And it about it. business, Got on talked lot maybe you've

necessarily lot historically. haven't a it You about talked

color out to are it maybe see size then going or in growth on pulling just prospects could on? the that of maybe 'XX? So back the for that impact forward, of bit wanted impact market could of provide have And then it off the that and business, you the it if a the getting guys that even little given you coming

Yes.

applications. ways continuing done at to back, It to back accelerate We But it but year are talked lot us magic a been highly Clearly, a extenuating the about new I technology. them market. work to a I'm done the applying And over last can about lot on differentiated taking the lot we've of work business. to really portfolio. tell the haven't look we've of you, looking get to it. this we rods hasn't and excited material It's to overly

we grown of magic a Matt material over technology and but to us it something more the year. talked we've this turn complementary been it's the hasn't about in probably talk really immediate it sort NSO about. been hear to about the So because impact you'll I'll that haven't to lot over something background, talk

Yes.

with happy in the on be markets to to models still that domestic. is net being guys back one-third international this sales mentioned a back putting the $XX is, are year. few significant and We reality being So together, We year about of remarks believe last there we're bring But more the a in up million reason your the we we're through. is two-thirds well it $XX wanted QX, working market. that to million that prepared was have you we impact

about as So how you're thinking it, NSO. thinking about we're that's

line comes question Gong Our JPMorgan. Allen next of the from with

You with question. your proceed may

better get COVID the just and wanted This I QX. is situation into actually Rohan quarter to for in sense of Allen. the on a

So were this ones. And positive, conference, at wave quarantine many between tests kind you if is that to had JPMorgan Omicron household of of prior their the members of and to procedures forced the patients abnormal an delays the for distinguish quarter. if causing in amount

recovery robust on dynamic a since many ultimately QX the were also guess, for this give quantify of given scheduled? how last weeks over So those how recovery this outlook contemplated procedures can guidance? the and in your I commentary, procedures is deferred maybe and, several you pretty And

variant delta heavily QX a clearly, hit the September. to a still little into tough QX And QX. I we QX of Yes. would really out It's that where coming do. say had just QX, in saw better you is than

see volumes started shortages coming into early improved, through another February also news real that You accelerating in we saw in, Improvement where depression hearing to and staffing late, the hit time. our Omicron the in QX and in has around November, is we late Good with January. continue December January, improvement.

the we And Now there's and It's the shortages hospitals will take in a can settings on. if uncertainty. you what guidance. know if will, reflected don't a of our on the that's have staffing of bit ceiling, what

what truly is. end to My not it's -- where a I that quarter, it doesn't and not it the out. is on over investments don't how may we're get quarter, before, base April we made COVID the hope know the durable That didn't developed bit impact. say into on underlying to year, this will but be get volumes. of we've I still the get we over that quarter we and out as and uncertain a more said margin year. bullish are, is how hope next we we pre-COVID quickly and the through we where plays little We hope We can durability. play a back business have when It

of Our Samuel next the with line question Truist. from comes Berdowski

with proceed question. may your You

thanks I'll to color one you just gave call the shift Ohio. Simplify earlier on the and around for So the do manufacturing on

Is should the year? long of think grow if getting You approved simplify transition talked to granular a supply better we that late can kind into in packaging more can the a should idea sequentially through it about is Or being Just the more we get think it on XXXX? little this about constraint about we through still constrained going assembly not in how trying year. that -- get supply XXXX? how and

Thanks question, Sam. the for

requires second complete QX, manufacturing also first be Let in think our year ramp acquisition of XXXX. existing I and course packaging a clarify. remarks few my taken quarters as like me we'll the We Carrollton. path and a we good through sort make we we took of course the supply to news we upon here believe demand supply I have pathways. increasing state ramps, the of level the good this sure within supply in by us West is is into yields through prepared the that feel to of process. complete through optimize of and Ohio. increase We've supply year. also QX, to will story significant fully don't the X PMA around higher the supply We a approvals the environment. the be moving Medical supply phase that The over But mentioned supply-constrained assembly moving QX took We in of we'll Simplify of the that chain a It

over end Ladies to this remarks. back Barry today's closing call Chris of we to Mr. the I reached turn gentlemen, question-and-answer for have like session. and would

plan thank speaking to change for deliver forward value beyond and with call to likely after XXXX first on lives. shareholder growth today. transform us you and joining to work you, Thank quarter. Thank surgery, together you. look I our can help earnings all our continue and care all focus advanced you executing to strategic and and We'll for the in

This conference. concludes today's

Thank day. this you participation at lines of rest your your disconnect your may time. for You and the