Good morning, ladies and gentlemen, and welcome to the Zimmer Biomet second quarter 2021 earnings conference call. If anyone needs assistance at any time during the conference, please press the star followed by the zero. As a reminder, this conference is being recorded today, August 3rd, 2021. Following today's presentation, there will be a question and answer session. At this time, all participants are in a listen only mode. If you have a question, please press the star followed by the one on your push button phone. I would now like to turn the conference over to Keri Mattox, Senior Vice President, Investor Relations, and Chief Communications Officer. Please go ahead. Thank you, operator, and good morning, everyone. I hope you are all well and safe. Welcome to Zimmer Biomet's second quarter 2021 earnings conference call. Joining me today are Bryan Hanson, our Chairman, President, and CEO, and EVP and CFO, Suky Upadhyay. Before we get started, I'd like to remind you that our comments during this call will include forward-looking statements. Actual results may differ materially from those indicated by the forward-looking statements due to a variety of risks and uncertainties. Please note we assume no obligation to update these forward-looking statements, even if actual results or future expectations change materially. Please refer to our SEC filings for a detailed discussion of these risks and uncertainties, in addition to the inherent limitations of such forward-looking statements. Additionally, the discussions on this call will include certain non-GAAP financial measures. Reconciliation of these measures to the most directly comparable GAAP financial measures is included within our Q2 earnings release, which can be found on our website, zimmerbiomet.com. With that, I'll now turn the call over to Bryan. Bryan? All right, great. Thanks, Keri, and thanks to everyone for joining us for our call this morning. As we're all aware, obviously, given the news recently, COVID is still very much with us, and we're watching it very closely, as you can imagine. Given that even, we've seen some real progress since our last call, and I think that's obvious to everybody. The world has not returned to normalcy yet, but travel is returning. We have more team members in our offices, and I am personally looking forward to attending the AAOS Meeting, in about a month in San Diego. Really looking forward to that meeting. We have a lot of great technology that we're going to be able to showcase there and just really happy it's going to be in person again, finally. I want to, in that same vein, thank our team again for their dedication to safety and really just across the board, their commitment to making all of our ZB manufacturing facilities and offices as safe as we possibly can. You, our team members, are the driving force for this progress that we've seen in our own facilities and certainly in our communities as well. Also want to say that I hope in our investor community that you're continuing to stay safe and have been hopefully able to travel over the last few months to see family and friends. This is an opportunity for us to take advantage of some travel as we begin to turn to more of a normal environment. Of course, not there yet, and we know this isn't happening consistently anyway in all regions, but overall, we are encouraged, and we're doing our part to keep this moving forward. Every single day, we are supporting our customers and patients that they serve. We're doing this safely, obviously. This is a big focus for us as a mission-driven organization to be there for our customers so they can complete the procedures that they have, and we can make sure that the patients receive the care that they deserve. With that, I think it's a good lead into our Q2 call. Today, I'm just going to spend here in the beginning, just a few minutes on a couple of quick remarks, and then I'm going to turn it over to Suky, who's going to get right into a deeper view of our Q2 results, and I think most importantly, our 2021 guidance view on a go-forward basis. Then I'll come back to close out the call with some updates on our active portfolio management and product and pipeline highlights. I'll wait to do that after he provides the guidance information. Just to set him up a little bit, overall, let me just say that our performance in the quarter improved meaningfully from the first quarter of this year, and that was pretty much across all regions and product categories. As recovery from the global pandemic continued to take hold, we saw that recovery in our procedures also move in the right direction. While we certainly anticipate some ongoing COVID pressure, we currently think it's going to be manageable by hospitals, and we expect that the recovery will continue to build sequentially throughout the second half of 2021. Again, not out of the woods yet, but we do believe, thanks to the hospital's ability to better manage these COVID patients and the vaccine rollout continuing, we believe it'll be manageable through the back half of the year, again, moving in the right direction. With that, I'm going to turn it over to Suky for our financial update, and then I'll be back with you in a few minutes to close out the call before the Q&A. Thanks, good morning, everyone. For this morning's call, I'm going to discuss our Q2 results, walk through the updates we've made to our full year 2021 financial guidance, and provide color around our current expectations for the third and fourth quarter. Moving forward, unless otherwise noted, my statements will be about the second quarter 2021 and how it compares to the same period in 2020, and my revenue and P&L commentary will be on a constant currency or adjusted basis. I'll provide constant currency revenue growth versus 2019 as we think that is a more relevant comparison for this quarter. Net sales in the second quarter were $2.27 billion, a reported increase of 65.3% and an increase of 60.7% on a constant currency basis versus the same period in 2020. When compared to the second quarter of 2019, net sales were flat on a constant currency basis, and we did not have a material impact from selling days. Overall, consolidated and regional results were slightly better than the expectations we provided on our last quarterly call, with growth versus 2019 in the Americas and Asia-Pacific and sequential improvement in EMEA. For the quarter, the Americas increased 68.3%, or up 1.9% versus 2019. We continue to see variability by country within the region, with the U.S. growing 66.2%, or 3.3% versus 2019. EMEA grew 80.5%, or down 7.3% versus 2019, with continued COVID pressure being a factor. We did see improvement in EMEA as we moved through the quarter, and we expect that trend to continue through the back half of this year. Lastly, Asia-Pacific grew 24.4%, or 2.8% versus 2019, in spite of some unexpected headwinds. While the region has been largely stable in recent quarters, it was impacted late in the second quarter by channel inventory contraction in our knee and hip categories within China in advance of the rollout of volume-based procurement, or VBP. In addition, we saw a resurgence and increase of COVID-19 in a number of markets, including Japan. Despite these headwinds, the region continued to post growth. Turning to our business categories. The global knee business increased 72.2%, or down 6.3% versus 2019. In the U.S., knees increased 77%, or was flat versus 2019. While we are seeing sequential improvement in the recovery of procedural volumes in large joints, the path back to normalized market growth is taking a bit longer than most expected. Still, we continue to be encouraged by the team's execution and ongoing strong momentum for Persona and ROSA Knee. Our global hip business increased 39.9%, or down 2.8% versus 2019. In the U.S., hip grew 46.6%, or up 3.1% versus 2019. Strong demand and favorable feedback continues for the Avenir Complete Hip, with continued adoption for both Gold and Platinum accounts. The sports extremities and trauma category increased 53%, or up 10.8% versus 2019, driven by solid growth in sports medicine, CMFT, and upper extremities. We continue to see strong surgeon registrations of the Signature ONE surgical planning system for shoulder procedures. Our dental and spine category grew 69.4%, or up 0.8% versus 2019, fueled by recovery in dental. New products and better commercial execution drove growth in the quarter, with strong contributions from implants and digital solutions in our dental business. Finally, our other category grew 105.9%, or up 7.5% versus 2019. This reflects the ongoing demand for ROSA Robotics and strong capital purchases in the quarter. We saw improvements both sequentially and versus Q2 2020 in units sold, as well as increased revenues from software due to the launch of our partial knee application. Moving on to the P&L. For the quarter, we reported GAAP diluted earnings per share of $0.67. Our reported GAAP diluted earnings per share were up significantly when compared to a reported GAAP diluted loss per share of $1 in the second quarter of 2020. The increase in year-over-year GAAP earnings was driven by higher revenue, offset by normalized spending levels and IPRD investments within the quarter. In addition, the second quarter of 2020 had some one-time GAAP charges that did not repeat. On an adjusted basis, diluted earnings per share of $1.90 was significantly higher than the prior year, driven, as expected, by the recovery of elective procedures since the pandemic trough in the second quarter of 2020. Adjusted gross margin was 71.7% and in line with expectations. Our adjusted operating expenses of $923 million stepped up sequentially versus the first quarter due to higher variable selling expenses related to higher sales and increased discretionary spending to support investments in commercial infrastructure and innovation through R&D. Improved revenue performance and stable gross margins more than offset higher spending to drive 26.2% operating margins, a slight improvement over the first quarter of this year. The adjusted tax rate of 16.5% in the quarter was in line with our expectations. Turning to cash and liquidity. For the quarter, operating cash flows were $453.9 million, and free cash flow was robust at $358.7 million. We ended the second quarter with cash and cash equivalents of just over $1 billion. We continue to make good progress on deleveraging the balance sheet and expect to make another $300 million in debt repayments in the third quarter. Moving to our financial guidance. As noted in this morning's press release, we have updated our full year 2021 outlook. We are tightening our guidance range to better reflect our year-to-date performance and a more informed view of the potential impact of COVID. There are some key assumptions that underpin our 2021 financial guidance. We assume no worsening of elective procedure trends due to COVID and that procedure volume recovery continues in the second half of the year. Recovery may not be linear by region and/or by product category. We also expect to see seasonality impact the third and fourth quarter, as we have observed in prior years. With the narrowing of our guidance range, we are now expecting reported revenue growth to be 14.5%-16.5% versus 2020, with the impact of foreign currency unchanged at about 150 basis points of a tailwind for the full year. On a constant currency basis, compared to 2019, we expect Q3 to grow sequentially over Q2 and for that improvement to continue in the fourth quarter. Turning to the P&L. Our adjusted diluted earnings per share is now in the range of $7.65-$7.95, and we have narrowed our adjusted operating margin projection to be 26.5%-27% for the full year. Our updated EPS guidance reflects our performance to date, our expectation of improved growth in the second half, and that discretionary operating expenses remain consistent with Q2 through the balance of the year. While operating margins are expected to decline sequentially in the third quarter, in line with lower sales revenue and steady investment levels versus the second quarter, we expect overall second half operating margins to be stronger than first half operating margins. Our adjusted tax rate projection is unchanged at 16%-16.5% for the full year. Finally, our free cash flow estimates remain in a range of $900 million-$1.1 billion. We will continue to update you on market dynamics and financial expectations as we move through the remainder of the year. To summarize, our performance in Q2 was slightly better than our expectations that we have communicated to you through the second quarter. While we anticipate some ongoing COVID pressure, we have more confidence in the momentum of the recovery and our ability to execute against that backdrop. With that, I'll turn the call back over to Bryan. All right. Thanks, Suky. I'm going to now just hit three topics before we move to Q&A. First, I want to talk about execution and some of the product and pipeline highlights that we have under that category. Second, I'm going to talk about our progress against active portfolio management, which is a big effort for us, obviously. Then third is innovation. Inside of that innovation, how we believe we're going to be able to drive attractive long-term growth that ultimately will deliver value to you, our shareholders. Let's start with our team's execution. I've said this before, and I'll continue to say it, that the things that ZB was able to directly control over the past year and a half, the team, they've executed against, they've delivered against, I'm very proud of the team for doing that during a time of significant turbulence around them. In Q2, in the recent weeks, we've hit key milestones with our ZB products and our solutions. ROSA for partial knee was approved back in April, as we've talked about before. Our first patient surgery was actually performed early in the quarter, we've continued to see good traction with that technology so far and great feedback so far. It's important for us because partial knees, I think most of you know, is a market where ZB has a sizable market share position. We're very excited about the possibilities here, not just from a revenue standpoint, but also the potential impact for patients in the surgery area. If I just look at ROSA overall, we did see another strong quarter in Q2 of market demand and traction with ROSA total knee as well, with placement momentum broadly continuing across the world, not just in the U.S., but internationally as well. That's important. We want to see strength in the U.S., but we want to see that OUS, and we did get to see that kind of mix again in Q2. We also saw capital expenses for our customers being much stronger in Q2, and as a result of that, we saw a shift back to upfront sales of ROSA. More of those happened in Q2 than what we would typically see. Again, that just speaks to the strength of capital budgets and people's desire to acquire in that way. What is clear is that there's a real focus for hospitals to be bringing in robotic systems for their ORs, whether they buy them outright or they get them through other arrangements. Either way, that momentum, that demand is very real. ROSA continues to be a cornerstone, one of the key ones of our ZBEdge suite of connected solutions. Our forward-looking robotics pipeline is going to be robust as a result of that because that's a big part of our strategy. Again, a lot of enthusiasm on what that will mean in coming years in terms of expansion of indications and overall robotics penetration for ZB. Also in the quarter, we saw revision continue its very strong momentum. This is a great tip-of-the-spear product for us where we can go in and get competitive conversions and revision, but also use those competitive conversions for access to the typical total knee as well for that surgeon. Very exciting, not just on the revision side, but also opening the door to a much larger opportunity to get their typical knee conversion as well. We're also excited about adding another key variable to our ZBEdge portfolio of connected technologies, and that is our Persona IQ, which will be the first and only smart implant on the market. We certainly still have to get FDA approval on that. We're working diligently with them to help with any information they need to move that forward. We're certainly hoping to receive approval in the relatively short term. Ultimately, again, that timeline is up to the FDA. It's important for us because it takes the Persona implant, which is that known and trusted design in an implant, and it combines it with Canary Medical's tibial extension, which has the sensor technology in it. The combination of those two things will now inside the body, give us an opportunity to measure the range of motion of that patient, step count, walking speed, and other mobility metrics that we believe are going to be indicators of post-surgery progress. Again, helping us close the loop in those connected technologies that we have in ZBEdge. More to come when we hear back from the FDA. Once we do get that approval, we would look to limited launch the technology for a quarter or two, and then post that timeframe move into full launch. Okay, let's move to my second topic, that is on active portfolio management and our efforts around active portfolio management. We have the ZB portfolio management strategy in place. We have the right process in place, and we have definitely built our capabilities to move this forward over the last 1.5 - 2 years. We're excited about this phase of the organization, and we're focused, as we said before, on mission-centric M&A. That is WAMGR accretive. In other words, weighted average market growth accretive to the organization. You've seen us move this forward already with the selective tuck-in acquisitions that we did late last year that really illustrate our strategy at work. These are smaller deals, again, tuck-in size deals that were designed to fill portfolio gaps and better position us as an organization in high growth, high priority markets like sports medicine, ASC, and sternal closure, where we truly do believe we have a right to win in attractive markets with strong profitability. Of course, there's the planned spin-off transaction of our spine and dental businesses that is fully underway and on track. We continue to be encouraged by the energy and the momentum around NewCo as CEO Vafa Jamali builds out his team and refines his corporate strategy, and we believe creates two independent and even stronger companies that is going to maximize value for not just our customers, but also for you, our shareholders. All right, that brings me to the last topic that we have before we move to the Q&A, and that's going to be around innovation. Really inside of innovation, how we see our ability to drive attractive long-term growth that will ultimately deliver value to all of our stakeholders, including you, obviously, our shareholders. We are focused on evolving ZB from what I would define as a metal and plastic provider of implants into a leading med tech innovator. We have a lot of shots on goal across a number of programs to do this, including a number of robotics launches over the near term, smart implants that we have today, but also the technology roadmap that we have in smart implants, new functionality with mymobility, and really just the broader ZBEdge ecosystem of those connected technologies that are going to help us drive mix benefit and share of wallet benefit, but also competitive conversions. I've mentioned before, more than 70% of our new product development investment is directed towards ZBEdge and those connected technologies inside of ZBEdge. Our exclusive partnership with Apple continues to be productive and collaborative. We forged several other tech alliances that we know are going to drive future innovation that will benefit patients. I believe this fundamental shift is coming for ZB and for our core markets, with technology advancements potentially changing the care paradigm for patients in the future. That's really what our focus is. The momentum is real on the innovation front, and we think it will ultimately allow us to drive long-term growth that is very attractive to us and to you. Most importantly, it also gives ZB the chance to really change the lives of patients around the world. All right. Let me close by saying that I continue to be highly confident in the ZB team and our business momentum. While there continues to be uncertainty due to the global pandemic that we cannot control, I truly believe that we are ready and well-positioned for success, and our strategy is absolutely working. The transformation of our business is well underway, and I'm excited about the value we can drive for our shareholders on a go-forward basis. I also want to make sure that I take the time to thank the entire ZB team. Your dedication to safety is critical, and your focus on delivering on our mission is unmatched, and you do it daily. I remain incredibly proud of what we're accomplishing and what we're accomplishing together. With that, I'm going to turn it back to Keri for our Q&A session. Keri? Thanks, Bryan. Before we start the Q&A session, just a reminder to please limit yourself to a single question and one follow-up so that we can get through as many questions as possible during the call. With that, operator, may we have the first question, please? Thank you. Ladies and gentlemen, at this time, we will now begin the question and answer session. Our first question comes from Josh Jennings with Cowen. Good morning. Thanks for the update, and thanks for taking the questions. Bryan, I was hoping you could just share how internally your team has been tracking Zimmer Biomet's U.S. hip and knee market share, and any breakout of the progress in the de novo and revision segments would be helpful. As you think about your revenue growth acceleration journey post-spin, do you envision the introduction of enabling and sensor technologies driving that positive mix shift and expanding or accelerating U.S. knee and hip WAMGR up into the mid-single digits? How do you see the U.S. large joint markets growth evolving in the next coming years? Thanks for taking the questions. Yeah, no problem, Josh. Let me start maybe with the second part of your question, beyond sensors, just what we define as ZBEdge, which is these interconnected technologies that actually do pull data for the patient journey. We really do believe that those technologies, including robotics, sensors in the body, mymobility, OrthoIntel, so on and so forth, will absolutely bend the curve when it comes to growth rate in knees and hips and other areas as well, because we would proliferate those beyond just knees and hips. I do believe that that technology, which is being absorbed by folks in orthopedics right now, does provide us an opportunity to enhance our growth rate as an organization for two reasons. One, because I do believe that we can get that share of wallet benefit or mix benefit per procedure. Two, I really do believe it sets us up to take share from the competition because it's unique to us. Yes, on the second question, I see that as being able to enhance our growth rate. When I think about the share, I'm pretty focused on this, as you would imagine. This is something that in a turbulent market, we got to pay attention to it. When I think about the last five quarters that we've seen, we've just had abnormally large spreads between the top and the bottom player in large joints. This speaks to just a very turbulent market that we're experiencing because of COVID. Inside of this, I'm ultra focused on share gains or losses because it's the very thing that would tell us whether we're performing well versus our competition because the market itself is difficult to understand. I'm focused on this in regular times, but I'm ultra focused on it during turbulent times. That said, in a normal market, I try not to get too excited or depleted based on any individual quarter performance. There's just too many variables inside of an individual quarter, particularly now. What I do is to take a look at a rolling four quarters, and that's the way we do it every time we see results out. When I think about the rolling four quarters, particularly prior to Q2, we definitely took share in our large joints market. We didn't beat every competitor every quarter, but every quarter over the four quarters preceding Q2, we were ahead of market in both knees and hips. That obviously gives us confidence as we move forward. I really try to look at it with the data that's provided from the major companies that is public to all of us, and I just track that over a four-quarter rolling period to determine whether we are or not taking share. I do believe that even though it's been positive for us over those five quarters, I do believe the technology that we're launching is going to enhance that going forward. Our next question comes from Vijay Kumar with Evercore ISI. Hey, guys. Thanks for taking my question. Bryan, I'll roll both of my questions into one. Back to your prior comments here on share gains versus the market. I guess The Street is focused more on near-term sequential trends here. Why would Zimmer perhaps be seeing different trends versus your peers? I think you made some comments about the backlog burn being a little bit slower, et cetera. Maybe put that in perspective for us. My second question is, your ROSA, I think one of the key advantages of the system is ease of use, the higher throughput. Given there is a backlog, are you seeing increased traction here? Are customers appreciating this speed advantage of ROSA? What does that translate to in a total installed base or share gains perhaps for Zimmer? Maybe I'll start with the ROSA throughput. As you probably remember, we spent a lot of time thinking about the design characteristics of ROSA. One of the primary things we wanted to focus on is to make sure that we did not disrupt the surgical flow and certainly did not want to add time to the surgical procedure. That has benefited us, there's no question. To me, it wouldn't matter whether we're in a COVID environment or a non-COVID environment. That is something that our surgeons are pursuing, and they very much appreciate the fact that it's not disrupting their flow and it's not dramatically increasing any of the times to do procedures. That is a benefit for us for sure. Again, I don't think it really matters whether you're in a COVID environment or not. That's just a benefit. One of the things relative to share gains that you talked about and our view on backlog, I don't know that our outlook and what we've described is really any different than anyone else who plays in large joints like us with such a significant share position. It seems pretty consistent to me, anyway. If I think about the deferred patients, I just say that, like most people at this point, that just becomes more challenging now as time continues to be added to the equation. It's just unprecedented right now, what we're dealing with, just given how long this has gone on. There are just too many variables, in my view, to really size this appropriately. I think anyone would probably say this now. With that said, we still believe that there's been no structural shift in the disease state. That's what we've been saying all along. As a result of that, there's got to be a sizable deferred patient population out there. When we originally analyzed what we thought would happen with that deferred population, we looked at Q3 of last year. We assumed that when, based on what we saw in Q3, that when the vaccine was available, you would have a pretty significant return of deferred patients relatively quickly. Again, that's what we saw in parts of Q3 last year when the virus was subsiding. We just assumed that would happen this year. Fast-forward today, the vaccine is here and we've got more current data, more data points that are playing out right now, and this doesn't seem to be materializing for anybody. As such, our current thinking is that deferred patient demand will likely come at a more gradual pace and probably be more consistent over a longer-term period of time as a result. I think that's really what we're contemplating, by the way, when you think about the midpoint of the revenue range that we just provided, the implied range for the back half of the year. Actually, at the top of that range, as I think most people would say, we would need to see a change in the current pacing of that recovery. In other words, you'd have to see it reflect an increase in deferred patient demand that would also be matched by capacity increases to get to that top end of the range. Hopefully, that helps. No, that's helpful. Thanks, guys. Thanks, Vijay. Our next question comes from Anthony Petrone with Jefferies. Thanks. Hope everyone's doing well. Maybe just a quick follow-up on backlog. Is it safe to assume, Bryan, that it's still sort of at least a $700 million opportunity and t hat perhaps could certainly extend into 2022, but maybe even beyond a bit. It sounds like perhaps that's where you're headed. A few quick follow-ups on Persona IQ. It does sound to us from our checks that there is pent-up demand for the sensing capability. A few questions here. Do you need to be standardized on ZBEdge to take full advantage of the implantable recorder? Will Persona IQ actually drive additional surgeon reimbursement over time? Thanks again. Sure. All right. Maybe I'll start with the backlog, just because it's maybe a simpler answer. I don't want to try to size it because I think it's gone on too long, and as I said before, I just don't know how to look at this unprecedented situation and try to put a size to it. All I would say is that based on our assumption of no structural change in the disease state, it's got to be big. I'll leave it at that, but I don't want to try to size it. Yes, my current thinking, just based on the data points that are available to us, is that it's likely going to be a slower roll with that deferred patient group coming in, and that would indicate that this should take a while for us to work through it. That could change at any time, but that's the data points that we have right now. Relative to IQ, I'm glad that you're hearing there's pent-up demand, because certainly we're feeling that as well, and we're getting excited about the pending launch. Now we still obviously cannot market the technology because we don't have FDA approval, but we do believe that should be coming soon. Yeah, we're excited about it, but you do not actually need to have the full ZBEdge infrastructure to take advantage of it. What we would like to see people do is to have mymobility and the Persona IQ combined, because we believe the combination of the data collection between those two is extremely beneficial, but you don't really even need that. That would be the goal, for us to have that move in concert and be able to have the mymobility in concert with the IQ implant. We do feel that all the components are there for remote patient monitoring. That's the whole idea behind this, through mymobility, through IQ, is to be able to remote patient monitor and, as a result of that input provided, be able to make decisions on what you do or don't want to do with the patient. We believe that we have what would be required for a surgeon to get a reimbursement for RPM. That's the way we're looking at it today. At the end of the day, that's not our decision on whether it happens or not, but we do believe we have the components to make that available to surgeons. Thanks again. Sure. Our next question comes from Steven Lichtman with Oppenheimer. Thank you. Hi, guys. I'll ask my two upfront. Bryan, you talked about the momentum sequentially in ROSA. Obviously, we saw that in the reported numbers. As we think about the implant pull-through opportunities, can you give us a sense of what percentage of placements are going to accounts that are competitive accounts or ones where you have low share? Suky, just as a follow-up on gross margin in the first half, it ran ahead of the second half of 2020. Do you see upside to your original expectations for 2021 on gross margin, which I think was to be about in line with the second half of last year? Thanks. Great. Steven, I'll go ahead and start with the ROSA question, then Suky, I'll pass it off to you. I would just say that, yeah, again, we're excited about the traction we're seeing. The way I look at this, it's not just the traction that we're seeing with ROSA. I'm excited because there seems to be a significant openness in orthopedics for technology. That's really important, I think, for two major reasons. One, because I truly do believe the technology's going to change the care paradigm for patients. You're going to get better outcomes as a result of it. When you have that happen, I believe more patients will enter the funnel because they're going to have higher confidence in the procedure. Remember, there's still 20% of knee patients that are not happy with the outcome. If we can reduce that through technology, I believe you've got patients sitting on the side that would enter the funnel, which is good for everybody, patient included. I'm very happy to see momentum in ROSA, but I'm even happier to see technology adoption in orthopedics overall. When we think about our placements, it's interesting because we focus in two major areas. We spend most of our time in platinum accounts and gold accounts. Both of those would just be very large accounts. The difference between the two would be platinum, we have a higher share position, and in gold, we have a lower share position. Those are the two areas that we concentrate mostly with ZBEdge and ROSA. What's interesting about that, though, is even when we go into that platinum account, it's very rare that we would have a homogeneous knee usage in the account. Even when we get a platinum customer that is using us in knee to move into ROSA, we typically get competitive conversions to ROSA because you have competitive surgeons in those accounts. Of course, in gold accounts, you get the same thing. It's almost every placement that we have, very rarely otherwise, provides an opportunity for us to get a competitive conversion. Hopefully, that helps with the way we're thinking about ROSA. Yeah. Hi, Steven. It's Suky. Good morning. You're right. When we talked about gross margin for 2021, we talked about it being stable to back half of 2020, right? We said it may not be the same for each quarter because there are a lot of variables that impact gross margin. We said broadly that it would be in line or stable, and that comes off of many years of declining gross margin. It's a good first step in actually seeing that stability. First half, fortunately, was a little bit better than the back half of last year, we're encouraged by that. We expect the second half of this year to be pretty much in line with the second half of last year, very consistent with how we previously guided. When you average those two together, the first half of this year being a little stronger and the second half being in line, that would suggest that the full year should be slightly better than what we saw in the back half of last year. We're encouraged by what we're seeing there. I do want to just thank and recognize the supply chain team as well as the commercial team for a lot of great efforts on our cost down initiatives, looking more strategically at E&O and really looking for opportunities to become more efficient in our cost of goods just overall. Seeing some good progress so far. We're encouraged, and that's how we thought about and that's what's baked into our guidance moving forward. Great. Thank you, guys. Our next question comes from Larry Biegelsen with Wells Fargo. Good morning. Thanks for taking the question. Suky, I just want to make sure I'm understanding the second half revenue guidance and cadence. When I look back before 2020, the last five or six years, Q3 is typically down about 6%, and Q4 is typically up about 11% sequentially quarter- over- quarter. Based on your comments earlier, I thought I heard you say Q3 would be down maybe 3%, but Q4 would be up, call it 14%-15% to kind of get to your midpoint of your guidance. It's better than kind of we've historically seen. Can you comment on July trends and am I right to think that you expect a little bit better seasonality in the second half of 2021 versus what you've typically seen? Thanks for taking the question. Yeah, absolutely. My comments earlier in the call were really versus 2019, that's kind of where I'll play for this answer. We do expect to see seasonality. On an absolute basis, Q3 generally tends to be lower in absolute sales dollar than Q4, we expect that to play through for the second half of this year as well. We do expect versus 2019, where Q2 was about flat, as we mentioned earlier, for the third quarter to step up. As you suggested, that is a little bit better than what we've seen historically, but it really underpins the continued recovery, which ultimately underpins our guide for the back half of the year. Again, for that to step up again sequentially in Q4, again, all versus 2019. That's how we currently see it. Again, it's pretty much based on that continued recovery that we've already seen in Q2. What we've seen early on in Q3, we're not going to talk about individual or specific months as we move through the rest of this year. So far what we've seen in July underpins and supports what we've provided earlier today. Hey, Suky, let me just add some color to that. How you doing, Larry? When I think about what Suky just referenced, that we've got a pretty significant assumption in our guidance range that says COVID pressure doesn't get worse and the recovery builds through the second half. We didn't just assume that. There are some proof points that we're seeing, and that might speak to your question, Larry, maybe a little more. There's really kind of two things that we're seeing that would give us confidence in that assumption. The first one is that even with the recent virus surges that are all over the news, I mean, you can't look at the news any time during the day and not see something about the virus surge. It doesn't seem to be translating into the same significant revenue disruption that we've seen in the past, and certainly not helping us, but it's not translating into that same kind of revenue disruption we've seen in the past. I believe that's likely because you've got more vaccines out there, obviously, which is impacting the way people feel when they get sick. Also, I just think that hospitals seem to be managing this patient population better. The second kind of proof point for us when we thought about this as an assumption inside the guidance range is that the vaccine is available. I mean, let's face it's available globally, anywhere. Anybody who wants it can get it. I truly do believe, even though it's stalled a bit in certain parts of the world, I do believe as people get more educated on the Delta variant and the risk associated with that may be a good motivator for people to come in that have been waiting to actually get the vaccine. Those are kind of the proof points that we have that give us confidence that we should see that continued recovery in the back half. Thanks, Bryan. Sure. Our next question comes from Chris Pasquale with Guggenheim. Thanks. Two questions, just trying to understand some of the moving pieces in the quarter a little bit better. First, can you quantify at all the impact of the China inventory drawdowns? It did seem like Asia- Pacific was the source of the shortfall versus consensus in hips and knees this quarter. It'd be great to just understand magnitudes there a little bit better. Can you put any numbers around the ROSA contribution this quarter? The other revenue line was a big upside driver. Just be helpful to know how much of that came from increased system volume versus that shift in the preference between placements and upfront purchases for your customers. Yes. Maybe, Suky, why don't I take a shot at the ROSA piece, and then I'll pass it to you on VBP impact. On the ROSA side, I probably don't want to speak specifically to the dollar amount, but obviously it was a big enough shift for us to talk about it. That might help you kind of size it in your mind. What I would tell you is that the way I think about it is in a normal quarter, what we would typically see is better than 50% of our placements being done through a long-term contract, which is that we actually like that because it does link us to the customer, and it usually has a competitive pull-through commitment as a result of that arrangement. In this quarter, we just saw that flip, the higher than 50% move to upfront purchases, which is different than what we've seen in the past. What I don't know for sure is if that's going to continue. I mean, clearly there were budgets that were available to people. They flexed those budgets. That could continue. Hey, I'm happy either way we place a ROSA. We're going to be very flexible with our customers as we go forward and make sure that we're there to support them. Our preference, as I've said in the past, is those long-term contracts, but I'll take an upfront sale as well. Hopefully that helps on the ROSA side. Then, Suky, I'll pass it to you on the VBP impact. Yep, sure. Thanks, Bryan. Hi, Chris, good morning. Yeah, as we noted, Asia- Pacific sales were impacted in the quarter really by two things. One is the VBP impact that we talked about, which was essentially some distributors taking some inventory contraction ahead of VBP. The second was we did see some surges late in the second quarter in some of our larger markets like Japan and Australia, New Zealand, that also slowed some of our growth down, and that hit pretty much across both of those VBPs as well as slowdowns in our recon business. It was encouraging that despite those headwinds, that we were able to manage through that and actually grow the region a little bit ahead of expectation. We would expect that growth to continue in the back half of this year. Regarding China VBP, for competitive reasons, we're not going to size that. It was a contributor, but not the only contributor in that performance in Asia- Pacific, as I mentioned. I think the important thing is how do we think about this going forward? We've looked at VBP and done a number of scenarios based on what we know at this time. Again, the final rules, pricing, and volumes aren't expected to be issued for, let's call it another few months, but that timing has been shifting around, so it could continue to shift. Based on what we know today, we don't expect there to be a material impact from inventory change going forward, and that's what's represented in our guidance moving forward. Again, we're going to learn a lot more about VBP over the coming months, and we'll update you as we learn more. Again, it was great to see that Asia- Pacific did grow through that. I would say also, fundamentally within China, we're seeing very strong demand. Obviously that was the first market to be impacted by COVID-19, and it was the first market to recover, and we continue to see good strength and progression in that market. As you know, we're a leader within China and expect to maintain that leadership position as we move forward. We'll take our next question from Matt Miksic with Credit Suisse. Hey, good morning. Thanks for taking the questions. I have one on SET and just to follow up on ROSA, if I could. On SET, Bryan or Suky, if you could provide some color on sort of the components within that business that was driving some of the strength, at least outside to our estimates. Was it trauma? Was it extremities? Was it sports is a little smaller, but was that where you saw some of the strength? As I mentioned, I have one follow-up on ROSA. Yeah, that's one of the highlights that I saw in the quarter. Clearly we are heavily penetrated when we think about our overall revenue in large joints, and as I think everybody has been saying and recognizing, large joints have just been a little slower to recover than some of the other categories that we have. What I've been very happy to see is our strength in SET, and we believe that that's going to continue through the back half of the year. Pretty much across the board, we showed good performance. Standouts for us were sports. The upper extremities business for sure was solid. Trauma was solid for us. Of course, when we look at our CMFT business, our thoracic business was quite strong as well. We're excited to see that the tuck-in acquisition that we did in CMFT is playing out the way we expected. Then some of the acquisitions that we did that were really just product launches, filling out gaps that we had in sports and also in the ASC, they're also providing benefits right now, and that was the whole idea, right? To fill out that product portfolio, as a result of that, have a right to fight and win, and that's playing out right now. We're feeling good about the strength in SET. Probably have more confidence now in that being able to continue on a go-forward basis, just given what we have in the portfolio. Very happy to see that strength in SET, and we would expect that to continue. That's helpful. Thank you, Bryan. Just to follow up on ROSA. I don't think many of the other folks putting robots into the field are seeing the kind of shift back to capital that you're seeing. It seems like it's been pretty stable, and I'm wondering maybe if you could talk a little bit about the mix of accounts, maybe the mix of ASCs or the larger centers, and if there's any change in the mix that might be driving some of that preference for cash payment versus commitment to long-term contracts. Thanks. Yeah, sure. Really no dramatic shift. I mean, even if I think about U.S., OUS, for instance, what we typically do, it's not always exactly this way, but if I look at the number of quarters and just kind of aggregate them, we typically do kind of a 70-30 split U.S., OUS, and that was pretty consistent in this quarter. For us, again, we did see that shift. We believe that it's mainly because people have more budget right now on the capital side. I don't see a shift in our customer base that drove it. Nothing that just stands out for me. It's just more that there was capital available. People like to flex the capital when they have it, and some customers just don't want the long-term contractual obligation, bringing a piece of capital in. They'd just rather buy it. I think that's really the culprit. There's nothing beyond that that I've seen. I will certainly pay attention to it as we go forward, but nothing that was disruptive in any way relative to mix that would have changed that change in placements. Thanks for the color. Sure. Our next question comes from Rick Wise with Stifel. Good morning to you both. Bryan, maybe just to start with M&A, you obviously highlighted that M&A remains a top priority. I heard you about the WAMGR accretive, and you listed some areas. How do we think about the next 6, 12, 18 months? Do you feel like you have a lot of targets? Do you feel like you have a lot of opportunities? Do you feel like you're moving faster? The points you mentioned about robots and smart implants, et cetera. Do we envision that it's more about acquiring enabling technologies or incremental technologies that enable you to achieve that? No, you're ready for something larger, freestanding to accelerate? I'll ask a second question. Okay. Maybe just quickly here, I'm going to pass it to Suky because at the end of the day, the M&A strategy is only as good as the funding for it. Obviously we're both focused on moving this forward. Let me maybe pass it to Suky. He can give you the same color I would on what we're looking for from an M&A standpoint, but also give some color on how we're feeling about our firepower there. Suky. Yeah, absolutely. We continue to build out, I think, an attractive pipeline of potential tuck-in targets. Very consistent to what Bryan said earlier about things that are mission-centric, where we have a right to win, strategically makes sense, financially are strong, and have a low level of synergy disruption. Very consistent with sort of the deals we did at the back end of 2020, which so far through the integration process, we're very pleased with how those are progressing. We're going to continue to look at opportunities very similar to those. The good thing is our firepower continues to build. With the recovery of the pandemic, we're seeing our EBITDA improve significantly. We've turned the corner on the second quarter of 2020, which was a cliff for us, as you know. A trough, if you will, on EBITDA. With a rolling 12-month EBITDA number as we sunset the second quarter of 2020, we're seeing a pretty big step-up in our EBITDA number and a nice improvement in our overall leverage ratio. When you combine that with the debt pay down we've done so far, the debt pay down we're committing to in the back half of this year, and the over $1 billion on the balance sheet, we feel we're in a stronger position than we have been for the last 15 months to execute on that tuck-in M&A strategy. So feel really good about where we are and how we're moving forward on that. I would also say another big component of that is our spin transaction. We're really pleased with how the team's been progressing on that. We've made significant progress with our tax private letter ruling. Great progress with our carve-out financials in our 10-S, which we hope to file in the not-too-distant future with the SEC on a private basis. Good progress from Vafa in formulating this go-forward strategy and building out his team. Just overall, really impressed with how the team has handled this in the backdrop of also integrating those transactions we did at the back end of last year. That muscle, that capability that we've been building over the last couple of years is really playing out to our benefit right now. Got you. Thank you, Suky. Go ahead, Bryan. Go ahead. Yeah, I was just going to say, you are right. I mean, the two areas where we're spending a lot of time right now when we look at targets and are pulling that bolt-in of targets would be around enabling technology. A great example of that is what we did with Canary and that relationship that's been created, and that's going to then obviously spin out IQ for knee, but also sensors in other areas of the body as well. Then we'd be looking at near adjacencies, very much like what you've seen recently from us in sports, the ASC, thoracic. Areas that we feel confident we have a right to win, that they're accretive to our overall weighted average market growth, and they're profitable. Those are the things that we're looking at today. As Suky said, as the firepower opens up, then we'll begin to flex that firepower in those areas. Just as a follow-up, I was reflecting, Bryan, on your comment specifically about revision, where you said revision capability now opening the door to competitive conversions. I was reflecting just that maybe you could flesh out your comments here. I get it that revision specifically will help, but so will Persona IQ, so will the continuing rollout of ROSA, et cetera. My question is, as we reflect on the next 6, 12, 18 months, what should we imagine? What are you thinking about as the biggest driver of competitive conversions and share gain? Is it these incremental products? Is it the totality of everything? Is it something about execution? Just trying to understand where you'd have us focus in thinking about that kind of concept. Thank you so much. Don't know if you can hear me okay. Yeah. What I would tell you is that's kind of the beauty of the situation and why my confidence is high that we're going to continue to see share gains as we have over the last four quarters, five. That's because we just have so many shots on goal. If you think about knee in particular, we already have ROSA out, and that's getting great traction. ROSA Partial was just launched. Persona Revision has been out for a while, but the momentum is still very strong, and there is that spin-off opportunity to get the typical total knee. You still have mymobility driving conversions. You haven't even launched Persona IQ yet. All of these give us an opportunity to create a differentiated environment for our customer and provide the opportunity for not only that share gain or mix gain, but also competitive conversions. Specifically on revision, the reason why I bring it up is typically in somebody's practice, you get about 10% of the overall revenue associated with revision, and it's more like 90% comes from your typical total knee. Many times we use that revision as a tip of the spear to convert a surgeon that is a competitive surgeon because they love the revision system, and that gets us in the house then, to try to pursue that much larger portion of the business, which is your standard knee. That's why I keep going back to that. We have significant dollars now that we're paying attention to where we have a revision customer that is using a competitive total knee system. That gives us a great opportunity and kind of a hunting ground to go to get those conversions. It's certainly not the one area that would give us the opportunity to take share. It's pretty much all of these. Thank you so much. Sure. Lauren, we probably have time for maybe one more question. Up next, we have Matthew O'Brien with Piper Sandler. Morning. Thanks for squeezing me in here. Bryan, just a little bit more on the knee side of things. When I look at your numbers, I know what you're saying about over the last several quarters, you're trending in the right direction. When I look at the last two, it seems like things have flattened out a little bit. If not, you're actually down a little bit on the knee side in terms of share. I'm just wondering, especially in the U.S., that's actually down versus 2019 here in Q2. Are there things that are impacting you specifically because you are the biggest player on the market? Are there some higher volume accounts that are on vacation? Are you in bigger COVID hotspots, more training on the partial knee side that has slowed things down a little bit for you guys versus what we've seen from some of your peers? It's so hard to say. That's why I was referencing before, when I look at share gain or loss, I never look at and spend too much time on a specific quarter, even when things are typical. In these crazy times, so many things can impact your performance versus the market. Again, I try not to get too worked up about any given quarter. It could be. I mean, the fact is, share right now in a specific part of the country, for instance, can be meaningful, to whether you do better or worse than the competition, because that particular state or county could be challenged by COVID more than others. There's always those things that could impact a specific quarter. That's why when I look at over a four-quarter period of time, that usually eliminates those hotspots, and that's why I feel more confident, more comfortable with more of that trend, which through that trend basically eliminates the noise, if I just put air quotes around the noise of a specific quarter. That's why I still feel confident that we're in good shape, that we have all these shots on goal, that we should continue to take share. Hey, I'm disappointed. I look at the quarter, I don't really care what the reason is. I want to win every single quarter, and this one we didn't. Again, I'll look more at the trend and take more from that on the prediction of share taking in the future. I would just say in a nutshell, I believe that we're going to be net share takers. That's helpful. Just really quickly on ROSA placements, I think you mentioned more, a better trend line on the OUS side. Can you just talk a little bit about what you're seeing internationally as far as ROSA placements go? Then here in the U.S., there's been some talk about some moving into ASCs and just in terms of ROSA placements, what are you seeing in terms of where these things are going, higher volume accounts that you're getting into, inpatient or even in the ASC or even on the ASC side of things? Thanks. Yeah, that's a nice thing. I feel really good about our distribution. We're taking advantage of momentum in the ASC. The ASC absolutely loves the fact that we're an efficient robotic system, that they're all about efficiency in the ASC. There's been a benefit for us there for sure. We've seen it in the hospital as well. We've seen it around the globe, in Europe, Middle East, and Africa, as well as Asia- Pacific. I'm just very pleased with the distribution of the technology across pretty much all sites of care and around the globe. Again, we focus our attention, not always, but let's call it 80%+ of the time in those larger accounts. We're spending our time in those gold and platinum accounts because that's where the big payback is if you're going to spend the time. Again, the distribution has been good. I mean, it's been across settings, across region, and we've been focused on the larger accounts for sure. Thank you. Sure. Thanks, Matt, for the question. I think that brings us to 9:30. Bryan, I'll turn it back over to you just for any closing remarks before we wrap up. Yeah. Thanks, Keri. I wouldn't mind making a couple of comments here. First of all, thanks for spending time with us here this morning. I just want to say, and I think this is probably obvious to everybody, we certainly have an outsized dependence on elective procedures versus really any of our med tech peers or competitors, particularly large cap companies. We're just an outsized impact there. As a result, we're very sensitive to COVID ebbs and flows. We spend a lot of time, as you would imagine, analyzing this. We try to remain prudent in our expectation setting as a result. Because we've seen it, we've seen it firsthand that COVID can move our business pretty rapidly given that dependence on elective procedures. This has been what was reflected in the updated guidance and why our implied range for the back half is still pretty wide. Again, there are things that can happen here to move us up or down pretty rapidly because of that dependence on elective procedures. Relative to Q2 specifically, and Suky said this before, even with some of the unexpected challenges that we had in the quarter, hey, we delivered better than expected results, which I think speaks to two very important things. Number one, and this is more short term, but it's important, the recovery from COVID is moving in the right direction. It's definitely not happening the way we anticipated, and I don't think it is for anybody, but it's moving in the right direction nonetheless. The two, and I think this is important not just for now, but the long term, our team continues to execute and deliver against the things we can control. Both of these things were deeply considered in our updated guidance. This gives us confidence that continued recovery through the back half of the year is going to happen. We see a path to end 2020 at 4%-5% organic growth, that 4%-5% we've been talking about, without the need for any material benefit from clearing the deferred patient queue. I got to say, given where we started just a few years ago, with COVID in between, with very flat to negative growth, with consistent share losses as a company, I, for one, am super proud of the team for putting ZB in this position. I look forward to not just talking about it, but delivering it for you, our customers, and our patients. With that, we'll go ahead and end the call, and we'll look forward to talking to you again soon. Thanks so much. Thank you again for participating in today's conference call. You may now disconnect.