Rick Wise

Rick Wise from Stifel asked about LeMaitre Vascular's M&A strategy for 2026, given the company's strong cash position, and how important acquisitions are to the company's growth plans. He also requested an update on the stellar Artegraft performance, specifically whether the European TAM is larger than previously estimated (€8 million), and the sustainability of its growth.

Answer

CEO George LeMaitre noted the company's focus on proving organic growth capabilities but affirmed their readiness for M&A. President Dave Roberts elaborated that the M&A pipeline is active, focusing on open vascular (22 targets) and cardiac surgery, with a sweet spot for revenues between $15 million and $150 million, emphasizing the importance of the "right" acquisition over simply deploying cash. Regarding Artegraft, George LeMaitre revised the European TAM estimate to $30 million from $8 million, acknowledging its better-than-expected performance. He highlighted strong sales in Europe and South Africa, with the Omniflow ovine graft smoothing the path for the more robust bovine Artegraft. Dave Roberts added that Artegraft's success in Europe is driven by its use as a leg bypass graft and the potential to expand its use into dialysis access, a market where it shines in the U.S.

Rick Wise inquired about LeMaitre Vascular's M&A strategy for 2026, given its strong cash position, and the importance of acquisitions. He also asked for an update on Artegraft's stellar performance, the potential expansion of its European Total Addressable Market (TAM), and the sustainability of its growth.

Answer

CEO George LeMaitre highlighted the company's organic growth capabilities, while President Dave Roberts detailed M&A focus on open vascular and cardiac surgery, targeting $15M-$150M revenue, prioritizing the 'right acquisition.' LeMaitre revised Artegraft's international TAM to $30M (from $8M), citing strong 2025 performance ($4M) and 2026 guidance ($10M), attributing success to market readiness and sales force. Roberts explained Artegraft's use in Europe for leg bypass and potential for dialysis access.

On behalf of Rick Wise of Stifel, Annie asked for details on the 2025 sales force expansion, including the geographic breakdown and whether it involves territory splitting. She also inquired about the expected physician reaction and 2025 revenue contribution from the anticipated Artegraft CE mark approval in Europe.

Answer

CEO George LeMaitre stated that approximately two-thirds of the 13 planned rep hires for 2025 will be in North America, primarily for splitting oversized territories. The remainder will support international expansion in markets like Portugal, Czechia, and Switzerland. Regarding Artegraft, he acknowledged the $8 million European market opportunity but declined to provide specific 2025 revenue guidance ahead of the approval, highlighting the product's strong growth from $15 million to $36 million since its acquisition.

Rick Wise asked for details on the next-generation Tablo system, specifically regarding the upgrade opportunity for the existing installed base versus new purchases, and the potential cost implications. He also sought further explanation of new features beyond cybersecurity, their impact on Tablo's appeal, ease of use, and clinical utility. Additionally, Wise inquired about the next-gen Tablo's average selling price (ASP), its potential effect on gross margins (accretive or initially depressive), and how the launch is factored into the 2026 guidance, particularly concerning margin impact.

Answer

Chair and CEO Leslie Trigg confirmed that the next-gen Tablo, with its new software, operating system, and hardware, will be available as a full access upgrade for the existing installed base and for new customers. She highlighted extensive cybersecurity updates and performance enhancements aimed at improving uptime, user experience, and patient care, emphasizing customer-centric innovation. CFO Renee Gaeta deferred specific ASP details until closer to the Q2 launch but indicated that the product innovation could be a tailwind for gross margins. She noted that the strategic design of the next-gen platform allows for flexibility in upgrades and manufacturing, expecting a relatively mild impact on gross margins, though a higher console mix could dampen them in the near term. The 2026 guidance includes a back-end assessment for the late Q2 launch.

Rick Wise inquired about the upgrade opportunities for existing customers with the Next-Gen Tablo system, details on its new features beyond cybersecurity, and the potential impact of the new system's launch on gross margins and the company's 2026 guidance.

Answer

Leslie Trigg, Chair and CEO, confirmed that both existing and new customers will have full access to the Next-Gen Tablo upgrade, which includes new software, operating system, and hardware for improved device performance, reliability, and uptime, directly addressing customer feedback. Renee Gaeta, CFO, indicated that while ASP specifics for the Next-Gen Tablo would be provided closer to the Q2 launch, the product innovation is expected to be a potential tailwind for revenue and gross margins. She noted that the current gross margin guidance for 2026 already factors in the launch, anticipating a relatively mild impact on margins, although a higher console mix could temporarily dampen them.

Rick Wise of Stifel Financial Corp. inquired about the updated 2025 guidance, questioning if it seemed conservative given strong momentum, and asked for an update on the commercial strategy transition's effectiveness.

Answer

Chair and CEO Leslie Trigg acknowledged the company's commitment to guidance conservatism for 2025 but emphasized the strong first-half performance and positive setup for the second half. She stated the commercial transformation is successfully taking root, evidenced by improved pipeline management, forecasting, and deal conversion, with the team now proficient in enterprise-level sales.

Rick Wise inquired about the rationale behind the tempered low single-digit growth guidance for 2026, following five consecutive years of mid-single-digit growth, and whether the disruption from the sales transition is expected to be greater in the first half of the year.

Answer

Ivan Tornos, Chairman, President, and CEO of Zimmer Biomet, clarified that the company has achieved five years of mid-single-digit revenue growth. He stated that the 2026 guidance primarily embeds three factors: the U.S. Salesforce transition (a deep priority with potential disruption), the adoption of new products (specifically the Magnificent Seven), and the performance of the international business, which has been fragile. Tornos did not explicitly detail the phasing of disruption but implied it's a factor throughout the year.

Rick Wise asked for clarification on the tempered 2026 guidance of low single-digit growth, following five consecutive years of mid-single-digit growth, and what factors are embedded in this outlook, including potential disruption phasing in the first versus second half of the year.

Answer

Ivan Tornos, Chairman, President, and CEO, clarified the company has achieved five years of mid-single-digit growth. He attributed the 2026 guidance to three factors: the U.S. sales force transition, new product adoption (Magnificent Seven), and the performance of the international business in key geographies.

Rick Wise asked about potential upsides to the company's 'prudent guidance' for the year, inquiring whether these would stem from new products, expanded sales efforts, or reduced growth drags. He also requested an update on the CFO search, including timing and desired qualities for the new partner.

Answer

Tom Polen, Chairman, CEO and President, stated that the CFO search is well underway, with an update to be provided upon completion, emphasizing a focus on continuity and financial discipline. Regarding guidance upsides, he pointed to investments in high-growth, high-margin areas (urinary incontinence, pharmacy automation, connected care, APM, tissue regeneration, biologics) as natural opportunities. He also highlighted the new Chief Revenue Officer role, aiming for a 'next level of performance' in commercial execution through sales force expansion, new compensation plans, tech stacks, and optimized management systems, complementing innovation and tuck-in M&A.

Rick Wise asked about potential upsides to BD's 'prudent guidance' for the next two to six quarters, inquiring if these upsides would likely stem from new products, expanded sales efforts, or a reduction in growth drags. He also asked for an update on the CFO search, including timing and desired qualities for the new partner.

Answer

Tom Polen, Chairman, CEO and President, stated that the CFO search is well underway, with an update to be provided upon completion, emphasizing a focus on continuity and financial discipline. For potential upsides, he pointed to high-growth, high-margin areas like urinary incontinence, pharmacy automation, connected care, APM, tissue regeneration, and biologics. He also highlighted opportunities from enhanced commercial excellence under the new Chief Revenue Officer, Mike Feld, through sales force expansion, compensation changes, new tech stacks, and optimized management systems, complemented by the innovation pipeline and tuck-in M&A.

Rick Wise asked for more details on BD's three major initiatives—the operating model change, commercial team realignment, targeted sales team focus, and Mike Feld's new Chief Revenue Officer role—and their impact on new BD's growth, margins, and the timing of benefits, as well as longer-term operating margin targets.

Answer

Chairman, CEO, and President Tom Polen explained that BD is extending its BD Excellence to commercial and innovation, with Mike Feld leading as Chief Revenue Officer to drive world-class commercial performance. He highlighted $30 million in incremental sales force investments in high-growth, high-margin areas (e.g., PI, APM, PureWick at home) and $50 million of corporate costs reallocated to R&D for future innovations (e.g., PureWick adjacent, tissue regeneration, biologic drug delivery). Commercial benefits are expected this year, with R&D investments yielding longer-term results. He also noted the achievement of 25% operating margin, with further room for expansion driven by gross margin and favorable mix.

Rick Wise sought further details on BD's three major initiatives: the operating model change, targeted sales team focus, and Mike Feld's new Chief Revenue Officer role, asking about their impact on new BD, timing of benefits, and implications for divisional growth and margins. He also inquired about longer-term operating margin expansion beyond the 25% target.

Answer

Tom Polen, Chairman, CEO, and President of BD, elaborated on extending BD Excellence to commercial and innovation. He detailed Mike Feld's new CRO role to drive world-class commercial performance, the re-architecting of the commercial operating model, and a $30 million incremental investment in sales forces for high-growth/high-margin areas like PI, APM, PureWick at home, and new surgery innovations in Europe. He also mentioned reallocating $50 million of corporate costs to R&D for future innovations in areas like urinary incontinence, tissue regeneration, and biologic drug delivery. Commercial benefits are expected this year, with R&D benefits in a couple of years. For margins, he noted achieving the 25% target and sees further room for expansion driven by continued gross margin improvement from BD Excellence and a positive mix from investing in higher-margin spaces.

Rick Wise from Stifel Financial Corp. inquired about the implied operating margin for the fiscal fourth quarter, noting a potential sequential decline, and asked for clarification on the contributing factors such as tariffs, China, or conservatism.

Answer

Christopher DelOrefice, EVP & CFO, explained that the company has delivered strong P&L performance driven by the BD Excellence program. He stated that Q4 gross margin is expected to be flat year-over-year, successfully absorbing a ~$90 million tariff impact. The slight sequential step-down in operating margin is planned and primarily due to the timing of increased strategic investments to fuel growth momentum.

Rick Wise reflected on Intuitive's statement about being in the 'early stages of its journey' and the increase in 'procedures in direct line of sight' from 7 million in 2024 to 9 million in 2026, asking for clarification on the drivers behind this growth, such as cardiac or ASC opportunities. He also inquired about the digital subscription package, My Intuitive Plus, and its potential economic impact on growth and da Vinci 5 adoption.

Answer

CEO Dave Rosa clarified that 'early stages' refers to the long-term goal of substantially improving patient outcomes and eliminating complications. VP of Investor Relations Dan Connally explained that the increase in line-of-sight procedures (7M in 2024, 8M in 2025, 9M in 2026) is primarily driven by strengthening clinical validation, supportive economics in benign procedures, modest impact from additional procedure clearances (like nipple-sparing mastectomy for SP in the US), and demographic impacts. CFO Jamie Samath detailed My Intuitive Plus, a digital subscription package for da Vinci 5, which includes telepresence, simulation, and case insights. Initially offered with a free year, customers will have the opportunity to renew for a fee around Q2 2026, which will then be reflected in revenue. He noted the synergy with force feedback and ongoing refinement of case insights.

Rick Wise reflected on Intuitive's statement about being in the 'early stages of its journey' and the increase in 'direct line of sight' procedures from 7 million in 2024 to 9 million in 2026. He asked for clarification on the drivers of this increase, such as cardiac opportunities, ambulatory surgery, or instrument-specific factors. He also inquired about the digital subscription package, My Intuitive Plus, its economic implications, and its impact on da Vinci 5 adoption and growth outlook.

Answer

CEO Dave Rosa clarified 'early stages' refers to the journey of substantially improving patient outcomes and eliminating complications. VP of Investor Relations Dan Connally attributed the increase in line-of-sight procedures primarily to strengthening clinical validation and supportive economics in benign procedures, modest impact from new clearances (like nipple-sparing mastectomy and SP in the U.S.), and demographic shifts. CFO Jamie Samath explained My Intuitive Plus, offered with da Vinci 5, includes telepresence, simulation, and Case Insights. Initially free for one year, the free period was extended, but customers will begin paying for renewals around Q2 2026, which will impact renewal rates and ASPs. He noted synergy between Case Insights and force feedback.

Rick Wise from Stifel Financial asked about Intuitive's strategy for expanding into new settings like Ambulatory Surgery Centers (ASCs) and inquired about the future evolution of the da Vinci V platform, including new features and their potential impact on adoption, ASP, and margins.

Answer

CEO Dave Rosa explained that ASCs require reliable technology and that Intuitive's portfolio is well-suited for this environment. He noted that as hospitals upgrade to da Vinci V, their existing Xi or X systems can be moved to ASCs. Regarding da Vinci V's evolution, he compared it to the Xi's decade-long journey of added capabilities, highlighting upcoming enhancements like advanced 3D model integration. CFO Jamie Samath added that while most new features won't be charged for directly, they enhance the system's value, potentially encouraging sales, and that the company is considering charging for certain new digital capabilities.

Rick Wise from Stifel inquired about Intuitive's strategy for expanding into new settings like Ambulatory Surgery Centers (ASCs) and asked for more detail on the planned evolution of the da Vinci V platform with future software and feature releases.

Answer

CEO Dave Rosa explained that ASCs are an increasing focus and that Intuitive's current portfolio, including traded-in Xi and X systems, is well-suited for these outpatient environments. He compared the da Vinci V's evolution to the Xi's decade-long journey of added capabilities, highlighting upcoming advancements in 3D model integration. CFO Jamie Samath added that while most new features won't be charged for directly, they enhance the system's value proposition, though some digital capabilities could be monetized.

Rick Wise of Stifel focused on Boston Scientific's impressive margin performance, specifically asking for more color on the drivers behind the strong drop-through from revenue to margins, the trajectory of gross margins towards pre-COVID levels, and how gross margin contributes to the overall operating margin goals, suggesting the 50 basis point annual improvement target might be conservative.

Answer

Executive Vice President and CFO Jon Monson expressed satisfaction with the quarter's performance and the expectation of 100 basis points operating margin expansion for the year, despite a $100 million tariff headwind. He attributed strong gross margin tailwinds to favorable product mix, driven by robust growth in WATCHMAN and EP, and the strong performance of the AGENT drug-coated coronary balloon. Monson anticipates gross margin to slightly improve year-over-year despite tariffs. For 2026, while specific details await the Q4 call, he expects continued operating margin expansion, with mix remaining a gross margin tailwind, annualization of tariffs as a headwind, and leverage through SG&A, maintaining R&D investment at 9-10%.

Rick Wise focused on Boston Scientific's impressive margin performance, seeking more color on gross margin drivers, the future trajectory of margins, and the role of gross margin in achieving operating margin goals, suggesting the 50 basis point annual improvement target might be conservative.

Answer

EVP and CFO Jon Monson expressed satisfaction with the quarter's performance and the expectation to expand operating margins by 100 basis points for the year, despite a $100 million tariff headwind. He attributed strong gross margin tailwinds to favorable product mix, particularly from high-growth areas like Watchman, electrophysiology, and the Agent drug-coated balloon. Monson anticipates a slight improvement in full-year adjusted gross margin and, looking ahead to 2026, expects continued operating margin expansion of approximately 50 basis points annually, driven by mix benefits, SG&A leverage, and R&D investment between 9% and 10% of sales, while acknowledging the annualization of tariffs as a future headwind.

Rick Wise of Stifel Financial Corp. asked about the implications of moving PFA procedures to the ASC setting, questioning if it would reduce concomitant WATCHMAN procedures and be a net positive. He also requested an update on the recently closed Sonavie (renal denervation) acquisition, including strategic rationale and key clinical timelines.

Answer

CMO Dr. Ken Stein responded that the ASC shift is a net positive, as the transition will be gradual and likely begin with simpler cases in less frail patients who are not typical candidates for concomitant procedures. CEO Mike Mahoney expressed enthusiasm for the Sonavie acquisition, stating a belief that its ultrasound technology will be preferred over RF. He noted that while Boston Scientific won't be first to market, its timing is not far behind, positioning the company well in what could become a multi-billion dollar market.

Rick Wise followed up on Kestra Medical Technologies' strategy of expanding into geographies with greater in-network payer opportunities, asking for a more granular understanding of the progress made in recent months and expectations for the current fiscal year. He also asked for clarification on the anticipated quarterly revenue flow for the remainder of the year, given the updated guidance.

Answer

President and CEO Brian Webster explained that payer additions are not linear but rather a 'sawtooth curve,' with a continuous upward trend benefiting the business model and sales representatives. He stressed the importance of providing reps with necessary tools, including insurance coverage, in new territories. CFO Vaseem Mahboob added that the financial model anticipates reaching high 50s in conversion rate from the current high 40s over the next couple of years, without needing to contract all 3,000 payers immediately. He reiterated that the raised guidance reflects a strong Q1 and expects a 'really nice steady increase' in top-line revenue throughout the remaining quarters, rather than a back-end loaded performance.

Rick Wise followed up on the strategy of expanding sales territories into areas with greater in-network payer opportunities, seeking a more granular understanding of recent progress and future plans. He also asked for clarification on the expected quarterly revenue flow for the remainder of fiscal year 2026 following the raised guidance.

Answer

President and CEO Brian Webster explained that payer additions are not linear but a "sawtooth curve," with gradual increases benefiting the business model. He emphasized that territory expansion is strategically focused on areas with known WCD demand and good payer coverage to ensure new reps are well-equipped. CFO Vaseem Mahboob reiterated that the financial model aims for conversion rates in the high 50s, not necessarily 80-90% immediately, and that the raised guidance reflects a comfortable Q1 performance. He expects a "nice steady increase" in top-line revenue through the remaining quarters of the year, rather than a back-end loaded flow.

Rick Wise inquired about the progress and granular understanding of Kestra Medical Technologies' strategy to expand into geographies with greater in-network payer opportunities, and sought clarification on the expected quarterly revenue flow for the remainder of the fiscal year.

Answer

Brian Webster (President and CEO) explained that payer additions are not linear but will continue to trend positively, benefiting the business model and territory expansion by ensuring sales reps have necessary insurance coverage. Vaseem Mahboob (Chief Financial Officer) reiterated the goal of reaching a conversion rate in the high 50s over the next couple of years and projected a steady, rather than back-end loaded, increase in top-line revenue throughout the year due to the commercial team ramp-up.

Rick Wise of Stifel Financial requested more detail on the key drivers of future operating leverage and the timing of its visibility, as well as any additional color on the company's innovation pipeline.

Answer

CEO Brian Webster explained that operating leverage comes from the company's volume-sensitive model, where revenue is expected to grow significantly faster than operating expenses. CFO Vaseem Mahboob quantified this by contrasting the 42% revenue growth outlook with a 20%+ OpEx growth forecast for fiscal 2026. On innovation, Webster described a multi-faceted strategy focused on enhancing the current product, adding new capabilities, and developing next-generation systems, but avoided specifics for competitive reasons.

Rick Wise of Stifel Financial sought more detail on the drivers of future operating leverage and when it might become more visible. He also asked for additional color on the company's innovation pipeline and upcoming new products.

Answer

President and CEO Brian Webster explained that the business model's volume sensitivity will drive revenue growth to outpace OpEx growth. CFO Vaseem Mahboob quantified this, citing guided 42% revenue growth versus 20%+ OpEx growth for fiscal 2026. On innovation, Brian Webster described a three-pronged strategy: extending the current product's advantages, adding new therapeutic capabilities, and developing next-generation platforms, while remaining guarded on specifics for competitive reasons.

Rick Wise inquired about the timeline for the ERP implementation and its long-term impact on the business, and also asked for the strategy to unlock value from the retained drinking water business.

Answer

CEO Bryan Hanson outlined the ERP timeline, with the next major cutovers in 2026 and completion by the end of 2027. CFO Wayde McMillan added that the primary benefit will be improved free cash flow in 2026 and 2027 as separation costs ramp down. Regarding the drinking water business, Hanson stated there is no urgent timeline for a transaction, as the focus is on taking the necessary time to find the right strategic home for it.

Rick Wise of Stifel asked for concrete examples of how new leadership and commercial changes are expected to drive growth in the MedSurg business. He also inquired about the progress and expected impact of the ongoing ERP system transition.

Answer

CEO Bryan Hanson explained that new MedSurg leadership is implementing commercial rigor, changing compensation to be more performance-based in 2025, and specializing the sales force. He expects these changes to drive underlying business improvement in 2025 but cautioned about offsets like SKU rationalization. Regarding the ERP transition, CFO Wayde McMillan noted that while four smaller countries are complete, the process is complex. Hanson added that the company hired experienced leaders to mitigate risks.

Rick Wise sought more detail on how new leadership, commercial rigor, and new products like Peel and Place will concretely impact the MedSurg business's growth trajectory. He also asked for an update on the ERP system transition, its progress, and its expected impact on the business.

Answer

CEO Bryan Hanson explained that the turnaround in MedSurg and other units is driven by new talent implementing commercial rigor and performance-based compensation in 2025. While innovation gaps will take longer to fill, he expects underlying business improvement next year from these changes and new launches. CFO Wayde McMillan noted the ERP transition is a major focus, with four smaller countries already implemented. He acknowledged some challenges but highlighted that the teams are learning and preparing for the larger North American rollout. Hanson added that they hired leaders with direct experience in such complex system cutovers to mitigate risk.

Rick Wise of Stifel inquired about the positive Core VNS study data for epilepsy, asking how LivaNova plans to leverage it for growth and patient access. He also asked about the CMS proposal to increase reimbursement for end-of-service (EOS) procedures and its potential impact in 2026.

Answer

Chief Innovation Officer Ahmet Tezel detailed the compelling seizure reduction data from the large study. Stephanie Bolton, President of Global Epilepsy, added that the clinical community has received the results well, which should strengthen the epilepsy franchise and potentially lead to earlier VNS therapy adoption. Regarding the CMS proposal, Ms. Bolton confirmed it would be a meaningful 48% reimbursement increase for EOS procedures if finalized for 2026, improving hospital economics and supporting the company's long-term market access strategy.

Rick Wise from Stifel Financial asked for more color on board shipment expectations for the second half of the year and sought a high-level perspective on when investors should expect to see top-line acceleration from the company's new strategic growth initiatives.

Answer

CFO Micah Young stated that quarterly board shipments are expected to be in the 60,000 to 65,000 range, noting that OEM ordering can be seasonal. CEO Katie Szyman indicated that more detailed timelines for the impact of new growth initiatives will be provided at the company's investor conference in December 2025.

Rick Wise from Stifel Financial Corp. followed up on the record StratEx scan levels, asking if their continuation would lead to meeting or potentially exceeding the revised guidance. He also questioned the level of conservatism in the new guidance and probed whether new competitive dynamics were a factor in the U.S. slowdown.

Answer

CEO Steve Williamson explained that while the StratEx rebound is a positive signal, the guidance accounts for the variability and extended timelines in converting scans to procedures. He characterized the guidance as prudent, reflecting current visibility while allowing for potential upside if initiatives accelerate faster than expected. Williamson explicitly confirmed the U.S. softness is not due to direct competition but rather operational capacity constraints and the complex, multi-stakeholder process of integrating the company's solutions into hospital workflows.

Rick Wise of Stifel Financial Corp. requested an update on the development and filing timeline for the company's photon-counting CT system and asked about the strategy to improve growth and margins in the Patient Care Solutions (PCS) segment.

Answer

President & CEO Peter Arduini confirmed the photon-counting CT program is on track for a second-half 2025 regulatory filing and will offer superior spectral resolution. For the PCS segment, he highlighted the impact of new leader Jeanette Banques and a strategy focused on a product refresh in anesthesia and monitoring, significant AI enhancements, and potential for tuck-in acquisitions.

An associate for Rick Wise asked for an update on the SpeedPlate fixation system, inquiring about its current utilization rate, supply availability for new designs, and its ultimate potential. He also asked how the finalized CMS reimbursement rates for 2025 might impact the company's gross margin profile.

Answer

CEO John Treace stated that SpeedPlate utilization continues to grow beyond the previously cited 40% and that new designs are in full supply and seeing good uptake. CFO Mark Hair responded that while the CMS rate increase is positive for patient access, the company does not expect it to materially alter its gross margin profile, which is still targeted around 80%.