Matt Miksic

Matt Miksic asked about the differences in growth drivers between Stryker's U.S. and international businesses, considering factors like ASC penetration and robotic adoption life cycles. He also inquired about the recurring nature of Stryker's business and its importance. Additionally, he asked how Stryker would manage the flex in its financial model, balancing OpEx investment versus bottom-line drop-through, if the company were to exceed the high end of its top-line guidance.

Answer

Preston Wells, CFO, Stryker, explained that international dynamics are similar to the U.S., but U.S. growth is currently higher due to product launch timing and EU MDR challenges. Jason Beach, VP of Finance and Head of Investor Relations, Stryker, clarified that approximately 25% of revenue is capital-related (15% procedure-tied, 10% larger capital) and 75% is procedurally driven (recurring, disposables, implants). For margin flex, Mr. Wells stated that exceeding top-line guidance would result in additional profit drop-through, balanced with costs for tariffs and future growth investments. Kevin Lobo, Chair and CEO, Stryker, suggested 2025's performance as a good proxy for this balance.

Matt Miksic asked about the differences in growth drivers between the U.S. and international markets, considering factors like ASCs and robotic adoption, and the recurring nature of Stryker's business. He also asked CFO Preston Wells about the flexibility in Stryker's financial model if the top line exceeds the higher end of the guidance range, specifically regarding OpEx investment versus drops to the bottom line.

Answer

Chair and CEO Kevin Lobo explained that international dynamics are similar to the U.S., but launch timing (e.g., EUMDR impact) currently leads to higher U.S. growth, though international opportunity is significant. VP of Finance and Head of Investor Relations Jason Beach clarified that approximately 25% of revenue is capital-related (15% procedure-tied, 10% larger capital) and 75% is procedurally driven (recurring, disposables, implants). CFO Preston Wells stated that if the top line exceeds guidance, additional profits would drop to the bottom line, but also noted that some costs (tariffs, future growth investments) would be balanced, citing 2025 as a good proxy where both top and bottom lines increased.

Matt Miksic inquired about the competitive dynamics in the Ambulatory Surgery Center (ASC) market, where Stryker has been a leader, and opportunities to leverage its position by bringing other businesses and product lines into this setting.

Answer

Kevin Lobo, Chair and Chief Executive Officer, emphasized Stryker's high growth in the ASC, leveraging its full portfolio. He noted the increasing emergence of total shoulder and total ankle procedures in ASCs, where Stryker holds a strong market position, indicating that the trend of procedures moving to ASCs is highly beneficial for the company.

Matt Miksic inquired about the competitive dynamics in the Ambulatory Surgical Center (ASC) market, where Stryker has a leading position in knees, and opportunities to leverage its portfolio across other business lines in this setting.

Answer

Kevin Lobo (Chair and CEO, Stryker) affirmed that Stryker benefits significantly from the trend of procedures moving to ASCs, leveraging its full portfolio. He highlighted total shoulder and total ankle as emerging products in ASCs, emphasizing that increased orthopedic procedures in ASCs are advantageous for Stryker due to its broad portfolio, including capital, disposables, and implants.

Matt Miksic of Barclays asked for metrics on the interventional spine (IBS) business, including the OptiBlade launch, and for an update on the company's AI and digital initiatives.

Answer

Chair & CEO Kevin Lobo described the IBS business as a 'gem' that is 'cooking on gas,' delivering consistent, strong double-digit growth fueled by products like OptiBlade and the recent Virtus acquisition. On AI, Lobo mentioned existing applications like BLUEPRINT surgical planning and highlighted the hiring of a new Chief Digital Information Officer. He indicated that a more detailed update on AI strategy would be provided at the upcoming Investor Day.

Matt Miksic asked about the company's expectation for gaining market share in the fourth calendar quarter, specifically identifying inflecting business lines and catalysts. He also followed up on the potential separation of CooperVision (CVI) and CooperSurgical (CSI), asking what factors, such as tax basis or portfolio tuning, might make it possible now.

Answer

President and CEO Al White expressed optimism for strong market share gains in calendar Q4, citing a significantly better position compared to a weaker Q4 last year, driven by MyDay momentum. Regarding separation, he acknowledged dis-synergies from a tax and operational perspective but emphasized that evaluating strategic alternatives is good hygiene, especially given the progress in both CVI and CSI businesses.

Matt Miksic asked if some users are holding onto G6 or returning to it, if this impacts manufacturing efficiency, and thoughts on transitioning off G6. He also inquired about general product strategy, specifically if Dexcom is considering adjacencies or truly different platforms beyond G7/G8, like Dexcom ONE+ or Stelo, to help patients manage diabetes or other glycemic elements.

Answer

Jake Leach, President and Interim CEO, stated that G6 users are consistently transitioning to G7, with a very small number returning to G6, which doesn't significantly impact the business. He affirmed the goal to ensure G7 meets all user needs and will announce the official conclusion of G6 when appropriate. He highlighted Dexcom ONE+ as successful in expanding market segments (e.g., France growth) and Stelo as a product spanning Type 2 to pre-diabetes and metabolic health, which will expand internationally next year. He also pointed to Smart Basal as an example of software innovation driving outcomes and adherence in the basal population, emphasizing a portfolio approach to meeting diverse customer needs.

Matt Miksic asked about the G6 transition, specifically if some users are returning to G6, its impact on manufacturing, and the timeline for fully transitioning off G6. He also inquired about Dexcom's broader product strategy beyond G7/G8, including adjacencies or alternative platforms like Dexcom ONE and Stelo.

Answer

Jake Leach, President and Interim CEO, stated that G6 users are consistently transitioning to G7, with a 'very small number' returning to G6, which doesn't significantly impact the business. He affirmed commitment to G7 meeting all user needs and will announce G6's conclusion when appropriate. He highlighted the success of Dexcom ONE+ in expanding market segments (e.g., France) and the importance of Stelo for Type 2, pre-diabetes, and metabolic health, with international expansion planned for next year. He also pointed to Dexcom Smart Basal as an example of focusing on outcomes for broad populations through different products and software experiences, aiming for optimal dosing with no hypoglycemia and improved adherence.

Matt Miksic asked about the rollout strategy for new systems like Photon Counting and Total Body PET next year, including how GE HealthCare captures orders and builds a pipeline. He also inquired about where and how AI investments are translating into growth, customer engagement, and economic returns for the business.

Answer

President and CEO Peter Arduini explained that product launches are tied to regulatory approvals, with many new products expected at RSNA, designed for minimal site disruption to facilitate upgrades. He highlighted AI's role in AVS for superior performance, better pricing, and higher capture rates, and introduced the CareIntellect platform for departmental, longitudinal solutions. VP and CFO Jay Saccaro noted digital revenue expansion and 100 AI-enabled FDA device authorizations, emphasizing AI's role in product differentiation.

Matt Miksic asked about the rollout strategy for new systems like Photon Counting and Total Body PET, focusing on capturing orders and building a pipeline ahead of their mid-year and end-of-year launches. He also questioned where GE HealthCare's investments in AI are translating into economic returns, growth, and customer engagement.

Answer

President and CEO Peter Arduini explained that product launches are unique based on regulatory approvals, with announcements at events like RSNA serving as milestones for customer planning. He noted that many new products are designed for minimal site disruption and that fleet discussions with major customers are key. He highlighted that AI-powered AVS products are driving superior performance, better pricing, and higher capture rates, contributing to margin improvement. He also introduced the "Care Intellect" platform as a significant step towards departmental, longitudinal SaaS solutions. VP and CFO Jay Saccaro added that digital revenue is on track to expand from $1.2 billion to $1.8 billion by 2028, with AI-powered devices increasing from 85 to 100 FDA authorizations.

Matt Miksic asked about the sequential strength in MedTech during Q3, questioning if it reflected a stronger market or user adoption, and whether the orthopedic spin-out would allow for loosening the capital structure and balance sheet to invest further in key MedTech areas.

Answer

EVP, Worldwide Chairman, MedTech Tim Schmid attributed MedTech's sequential improvement to solid performances across all businesses, including Ortho returning to growth (hips, knees, trauma, spine), continued strong cardiovascular, solid surgery, and accelerated vision. Chairman and CEO Joaquin Duato reiterated the focus on vision, cardiovascular, and robotic surgery, and the commitment to enhancing the portfolio to make the MedTech group a leader in the industry.

Matt Miksic inquired about the drivers of sequential strength in MedTech during the quarter, specifically whether it was due to a stronger market or J&J's competitive gains. He also asked if the orthopedic spin-off would allow for a more flexible capital structure to increase M&A in core MedTech areas.

Answer

CFO Joe Wolk highlighted solid performances across all MedTech businesses, including the return to growth for orthopedics, as key contributors to sequential improvement. Chairman and CEO Joaquin Duato reiterated that J&J's focus in MedTech remains on vision, cardiovascular, and robotic surgery, where they will continue to seek opportunities to enhance the portfolio and achieve the goal of being the best MedTech group in the industry.

Matt Miksic asked for help quantifying the annual impact of major growth drivers like ablation and RDN on the total portfolio growth rate, seeking clarity on the cadence of acceleration over the next one to two years.

Answer

EVP & CFO Thierry Piéton stated that specific long-term targets would be provided at a mid-2026 Investor Day. However, he emphasized that drivers like the $1 billion incremental revenue goal for CAS represent 'macro level' opportunities that will be incremental to the base business. Chairman & CEO Geoff Martha added that this growth creates a virtuous cycle of reinvestment without sacrificing EPS growth.

Matt Miksic from Barclays Investment Bank inquired about the progress of the Nevro integration, focusing on cost-saving initiatives and their effect on the sales force. He also asked for an update on the Enabling Technologies business, specifically the reasons for the Q1 slowdown and the current deal closure dynamics for robotic systems.

Answer

President & CEO Keith Pfeil responded that they are cautiously optimistic about Nevro's progress, noting that leadership has energized the sales force. He explained that major cost actions occurred late in Q2 and the long-term goal is growth. Regarding Enabling Tech, Pfeil stated that Q1 deals closed in Q2, but selling cycles remain elongated. He affirmed that Globus is not losing deals to competition and considers Medtronic its primary competitor, believing Globus's technology is superior.

Matt Miksic from Barclays Investment Bank asked about the integration of Paragon 28, focusing on the retention of its commercial team, and whether this acquisition represents a repeatable "rinse and repeat" model for future M&A.

Answer

Chairman, President & CEO Ivan Tornos confirmed the integration is going "really well," with better-than-expected efficiencies and no management or key commercial channel turnover. He stated that the model of acquiring a company with solid innovation and commercial execution, and allowing it to run independently, is "absolutely" a rinse-and-repeat model for the future.

Matt Miksic asked about the P&L implications of the strong international growth and the strategy for scaling into new geographies, including any significant changes in distributorships.

Answer

Ana Maria Chadwick, EVP & CFO, and Ashley McEvoy, Director, President & CEO, responded. They described a layered growth strategy that includes launching Omnipod 5, adding new sensor integrations, and securing broader access with local health authorities. This market-making approach, such as achieving NICE guidelines in the UK and full reimbursement in France, allows them to command a price premium and drive penetration.

Matt Miksic from Barclays Investment Bank asked about the P&L impact of the strong international growth, the strategy for scaling in new geographies, and whether there was a recent step-up in new distributor relationships.

Answer

EVP & CFO Ana Maria Chadwick described a layered growth strategy: an initial lift from the Omnipod 5 launch, a second lift from adding new sensor integrations, and a third from expanding access with local health authorities. CEO Ashley McEvoy added that market-making activities, like securing NICE guidelines in the UK, enable premium pricing. She confirmed that the newest markets have not yet had a material revenue impact.

Matt Miksic of Barclays Investment Bank inquired about the potential top and bottom-line impact of the recent CMS proposal for insulin pump reimbursement, including the pay-as-you-go model.

Answer

EVP, CFO & Treasurer Leigh Vosseller stated that Tandem does not expect a material impact, noting that traditional Medicare represents less than 10% of U.S. sales. She added that the proposed pay-as-you-go model aligns with their commercial strategy for the pharmacy channel and could ultimately be a positive for the business by driving more people to pump therapy.

Matt Miksic from Barclays asked for a breakdown of the Cardiopulmonary growth model to better understand its durability, questioning whether the current high growth is a short-term phase or a longer wave driven by system placements.

Answer

CEO Vladimir Makatsaria expressed increased confidence in the durability of growth, outlining four key drivers: 1) healthy procedure growth, 2) a multi-year Essence upgrade cycle followed by software monetization, 3) sustained market share gains in oxygenators, and 4) strong execution of pricing strategies. He stated these factors together provide confidence in sustained momentum for the business.

Matt Miksic asked about the key differentiators for ATEC's upcoming Valence robotics platform and the investments made to support the integration of its comprehensive ecosystem, from imaging to automation.

Answer

Chairman & CEO Pat Miles explained that ATEC's focus is on procedural integration rather than the robot itself. He stated the key differentiator will be the elegant integration of navigation and robotics into the surgical workflow of proprietary procedures like PTP, enhancing precision and reproducibility with a small footprint. Miles emphasized the goal is to make the operating room an execution-focused environment based on a pre-operative plan.

Matt Miksic from Barclays sought clarification on the updated fluid conservation assumptions and asked whether a negative impact in the pharma segment was due to a one-time government contract issue or broader demand weakness.

Answer

EVP & COO Heather Knight clarified that the low end of guidance now assumes a more prudent -20% impact from IV fluid conservation, compared to a -10% assumption previously. She also confirmed the pharma headwind was due to assuming a large government order from the prior year does not repeat in 2025.

Matt Miksic of Barclays Investment Bank asked for clarification on the current assumption for hospital fluid conservation, which was previously estimated at 10%. He also questioned if the softness in the pharmaceuticals segment was due to a lumpy government contract or a more persistent demand issue.

Answer

EVP & COO Heather Knight clarified that the low end of the new guidance prudently assumes a -20% impact from IV conservation, reflecting a more modest outlook for the rest of the year. She also confirmed that the guidance assumes a U.S. government order from the prior year does not repeat in 2025.

Matt Miksic from Barclays Investment Bank inquired about the business cadence in Q2 versus Q1, asking if the market uncertainty that impacted Q1 continued, and questioned the strategy of maintaining investments during a market downturn.

Answer

CFO Yair Malca confirmed that both Q1 and Q2 were slightly below expectations, prompting a guidance revision. He noted no significant change in the challenging market behavior between quarters. CEO Moshe Mizrahy added that both quarters missed seasonal targets. Yair Malca affirmed the company's long-term strategy to remain invested in its sales structure and global expansion, anticipating an eventual market recovery.

Matt Miksic of Barclays asked about CEO Brent Saunders' decision to extend his contract and the key factors influencing it. He also inquired about the quantifiable impact of tariffs on guidance and the company's strategy for the pharmaceutical segment, particularly regarding the gross-to-net dynamics for Xiidra.

Answer

CEO & Chairman Brent Saunders cited his deep confidence in the team, product portfolio, and R&D pipeline as the primary reasons for extending his contract, emphasizing the opportunity to accelerate growth and expand margins. Regarding the pharma strategy, Saunders explained that the 2025 gross-to-net headwinds for Xiidra were anticipated and that the current focus is on driving prescription volume, with profitability expected to improve starting in 2026. EVP & CFO Sam Eldessouky added that the estimated tariff impact for 2025 has been reduced to approximately 40 basis points and is fully absorbed in the updated guidance due to mitigation efforts.

Matt Miksic from Barclays asked how to view the Q2 TAVR strength in the context of typical Q3 seasonality and requested commentary on the accelerated growth in the 'Rest of World' geography. He also inquired about the primary gating factors for TMTT growth.

Answer

Corporate VP Larry Wood confirmed the updated TAVR guidance accounts for Q3 seasonality. CEO Bernard Zovighian highlighted that strong 'Rest of World' growth underscores TAVR's global expansion. For TMTT, Corporate VP Daveen Chopra explained that growth is driven by layering multiple catalysts, including new technology launches, geographic expansion, new clinical data, and physician training.

Matt Miksic of Barclays asked how to view the Q2 TAVR strength in the context of typical Q3 seasonality and commented on the acceleration in the Rest of World region. He also inquired about the primary gating factors for TMTT growth.

Answer

Larry Wood, Corporate VP of TAVR, confirmed the updated guidance accounts for Q3 seasonality. CEO Bernard Zovighian noted that strong Rest of World growth reflects TAVR's global expansion. For TMTT, Daveen Chopra, Corporate VP, explained that growth is driven by multiple layers, including new technology launches, geographic expansion, clinical data generation, and physician training.

Matt Miksic from Barclays Investment Bank asked for more color on Abbott's M&A strategy, specifically where the company sees the most likely areas for investment or gaps to fill in its portfolio.

Answer

Chairman and CEO Robert Ford reiterated that M&A focus remains on Diagnostics and Medical Devices but declined to specify target areas. He emphasized that Abbott's strong organic growth allows the company to be highly selective, prioritizing strategic fit and the ability to enhance acquired assets rather than simply acquiring for scale.

Matt Miksic asked for management's confidence level in Q4 volumes and their qualitative outlook for exiting 2024 and entering 2025. He also requested an update on the performance and utilization trends for the digital portfolio, including the RealGUIDE software.

Answer

Executive Vafa Jamali stated management feels confident about the end of the year, citing the returning health of the profitable North American market. Executive Richard Heppenstall added that while not providing 2025 guidance, the company is well-positioned with a stabilizing business, higher gross margins, prudent investments, and a healthy balance sheet. On digital, Heppenstall reported that the portfolio, excluding iTero, grew over 10%, with the RealGUIDE software component growing over 30% year-over-year.