Medical device maker Globus Medical (NYSE:GMED) has been around since 2003, but has only been selling its Excelcius GPS surgery robots since 2017. Its legacy business is well established, but many investors are excited about the growth potential of its surgical robots. On a Fool Live episode recorded on July 14, Fool contributors Brian Feroldi and Toby Bordelon discuss the company's most recent results with a focus on its robot segment.

Brian Feroldi: OK. Globus Medical is next, ticker symbol is GMED. This is a company that is a medical device company focused on the musculoskeletal industry. They have dozens of products that are part of their legacy business that are growing at a steady pace. The company has huge inside ownership, it's got strong margins, it's profitable, it's been a great long-term investment. This became a Motley Fool rec, I think a few years ago now, at this point, mostly because they launched a new robotic surgery product. That product had a rough 2020, hard to launch a new robotic surgical system in the wake of a pandemic.

But in the most recent quarters, sales of their robotic surgery lines actually grew 86% to $15 million. Now, their legacy business did $212 million in revenue for the quarter, that was up 16%, so robotics sales are growing quickly, but they're still pretty small in the overall sense of things. When you combine that all together, total revenue here grew 19% to $227 million.

Gross margin expanded nicely to 75.8%, expenses only grew 69%, and the company produced about $50 million in free cash flow and ended the quarter with $838 million in cash, zero debt. The company had such a strong start to the year that they actually upped their guidance for the year. They were previously expecting $880 million in revenue. Now, they're expecting over $900 million in revenue and they bumped up their earnings guidance at the same time by a few pennies.

Longer-term, I think this company can continue doing what it's doing, and its core musculoskeletal business is profitable, that's growing at a high single-digit, low double-digit rate, and the ExcelsiusGPS robotic business really provides the company with lots of long-term potential. Yet again, thesis on track.

Toby Bordelon: Nice. I like those numbers. I like robots, especially medical robots, but I'll say I don't know too much about this specific part of the industry, maybe I should more. But just looking at it briefly, I saw there seem to be some other robotic systems out there that are similar. I think Medtronic's got one, Zimmer Biomet's got one. Do you think Globus is the clear No. 1 in this market? Is there a big reason I should say this is the company I'm going to buy versus one of the other ones?

Brian Feroldi: Globus is one of the leading players in its core legacy products. However, it's new ExcelsiusGPS system, this is brand new, so it would be a mistake to call it the leader, it's just too early. However, the entire market for surgery to say nothing of the entire market for robotic surgery are in bull market mode.

I think that the market is strong enough and this company has strong enough relationship with a lot of doctors that it can succeed, even if those other companies succeed. But make no mistake, this company isn't the top dog or anything like that in this case.

Toby Bordelon: Cool. Thank you for that. I would look at this more, is very interesting.

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