GLOBUS MEDICAL INCGMED
GLOBUS MEDICAL INC Fair Value Disclosure
FAIR VALUE MEASUREMENTS
The following table represents the fair value of assets and liabilities as of December 31, 2025 and 2024, respectively, including the following:
| (In thousands) | Balance at December 31, 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | 311,708 | $ | 287,574 | $ | 24,134 | $ | — | |||||||||||||||
| Municipal bonds | 9,556 | — | 9,556 | — | |||||||||||||||||||
| Corporate debt securities | 37,427 | — | 37,427 | — | |||||||||||||||||||
| Commercial paper | 15,627 | — | 15,627 | — | |||||||||||||||||||
| Asset-backed securities | 19,178 | — | 19,178 | — | |||||||||||||||||||
| Government, federal agency, and other sovereign obligations | 21,118 | 17,046 | 4,072 | — | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Business acquisition liabilities | 101,508 | — | — | 101,508 | |||||||||||||||||||
| (In thousands) | Balance at December 31, 2024 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | 496,676 | $ | 423,977 | $ | 72,699 | $ | — | |||||||||||||||
| Municipal bonds | 15,498 | — | 15,498 | — | |||||||||||||||||||
| Corporate debt securities | 54,806 | — | 54,806 | — | |||||||||||||||||||
| Commercial paper | 36,530 | — | 36,530 | — | |||||||||||||||||||
| Asset-backed securities | 19,621 | — | 19,621 | — | |||||||||||||||||||
| Government, federal agency, and other sovereign obligations | 45,298 | — | 45,298 | — | |||||||||||||||||||
| 2025 Hedge | 22 | — | 22 | — | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Senior Convertible Notes due 2025 | 443,003 | 443,003 | — | — | |||||||||||||||||||
| Bifurcated Conversion Option of the Senior Convertible Notes due 2025 | 22 | — | 22 | — | |||||||||||||||||||
| Business acquisition liabilities | 123,235 | — | — | 123,235 | |||||||||||||||||||
Our marketable securities and certain cash equivalents are classified as Level 2 within the fair value hierarchy, as we measure their fair value using market prices for similar instruments and inputs such as actual trade data, benchmark yields, broker/dealer quotes and other similar data obtained from quoted market prices or independent pricing vendors.
Fair value of the revenue-based business acquisition liabilities was determined using a discounted cash flow model, probability model and an option pricing methodology. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility and discount rates, market price risk adjustment, projections associated with the applicable milestone, the interest rate, and the related probabilities and payment structure in the contingent consideration arrangement.
The following are the significant unobservable inputs used in the two valuation techniques:
| Unobservable input | Range | Weighted Average* | ||||||||||||||||||
| Revenue risk premium | 1.6% | - | 5.5% | 2.5% | ||||||||||||||||
| Revenue volatility | 14.0% | - | 15.8% | 14.8% | ||||||||||||||||
| Discount rate | 4.5% | - | 8.5% | 5.0% | ||||||||||||||||
| Projected year of payment | 2026 | - | 2035 | |||||||||||||||||
*The weighted average rates were calculated based on the relative fair value of each business acquisition liability.
The change in the carrying value of the business acquisition liabilities during the years ended December 31, 2025 and 2024, respectively, included the following:
| December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Beginning balance | $ | 123,235 | $ | 139,358 | |||||||
| Purchase price contingent consideration | — | 25,111 | |||||||||
| Changes resulting from foreign currency fluctuations | (253) | 246 | |||||||||
| Contingent cash payments | (32,590) | (64,382) | |||||||||
| Contingent RSU grants | (2,406) | (2,500) | |||||||||
| Changes in fair value of business acquisition liabilities | 13,462 | 26,521 | |||||||||
| Contractual payable reclassification | 60 | (1,119) | |||||||||
| Ending balance | $ | 101,508 | $ | 123,235 | |||||||
Changes in the fair value of business acquisition liabilities are driven by changes in market conditions and the achievement of certain performance conditions.
Purchase price contingent consideration includes obligations acquired in the NuVasive Merger in addition to other immaterial acquisitions. Changes in the fair value of business acquisition liabilities are driven by changes in market conditions and the achievement of certain performance conditions.
We translate the financial statements of our foreign subsidiaries with functional currencies other than the U.S. dollar into the U.S. dollar for consolidation using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. Some of our reporting entities conduct a portion of their business in currencies other than the entity’s functional currency. These transactions give rise to receivables and payables that are denominated in currencies other than the entity’s functional currency. The value of these receivables and payables is subject to changes in currency exchange rates from the point at which the transactions are originated until the settlement in cash. Both realized and unrealized gains and losses in the value of these receivables and payables are included in the determination of net income or loss. Foreign currency translation gain/(loss), which include gains and losses from derivative instruments, was a loss of $3.0 million and $43.3 million for the years ended December 31, 2025 and 2024, respectively, and are included in other expense, net in the Consolidated Statements of Operations and Comprehensive Income.
To manage foreign currency exposure risks, we may use derivatives for activities in entities that have short-term intercompany receivables and payables denominated in a currency other than the entity’s functional currency. The fair value is based on a quoted market price (Level 1). As of December 31, 2025, a notional principal amount of $12.5 million was outstanding to hedge currency risk relative to our foreign currency-denominated receivables and payables. Derivative instrument net gain on our forward exchange contracts were $0.6 million as of December 31, 2025 and are included in in the Consolidated Statements of Operations and Comprehensive Income. The fair value of the forward exchange contract derivative instrument asset (liability) was di minimis as of December 31, 2025. The derivative instruments are recorded in other current assets or other current liabilities in the Consolidated Balance Sheets commensurate with the nature of the instrument at period end.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 17, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.