Procedure Volumes and Capital Equipment
Q: Are you seeing any changes in procedure volumes or capital equipment demand?
A: Procedure volumes remain healthy globally, consistent with 2024 levels, and capital equipment demand is robust with a strong backlog, giving us confidence to raise our organic sales growth guidance for the full year.

EPS Raise Breakdown
Q: What contributed to the $0.10 EPS raise at the midpoint?
A: The EPS raise is driven by robust top-line growth and operational leverage. Below-the-line items like OI&E and tax rate had some favorability this quarter, but we're still targeting $250 million in OI&E and a tax rate between 14% and 15%, consistent with initial guidance. The combination of strong earnings and positive momentum gives us confidence in the $0.10 EPS raise from the midpoint.

M&A Targets and Focus Areas
Q: How are you thinking about M&A targets and areas of focus?
A: We have an incredibly healthy pipeline of mostly tuck-in deals that supplement our core businesses with new technology. The top five priority adjacencies remain of high interest, and most acquisitions will occur in the next couple of quarters. Our approach hasn't changed, and we're excited about the opportunities ahead.

Growth Beyond Current Innovation Cycle
Q: What are the growth drivers beyond the current innovation cycle?
A: We're in a constant rhythm of innovation, with new products like LIFEPAK 35 and Pangea contributing more next year. We expect continued high growth with no end in sight, as long as market conditions remain similar and we keep investing roughly 7% of our growing top line in new product innovation. Acquisitions of high-growth assets will also contribute to organic growth in the years ahead.

Mako Spine and Shoulder Launch Timing
Q: Are Mako for Spine and Shoulder robots still on track for 2024 launches?
A: Yes, we're looking at a fourth-quarter launch for Mako Spine and CoPilot, and Mako Shoulder will be launched by the end of this year. Regulatory timelines can shift launch dates slightly, but there's no significant change in the timeline ,.

International Mako Installations
Q: What trends are you seeing internationally with Mako installations?
A: International Mako installations are increasing, similar to where the U.S. was 5–6 years ago. Countries like India, Japan, Korea, and parts of Europe are showing strong uptake. This expansion is a leading indicator for significant high growth in implants, and we expect momentum to continue.

Margin Expansion Outlook
Q: Can you provide an update on the operating margin expansion target?
A: Our target is 200 basis points of expansion over 2024 and 2025. We're on track for roughly 100 basis points this year, with stronger expansion expected in the second half. Margin improvements will come from operational leverage, gross margin, and operating expense efficiencies.

Pricing Trends in Orthopedics
Q: What's the outlook on pricing pressure in Orthopedics and Spine?
A: Historically, we've had price declines of 3–5% in Orthopedics. Through contract discipline and Mako's closed system, we've reduced negative pricing. While we don't expect positive pricing, we're confident about less negative pricing going forward.

Capital Spending Environment
Q: How is the capital spending environment affecting your portfolio?
A: The capital environment is strong, with hospitals looking to increase CapEx spending. We see opportunities across the board, and our healthy backlog supports strong capital sales throughout the year.

Smoke Evacuation Growth
Q: What's driving the strong growth in smoke evacuation sales?
A: Smoke evacuation grew almost 50%, driven by great commercial execution, strong demand, and improved supply chain. High double-digit growth is expected to continue, especially as more states mandate smoke evacuation.