Ladies and gentlemen, thank you for standing by. Hello, welcome to Enovis first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. Thank you. I would like to turn the conference over to Kyle Rose, Vice President of Investor Relations. Please go ahead. Good morning, everyone, and thank you for joining us today for our 1st quarter 2026 earnings conference call. I'm Kyle Rose, Vice President of Investor Relations. Joining me on the call this morning are Damien McDonald, Chief Executive Officer, and Ben Berry, our Chief Financial Officer. Our earnings release was issued earlier this morning and is available in the investor section of our website, enovis.com. We also posted a slide presentation to accompany today's call on our website. Both the audio and the slide presentation will be archived on the website later today. During this call, we'll be making some forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking estimates are subject to risks and uncertainties, including those set forth in the safe harbor language in today's earnings release and in our filings with the SEC. Actual results might differ materially from any forward-looking statements that we make today. The forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them except as required by law. For further details regarding any non-GAAP financial measures referenced during the call today, the accompanying reconciliation information can be found in our earnings press release and in the appendix of today's slides presentation. With that, let me turn it over to Damien. Damien? Hey, thanks, Kyle. Good morning, everyone. We're encouraged by our start to 2026, with the first quarter results reflecting solid execution and continued progress advancing our innovation-led strategy. Our priorities, commercial execution and innovation, operational excellence, and financial discipline continue to guide our actions. Since I joined 12 months ago, we have made meaningful changes to our operating model and senior leadership teams, implemented more rigor around daily management, and changed company incentive plans to align with our strategic objectives. We still have more work to do to fully capture the opportunities in front of us. However, I'm energized by how the team has embraced these changes and the One Enovis mindset. Turning to the first quarter results, I'm pleased with our continued share gains in both our business segments. Our innovation pipeline continues to advance while we benefit from the contributions of new product launches. In the first quarter, we delivered organic revenue growth of 3%, with 6% organic growth in Recon and 1% organic growth in Prevention & Recovery. These results include the impact of fewer selling days in the quarter, which represented an approximate 240 basis point headwind to growth. On a days adjusted basis, organic growth was 6% at the company level, with 8% growth in Recon and 3% growth in P&R. In U.S. Recon, we grew 8% organically in the first quarter, led by 10% organic growth in extremities. Our Augmented Reverse Glenoid System, ARG, continued to gain traction and was key to driving double-digit growth in shoulders. In hips and knees, we grew 6% organically, and we continue to reinforce our portfolio to compete across hospital and ASC settings. Nebula continues to be a driver of growth in the majority of new instrumentation sets going to competitive users. We're still in the early rollout of Nebula, which unlocks a meaningful segment of the U.S. hip market for our sales teams. Internationally, we grew 3% in Recon on an organic basis, including double-digit growth in extremities. We continue to strengthen our global portfolio with cross-compatibility of implant systems and are positioned for sustained above-market growth rates in 2026 and beyond. Innovation remains key to our strategy. We have a robust pipeline of new product introductions planned for the next 24 months. We showcased many of these, including ARVIS at the AAOS conference in New Orleans in March. We've started to deploy ARVIS through a flexible business model with the primary goal of driving implant utilization. ARVIS shoulder cases have started and are encouraged by the early feedback. Our commercial teams are using this launch as an opportunity to strategically target new customers, and we expect to see continued adoption in the shoulders as we move through 2026. I'm also excited to note we recently had our first OUS shoulder case in South Africa, and we see demand for this technology continue to build. Moving to P&R. This segment grew 1% year-over-year on an organic basis and 3% on a days adjusted basis. Global bracing grew 3% on a days adjusted basis, driven by revenue cycle management and upper extremity bracing. Bone stim was another source of strength for the quarter, delivering high single-digit growth. A lot to be excited about across the whole business, and I'll turn it over to Ben to walk through the financial details. Thanks, Damien. Hello, everyone. We reported first quarter sales of $589 million, up 5% versus the prior year on a reported basis. Reported growth includes a 420 basis point tailwind from foreign currency, a 240 basis point headwind from selling days, and a 210 basis point headwind, primarily related to the divestiture of Dr. Comfort. Days adjusted organic growth was 6% at the company level, 8% Recon, 3% in P&R, with both segments growing above the market. As part of the conclusion of our previously disclosed SEC comment letter process, we revised our definition of adjusted EBITDA beginning in Q1 2026 to no longer adjust inventory step-up charges associated with acquired businesses. While we continue to believe that our prior non-GAAP presentation was appropriate under the guidelines and provided meaningful comparability for investors, we updated our presentation to align with the SEC staff position on this adjustment. For reference, we have provided a table in the appendix of our Q1 slide presentation that outlines the impact of this change. We had positive business mix in the first quarter, leading to adjusted gross margins of 62%, an underlying improvement of 40 basis points driven by favorable mix, ongoing productivity, and realized synergies in our manufacturing and supply chain operations. This was slightly diluted by tariff impacts as we absorbed, mitigated, and continued to offset a portion of the roughly $4 million in tariffs we paid in the quarter. Adjusted EBITDA margin was 17.6%, down 10 basis points year-over-year on an underlying basis, mostly driven by increased R&D investments and phasing of expenses. Our first quarter effective tax rate was 21%. Interest expense was $9 million for the quarter, flat versus prior year. Overall, we posted adjusted earnings per share of $0.89, representing 10% underlying growth versus prior year. We remain focused on disciplined capital allocation. Free cash flow improved $16 million year-over-year in the first quarter. We continue to expect free cash flow conversion of greater than 25% in 2026, as we've laid out in our prior calls. Turning to guidance, we are reaffirming our 2026 guidance. We expect 2026 revenues to be split evenly between the first and second half of the year. Commercial execution is critical to delivering our 2026 results, and we are seeing some early benefits across both of our business segments. In Recon, our new products remain a bright spot, and we have a healthy pipeline of account conversion targets. In P&R, growth remains stable and slightly ahead of market. For the company, international market volumes have experienced some volatility in the first part of the year, but we expect them to recover to normal levels in the balance of the year. Our Middle East revenue exposure is about $1 million-$2 million a month. We expect to absorb this new headwind as well as the resulting inflation in the supply chain with no change to our original guidance. To summarize, the first quarter was a solid start to the year, and we remain confident in the power of our diversified portfolio and the continued progress we're making towards sustainable, profitable, capital-efficient growth. Kyle? Thanks, Ben. In an effort to accommodate everyone in the Q&A session and keep things to a reasonable time, we ask that analysts limit questions to one question and one follow-up. You are welcome to rejoin the queue, and we will fit you in if we have time. With that, operator, we'd now like to open it up to questions. Great. Thank you so much, Kyle. Just a quick reminder before we start the Q&A, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question, simply press star one again. Thank you. We will now take our first question from Ryan Zimmerman of BTIG. Please go ahead. Good morning. Good morning, Damien, Ben, Kyle. Thanks for taking our questions. Good start to the year here. You know, U.S. Recon was really a nice standout in the quarter, particularly when you look at it in the context of, you know, some of the larger companies that reported, you know, their hip and knee numbers. You know, Damien, I'm wondering if you could kinda talk to us about how you see the durability of U.S. Recon. If I look at the comps, you know, they get actually easier over the balance of the year. You know, what's holding you back from maybe, you know, taking that guidance up at this point, given those dynamics? I have a follow-up. First of all, good morning, Ryan. I'll jump in first, I'll let the guys also contribute. Look, great question, I have to say, first of all, I'm really proud of how the team are executing. There's a lot of good that's happening in that organization. The way they're approaching customer segmenting and targeting, account acquisition and penetration. I think the way they're thinking about pricing discipline is really working for them. I think that team is doing a great job, and you see that in both hips and knees and the extremities numbers. Why not take up guidance? I think our big issue is it's a very dynamic macro environment. We're working to execute our plans. As you might suspect, there's a lot of noise in the markets. We just wanna make sure we keep the team focused on executing what we committed to for the full year. Got it. Okay. That's fair. You know, as a follow-up, Ben, you know, you did call out the improvement in free cash flow. I think that's been, you know, one of the things maybe holding investors back is that enhancement of free cash flow for the year. You know, again, appreciate your sticking to the guidance here. Talk to us about kind of, you know, the next few quarters in terms of free cash flow generation, how you see things kind of playing out, what's on the horizon from a capital expenditure standpoint or lack thereof. You know, what gives you confidence that you can continue to kind of target 25%+ for the year? Yeah. Thanks, Ryan. Thanks for the question. You know, free cash flow for us builds over the course of the year. I think you've seen that pattern from us, where we traditionally have negative free cash flow in Q1, given that's when we pay out bonuses. That's also when we have some phasing of expenses like sales meetings and the AAOS that always fall in Q1. Generally, we start off a little bit soft in cash, and then we build over the course of the year. We would expect that to continue here in 2026. I think you saw in first quarter some of the step down and some of the one-time costs that we've called out that will continue to decline over the course of this year, over the course of the years in coming. Overall, I think we are, you know, from a CapEx investment, actually continuing to invest heavily in CapEx to support the growth of the Recon business. So CapEx as a percentage of sales, as I've told, you know, people in the past this year will be, you know, about in line with what we saw last year, maybe a little bit below. Overall, we feel good about where we're starting here, year-over-year improvement of $16 million, and still feel confident in the guidance that we set out at the beginning of the year. Thank you. Thanks, Ryan. Next question comes from the line of Vijay Kumar from Evercore ISI. Please go ahead. Hi, Damien. Good morning, and thank you for taking my question. Hey, I just wanna dive a little bit on the Q1 performance. I know there was some noise around whether one of your competitors had some disruptions. Q1 also had fewer days, right? Despite all of that, U.S. Recon did 9%, you know, high singles organic. How, you know, when you put that 9% into context for us, right? When you look at the back half, is this sustainable? You know, what could get better in back half, right, when you look at first half versus back half? I think what we're excited about is the release of ARVIS. We just released that at AAOS, and I think the demand that we're seeing for that is really terrific. I think people are looking for a portable, scalable, cost-effective solution, especially as things move to the ASCs in the U.S. I think for us, what gives us a lot of confidence about the year is as ARVIS you know, continues to roll out and we onboard and certify surgeons, that gives us support in the extremities market, particularly around shoulder. I think the way that the foot and ankle business performed in the quarter was really solid too. Big shout out to them for the way they performed. I think so extremities for us continues to be an opportunity that is growing, a highlight for us for quite some quarters now. The other thing is, I think Nebula is really continuing to do great things in the hip area. I mean, that's a market that we were locked out of, and I think someone reported the other day that, you know, something like 40% of their business now is in triple taper collared stem hips and, you know, we're not anywhere near that sort of penetration yet. As I mentioned before, something like 50% of our knee surgeons don't use our hip because we haven't had an offering. You know, we've got a funnel of opportunity to convert those people over to our hip in a market that's been largely dominated by J&J and Zimmer. Yeah. I'd just jump in. Hey, Vijay. You know, the markets are dynamic. The supply chain is dynamic right now. You know, we have momentum building across the anatomies with the launches that we have, with the cross-compatibility that we've done now on the shoulder, with, you know, putting all of these assets together with the M&A that we've done over the last several years. We're encouraged by the start. We see opportunity, as Damien mentioned, through commercial execution to continue to build muscle here. You know, it's gonna take a little bit of time, but we're excited marrying the innovation pipeline that we have with the opportunities that are in front of us with regards to, you know, still having low market share. Overall, we're confident in the direction that this business is heading, and look forward to see how it continues to perform throughout the course of the year. Understood. Maybe Ben, one for you on the margin performance in the quarter. I know you spoke about the reclassification on EBITDA. Just to clarify, that doesn't have any free cash flow impact, right? No changes to free cash. You know, how to think of margin cadence given the Q1 performance? Yeah. Thanks, Vijay. There's a good slide in the appendix of the presentation materials that we put that lay out the inventory step up that would have occurred in the prior year. Again, this is acquisition related. As we brought LimaCorporate on, it's the difference between the acquired inventory and a fair market value assessment. It's really just accounting change that's one time in nature. We feel it's appropriate to, you know, look at it both ways. You know, you have all the information there. Underlying performance, as I said in my prepared remarks, 40 basis points of gross margin improvement and slightly backwards on EBITDA, but that was partially 'cause we had a really strong start last year with the extra days. Sorry, margin cadence. How to think of margin cadence for back half? You know, margin cadence for the back half I think will continue to improve. Understood. Year-over-year. Thank you, guys. Cheers, Vijay. The next question comes from Jeff Johnson from Baird. Please go ahead. Thank you. Good morning, guys. Just wanted to stick on the ARVIS questions. Damien, you know, sounds like placements here in the first quarter got off to a good start. As you're thinking more about that placement model, should we think about that being a long-term benefit maybe to pricing in your recon business? You can lock these guys in at more consistent pricing. Does it maybe bring some more stability to your hip, disc, and knees business and maybe the extremities business? Again, if you can lock these guys in, you don't have to worry about any kind of customer attrition or anything like that. Just what are the benefits besides just, you know, having a good technology out there that is appealing to these surgeons? What are some other benefits we should be thinking about with ARVIS over the next year or two? Thanks. Yeah. Thanks, Jeff, and good morning. Our focus out of the gate is on shoulder, and then knee. I think if you think about what this offers competitively is a chance to have conversations with competitive surgeons and bring them over to our portfolio. There's a competitive conversion opportunity. It's a market share gain, and obviously volume attached with that. I think, you know, again, what we're offering is a very flexible model. You know, you can capital purchase, you can lease, you can fee per case with a volume commitment. We also believe that, you know, we're offering a scalable, portable model that allows people to work between multiple venues. As you know, a lot of our customers work in multiple venues and can take this technology with them. We think that ease of use, portability, scalability is an opportunity for us to, you know, lock in people that are current customers, but also importantly, competitive conversions. Yeah. Jeff, I'd just jump in there. I mean, we didn't really see, I'd say, any material revenue from ARVIS in the first quarter. We would expect this to continue to build as we gain momentum with the launch. Yeah, understood. Ben, maybe just one clarifying question, 'cause I am getting a couple questions from investors. I just wanna make sure I understand. On the reclass that you talked about today on the EBITDA side, you know, was that driven by a change in your own philosophy? It sounds like you mentioned on the prepared remarks that maybe it was in conjunction with the SEC. Is that a new recommendation from the SEC more broadly for the market? Just wanna understand, just given that, you know, this kind of makes last year's margins or the margin performance this year look better. Just wanna understand the timing on what drove this decision. Thanks. Jeff, I mean, as we had put in our 10-K last year, we had a couple open questions from the SEC through the comment letter process. We had some good, robust dialogues with the staff. Felt like we, you know, had good alignment on most things. This one for us, we still feel that the one-time nature of, you know, inventory step-up, you know, especially when you acquire a Recon business that has lots of inventory, really does distort the numbers. We felt it was responsible for us to, you know, show comparability. You know, SEC staff had a difference of opinion here and we had to conform, we chose to conform to their dialogue here. We would expect that to continue across the market, you know, based on our dialogue with them. You know, I can't speak for other companies and their dialogues. Very helpful. Thank you. Thank you so much. The next question comes from the line of Young Li from Jefferies. Please go ahead. All right, great. Thanks for taking the questions. I guess to start, maybe just on OUS Recon a little bit. You know, doesn't get as much attention, but I would say, you know, pretty solid strength of double-digit growth recently. You know, this quarter there's some Middle East noise, maybe some OUS market softness. Can you maybe just expand a little bit on the market softness comment and the pathway forward for sustained above-market growth for the rest of the year? Good morning, Young. We were just with that team last week and talking through a lot of the dynamics there. It was definitely a slower start to the year compared with our Q4 momentum. You know, that's a challenge, but I would say, and you alluded to this, there's a lot of market volatility. You know, there's doctor strikes, nurses strikes, pharmacy strikes, waiting list increases. Still with all of that, we outgrew the market and, you know, that's with, you know, third-party market data. I'd say the team executed really well in a very dynamic market situation. We still believe, based on our modeling, that we're going to outgrow the market through the next three quarters for the full year. We do recognize it's pretty challenging and Ben outlined what we think the impact of the Middle East is on our, on our quarterly run rate. Okay, great. Very helpful. I guess was wondering if you can maybe give us an update on your ASC market share currently, where you are versus the industry. You know, seems like momentum there continues for the industry. Yeah, I'll take that one, Young. We continue to see our penetration in ASCs increase. I think if you look at where we're at on the knee side, you know, primary knee is over 25% now in the ASC. You know, shoulders continue to climb, you know, now closer to the teens. You know, I'd say in between the two is where we're at in hip. Again, I don't know what's being published out there with competition. I don't see good data on this, we believe that we're slightly ahead of the market in terms of the mix of ASC of our business versus where some of the competitors are. All right. Great. Thank you very much. Thanks, Young. Thank you so much. Next question, operator. The next question comes from the line of Robbie Marcus from JP Morgan. Please go ahead. Great. Good morning. Thanks for taking the questions. Maybe to start, do your best to answer given the market share, but given all the disruption in the first quarter and a lot of investor fears around weather and ACA subsidies and Medicaid, you know, how do you feel about your end market growth? I don't know if you're willing to, you know, put what you think growth rates are on the different ortho and bracing markets where you participate now. How do you feel about some of these headwinds that investors are concerned about? Are you see them materializing? 'Cause I'd venture to say the answer is no, not really, but would love to hear your take on end market growth and some of the headwinds. I'll leave it at that. Go ahead. Yeah. Hey, Robbie, this is Kyle. I mean, I think the way we've seen the year start, I mean, look, there's obviously some, you know, weather. There's been disruptions with, you know, things like cyberattacks on some competitors. We've got, you know, sales force restructuring with another competitor. I think overall, we think underlying market demand and procedure volumes are stable and healthy as we've seen over the last several years. You know, we don't think that there's as much of a pent-up demand with respect to what we saw coming out of COVID. I think that's broadly been worked through. When we think about the overall market growth, and this is more of a U.S. comment, if we think about U.S. hips in the 3%-4% range, you know, U.S. knees in the 4%-5%. When you think about shoulders, 5%-7%. When you think about the shoulder market, we've got more exposure to the reverse side of that market, which we think is growing at the higher end of that prior range. In the international markets as a whole, we think that that's, from a Recon perspective, growing in the 4%-6% in the last several years. As Damien outlined, a little bit slower start to the international market to start the year. There's nothing that we're seeing in our end markets that suggests that, you know, we've seen any material changes in the fundamentals from a demand perspective. Yeah. I'd just jump in there too a little bit, Robbie. I mean, I think procedural demand trends are still very robust. We, we believe the need to have products like ours for the macro needs of patients are gonna continue to drive growth in the market, you know, from now into the future. We, we feel pretty good about that. I mean, of course, we went through all of the similar things, you know, with some of the weather and some of the other things that Kyle talked about. Overall, I think we think the end markets are still robust from a demand standpoint. Pricing, you know, for us is a little bit back to norm on the Recon side, so a little bit down. We think that continues. We also think the shift to ASC puts a little bit of pressure there on pricing. Overall, we think in terms of, you know, demand drivers, you know, those are still pretty robust. Fantastic. Thank you very much. Thanks, Robbie. Thank you so much. Our next question comes from the line of Priya Sachdeva from UBS. Please go ahead. Hey, guys. Thanks so much for the question. I'd love to just go back to guidance really quickly, specifically thinking about some of the macro dynamics that are going on and, you know, how you're thinking about low end versus high end of guidance and what you're baking in, you know, for either side of the range. I guess maybe we're just trying to understand how de-risked 2026 guide is from some of these dynamics. Just one follow-up. Hi, Priya. Thanks for the question. I think, you know, the way we think about guidance is generally point people towards the midpoint. You know, good start to the year for us. Again, Damien laid it out. There's still a lot of uncertainty. We're trying to be prudent with regards to, you know, seeing how more of the year plays out before we make any changes there. Overall, I think we feel like we got off to a good start. We do think Q2 will have some impacts on it from the war-related impacts. Overall, we still feel comfortable that we can perform within the ranges that we set at the beginning of the year. Okay, great. Maybe just one quickly on P&R. You know, you did call out some of these tailwinds that are on the horizon for this segment. If you could just maybe walk us through some of these potential drivers of growth and, you know, where you could really see this business as growing sustainably once those are fully realized. Thanks so much. I really like how the teams are starting to execute here and, you know, we've reshaped the portfolio. I think they've got a great competitive offering. We've been taking market share and growing above market for multiple quarters, you know, both in the U.S. and internationally. You know, I like the swagger of the B&S team in the U.S. I think, you know, they're doing a great job there, you know, selling our differentiated portfolio. We've got new products coming in that segment as well. The opportunity, I think, is really for us to take. There's these tailwinds that we alluded to with cold therapy and the NOPAIN Act. You know, that's an education opportunity for us and, you know, the team's taking advantage of that account by account. The OA opportunity, I think is another thing for us. We know OA is an increasingly complex disease state with a lot of pain associated with it, where we think we've got good competitive offerings to support it. I like how that team's executing in the U.S. and internationally. You know, there's a lot going on. You know, the French team I think are really killing it, which is tremendous to see, and we've still got opportunities to improve our performance in several geographies and the leadership over there is very focused on that. Thanks so much. Thanks, Priya. Thank you so much. Our next questions come from the line of Keith Hinton from Freedom Capital Markets. Please go ahead. Great. Thank you. I just have a question on P&R on the gross margin side. It looks like it was up about 100 bips year-over-year. Can you just talk about sort of the tariff impact for P&R in the quarter, how much of that you were able to offset with price or other mitigation efforts and kind of how we should think about going forward, you know, the ability to expand gross margins in P&R in a more stable tariff environment or, you know, how much the exposure is to continued volatility in tariffs? Yeah, thanks. You know, we're excited about the progress that we continue to make in P&R. I think what we've talked about in terms of, you know, now having over 50% of the portfolio growing mid-single digits. A lot of those products that are growing faster come with higher gross margins. We're getting some mixed benefit on the P&R side. We also have been longer at driving the business system within P&R, you know, to really start to see the fruits of that read out with regards to some productivity that are offsetting some of these tariff headwinds that I mentioned. You know, I mentioned in my prepared remarks that we paid another $4 million of tariffs in the quarter. That is, you know, mostly all in the P&R side of the business. We're overcoming that, and we see a long runway here of gross margin improvement opportunities within P&R as we continue to shape that portfolio. We're gonna continue to work at it. We're continuing to mitigate as much as we can some of these inflation headwinds that are coming our way. We have increased prices in some cases to drive offsets. We continue to drive the shifting of production to lower cost areas to offset some of the price changes as well from the supplier side. Overall, we have a pretty robust offense to drive productivity to offset inflation that we see every year. Great, thanks. Then, just in terms of the conflict of the Middle East, can you talk about that less from a revenue perspective and more from a cost perspective in terms of volatility in the price of oil? Just how much, you know, how much of COGS is oil exposed either from freight or petroleum derivatives, involved in packaging? Have you seen any issues with traveling based on disruptions to flights, and just, you know, how any of these things are sort of baked into guidance? Yeah, we're seeing a little bit of that in all aspects of what you described. I think the most impact we see in our direct results is with the freight, you know, freight inflation. Overall, we feel pretty well that, you know, our supply chain, as a company is diverse and somewhat protected, to where we can, you know, drive alternative measures to offset some of these challenges. There is some inflation that's hitting us that we're having to offset. You know, all, as I mentioned in my prepared remarks, we believe that we'll be able to offset or absorb within the guidance that we've provided. Great. Just very quickly, clarifying. In terms of the inventory turn for the different businesses, when might we start to see more of an impact, you know, from a quarterly basis on P&R versus Recon in terms of higher freight? Well, you know, on the P&R side of the business, we turn inventories and, you know, call it four to six months, that generally reads through relatively quickly. P&R side, or on the Recon side, it's longer. It's a little over one year. Overall, a lot of our freight runs through the period costs as well. I'd say it's a little bit of a blend of what gets amortized versus what rolls through in a period standpoint. Great. Thanks so much. The next question comes from the line of Caitlin Roberts from Canaccord Genuity. Please go ahead. Hi, guys. It's Michaela on for Caitlin. Thanks for taking the question. Maybe just going back to ARVIS. You talked a little bit about this, but can you maybe give some more color on what the surgeon and hospital reception has been like, and maybe if you can talk to shoulder specifically? Yeah, I think this has been one of the really encouraging things for us. The early limited market release where we were working with, you know, friends and family, was, you know, very positive. The case numbers were filled very rapidly in multiple centers. I had a chance to see some of our partners working on it at the Mayo Clinic right at the end of the year. The form factor is considerably different with the Gen two, which I think makes a big difference. The software improvements have been, you know, really tremendous in terms of anatomy registration and the acuity of the visualization. We're very encouraged by what we're hearing from the initial limited market release and now the demand for application in the field. I think this is exciting for us. Great. Thanks so much. Thanks, Michaela. Thank you so much. The next question comes from the line of Mike Matson from Needham & Co. Please go ahead. Great, thanks. I have a follow-up question on cash flow, free cash flow. It looks like your operating cash flow improved significantly year-over-year, which is great. When I look at the CapEx or purchase of property, plant equipment and tangibles, that was about $10 million larger than last year, you know, negative $53 million. Can you maybe just talk about what's in that number? I mean, how much of that is kind of like instrument sets and things like that versus integration expenses or other components? Thanks. Hi, Mike. Thanks for the question. You know, it's mostly instrumentation. You know, as you know, we're investing to grow the Recon business, and a little over half or about half of our CapEx is instrumentation driven. I'd say this year is a little bit more front half loaded there. I'd say that's the major drivers that we're just investing for growth. We do have, as I've laid out in the past, you know, some investment that's happening with regards to manufacturing integration. Those costs are reading through as well, which are driving some of the increase. Overall, I'd say it's Recon driven, primarily instrumentation with a little bit of ops for manufacturing integration. Okay, great. Just wanna ask one on the foot and ankle part of your extremities business. I didn't hear any comments there, but I know that market's been kind of challenged lately, so maybe just comment on your business and what you're seeing in the market. I gave a bit of a shout-out in one of my earlier answers on this, that I think we saw a slight rebound in the market in the U.S. The, you know, we've talked about the challenges in that space, and so have some of the competitors, particularly in the elective procedures. I think, again, what matters here is a focus on innovation, and a focus on, you know, being very responsive to customers, and that's reading through, and I think that's why the team had a really solid quarter. Okay. Got it. Thank you. Thank you so much. Again, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from the line of Steve Lichtman from William Blair. Please go ahead. Thank you. Good morning, guys. I guess first just going back to the ASC opportunity. In what ways are you able to leverage the ARVIS relaunch, you know, and of course, the product offerings you can provide across both Recon and P&R, to continue to expand in what's obviously an important growing market? Yeah. I think one of the things for us, Steve, and good morning, is the opportunity there about the continuum of care. You know, often patients aren't seen as a whole patient. They're seen as episodic in one particular implant or B&S or Recovery Sciences portfolio. I think one of our key opportunities is to expand that aperture so that people do think about the whole patient. And that's certainly a conversation we're having. I think ARVIS is a great accelerator for that. You know, it makes us very visible. It gives us every reason to be a partner with the ASCs, whether it's a corporate ASC or an owner-operated ASC. One of our focus areas for the team is, you know, how to materially change the trajectory of our full offering in those facilities. It's a strategic question for us. We're seeing the early parts of that read-through. We've got a number of interesting opportunities that are already starting to materialize. For us, thinking about how to really action this over the next, you know, three to five years is a key opportunity. Okay, great. Just, Ben, going back to cash, you know, good to see some of the costs coming down as you talked about heading into the year. What is your outlook for the Strategic Transactions Cost line as you look out over the next few quarters? Yeah, I would expect them to improve year-over-year, Steve. Again, this, like I've mentioned before, this is the third year of really a heavy integration of the Lima business that we acquired. I would see those costs to continue to step down pretty significantly as we enter next year and beyond. Overall, we're still making some investments to finish the integration there. Okay. Understood. Thank you. Thanks, Steve. Thank you so much. Our next question comes from the line of Ryan Zimmerman from BTIG. Please go ahead. Hey, guys. Sorry, I just couldn't get enough. I had to ask a follow-up. Just two quick ones for me. I didn't hear, Ben, do you get those selling days back? I think the annual is a net neutral, when do you get those selling days back? Two, I didn't hear anything on tax refunds or tariff refunds. You know, what are you assuming? Again, I apologize if I missed that, what are you assuming for tariff refunds at this point or not assuming? Yeah, no problem, Ryan. We get one day back in Q2 and one day back in Q4. That's really how it plays. That's more like half a day, actually, in Q2. From a tariff refund standpoint, we've submitted all our claims with regards to tariffs paid, but our assumption is that we will not get any refund for tariffs that we've paid and that we'll continue to, you know, pay tariffs at the rate that we're currently seeing. That's what's embedded in our current outlook. Understood. Thank you. Thank you. We have reached the end of the Q&A session. I will now turn the call back over to Damien, CEO, for closing remarks. Please go ahead. Hey, thanks everyone for joining us today. With a solid start to the year, but we cannot lose sight of continuous improvement and winning each day. We're operating in an increasingly dynamic macroeconomic and geopolitical environment, and it's more important than ever that we remain focused on disciplined execution. Next week marks my one-year anniversary at Enovis, and I'm inspired, very inspired by the opportunities ahead of us and the strength of our team. I'd like to thank all of our employees for their ongoing commitment, focus, and dedication to supporting our customers and improving patients' lives. We really appreciate your continued interest, and we support your forward-looking updating models and look forward to the progress throughout the year. Thanks so much, ladies and gentlemen. This concludes today's call. Thank you all for joining. You may now disconnect.