Good morning, ladies and gentlemen, and welcome to the Zimmer Biomet Third Quarter 2023 Earnings Conference Call. If anyone needs assistance at any time during the conference, please, please press star followed by the zero. As a reminder, this conference is being recorded today, November 7th. 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, Chief Communications and Administration Officer. Please go ahead. Thank you, operator, and good morning, everyone. Welcome to Zimmer Biomet's Third Quarter 2023 Earnings Conference Call. Joining me today are Ivan Tornos, our 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 Q3 earnings release, which can be found on our website, ZimmerBiomet.com. With that, I'll turn the call over to Ivan. Ivan? Thank you very much, Keri, and good morning, and greetings, everyone from Warsaw, Indiana, the orthopedic capital of the world. Welcome to our Q3 earnings call, my first call as the CEO of this amazing organization. Really grateful that all of you are joining us here this morning. I'd like to begin by sharing how truly excited I am to be in the new role, and what I think to be a very inspiring time, not just in musculoskeletal health, which it is, but also in med tech in general. Simply put, the space is not what it used to be just so five years ago. When you look at orthopedics, when you look at the entire category, it's changed. It's changed a lot. Groundbreaking technologies are shaping how procedures are done. Beyond the backlog and continuing favorable demographics, global demand for treatment is higher than it has historically been. This is driven by better clinically reported outcomes. This is driven by shorter episodes of care. This is driven by better, more comfortable ways to do physical therapy. This is driven by greater ways to approach different disease states, and this is driven by sort of treatment migrations, like the one we're seeing here in the U.S, with a rapid shift of cases moving to an ASC, while also preserving what are very compelling volume levels in the traditional inpatient and outpatient settings. So in plain English, healthy market, great patient dynamics, new technology, disruptive innovation. A lot has changed, and I don't see us going back to four or five years ago. So again, a very inspiring time to be in musculoskeletal health and orthopedics in general. All of these market accelerating trends are opening new doors for countless patients to benefit from what we do here at Zimmer Biomet, which is to drive life-changing solutions, and we do that every single day for countless patients. The best part about it, we're just getting started, so I could not be more excited to be here in my new role. With these encouraging market dynamics, sustainable trends, and building on the solid track record of execution that the Zimmer Biomet team has enabled, it's great to be here today to report what it is, another solid quarter of a strong performance, while strongly reaffirming our year-end guidance for the year 2023. Even more exciting, as I look forward to our future, I'm more convinced than ever that Zimmer Biomet will continue to lead the way on customer-centric innovation, already a competitive advantage and solid commercial execution, enabling not just the delivery of our mission, but also improving on our other key value creation drivers, thus regaining and sustaining top quartile performance. And again, this is something that we treat with a lot of rigor and something that is a mandate for the organization. We must regain and sustain top quartile performance. For today's call, I want to first share my thoughts on my first two months as CEO of Zimmer Biomet, while also providing key insights into what I've learned and how my learning has shaped what are going to be my three key priorities as the new CEO of the enterprise. This would answer the question on what is fundamentally going to change around here in the next chapter of our transformation. After that, I'm going to talk about the key drivers behind the solid Q3 performance. Next, Suky will take over. We'll discuss the financials for the quarter, as well as the expectations for the rest of the year, and then our favorite part of the call, Q&A. Before we move into these updates, I do want to take a moment to thank the global Zimmer Biomet team for their unwavering commitment to our purpose, to our plans. I want to thank them for their sense of urgency in driving sound execution. I want to thank them for everything that they do. This is a highly engaged and focused team that has been operating at a very rapid speed and is eagerly desiring to do even more. More for patients, more for customers, more for the team, more for each other, more for the company, more for the communities where we work and live, like right here in Warsaw, and frankly, far more for our shareholders. It's a team that has gone through a lot, and a lot is a lot. This team has done a lot of heavy lifting, and now with the heavy lifting behind, from a remediation standpoint, it's great to be in a different stage, and it's great to to be able to show to the world what the Zimmer Biomet team can do and will do. I'm beyond proud of the organization, and I'm genuinely inspired by what they do each and every day. Been doing this for a while around the world, and I can truthfully tell you, I've never worked with a better team than the one we have here at Zimmer Biomet. Again, I can hardly wait to showcase our results in quarters to come, so thank you. I also want to thank Bryan Hanson for all that Bryan did to bring Zimmer Biomet to this moment. We are grateful, and we're stronger because of his leadership, so thank you, Bryan. Now let me share some perspective as the new CEO of Zimmer Biomet. During my first 11 weeks or 77 days in the job, I've spent significant time with team members, customers, analysts, investors, our board, my peers, healthcare executives across med tech, government officials, and other key stakeholders in healthcare, so that I could listen, I could learn, and I could get the proper insights. I've been in every Zimmer Biomet region around the globe. I've interacted with every key manufacturing facility. I have visited hundreds of decision-makers across every major continent, and I have collected countless pages of feedback and recommendations. Most critically, I've used this reflection time to ensure that we, at Zimmer Biomet, are boldly prioritizing what needs to get done. And this, I can assure you, will be a trademark of my time as CEO of Zimmer Biomet, having the courage to say no to several things so that we can become truly great in those things that will drive the most value for the enterprise and our key stakeholders. These key priorities are: purpose and people, number one. We have a winning culture. We have the absolute best talent in the industry. It has been a foundational priority for CB, and will continue to be critical under my leadership. People, purpose, talent, culture. We're a very data-centric organization, and we use the same level of data centricity to track how it is that we're doing with our human capital. To that end, we track level of engagement, development, DEI, engagement across different segments and geographies, high-potential ratings, and everything in between. I'm really excited to report that our, in most recent engagement survey, which we completed about six weeks ago, delivered the absolute best scores in the history of the company. Let me say that again. The latest engagement score for organization, close to 20,000 employees, showcased the absolute best scores in the history of the organization, frankly, going up across every single category. This tells me that the team is energized, this tells me that the team is ready, and this tells me that the team is about to unleash a lot of greatness for the organization. The second priority is to create and sustain a framework of operational excellence across the board. Simply put, it's about being great when it comes to running the business. This means simplifying what we do, where we play, and how we play. This means being courageous and bold about the choices that we make. It starts with being intentional about driving sustainable revenue growth. We know this is the number one driver of top-quartile performance, and we also know that innovation, customer-centric innovation, and commercial execution are the two key drivers of sustainable revenue growth, so we will accelerate that. But at the same time, we're not gonna forget that we can and will do better across the entirety of the P&L. We're going to drive a culture of ownership by every single employee across the globe, with all of us waking up every single day, acting as true investors in the business and thinking of time and money as the key currencies of the organization. This means continuing to align our incentives with an even greater emphasis on best-in-class performance from both top and bottom. By delivering on operational excellence as a mandate or mindset for the organization, we're gonna enable, number one, revenue growth of at least 100-200 basis points above market, while growing earnings faster than revenue, and free cash flow growing faster than the rate of earnings. Number two, operational excellence will enable best-in-class supply and operational outcomes by simplifying our rather complex operations and manufacturing footprint. And then thirdly, operational excellence as a mandate is gonna enable an agile, nimble, and simplified company that can anticipate, can be proactive in successfully navigating market trends. So again, operational excellence as a mindset is gonna deliver revenue growth of at least 100-200 basis points above market, while growing earnings faster than revenue and free cash flow faster than the rate of earnings, while enabling best-in-class supply and operational outcomes, and by making Zimmer Biomet agile, nimble, and a very simplified company that is proactive in what it does. Based on where we are as we close the year 2023, and based on our latest guidance, we're already on track to deliver the metrics that I mentioned above around revenue, earnings, and Free Cash Flow, the way we run the company, but, we expect to do it again with even greater rigor in 2024. To that end, we look forward to hosting an analyst day, something we've not done ever since we merged the two companies, and at that analyst day, we're gonna be sharing more details on these goals that I have highlighted and the specific, drivers of these goals, so that this becomes truly the DNA of Zimmer Biomet. Third priority is about innovating and diversifying Zimmer Biomet into higher growth markets. Table stakes, we must enter higher growth markets. We do need to diversify our portfolio, and we will do that. We're gonna do it through organic and inorganic means. We're gonna do it through innovation and M&A. On the innovation front, we're gonna innovate by continuing to boldly invest in the right segments of R&D, so that is new product development, so that we always think customer problems and bringing solutions to those problems. We're gonna make sure that those problems are in attractive growth areas, that are mission-centric, but also are in the right markets. By bringing those solutions, we're gonna become and remain market leaders in these categories where we choose to play, aided by both product and solutions launches that will enable category leadership for Zimmer Biomet. We're gonna be relentless about the surgical opportunities, namely the ASC opportunity here in the U.S., where we are already growing in the strong, double-digit rates, but we know we're far from realizing our true potential. This journey, by the way, innovation journey, has already started. We're on track to launch over 40 new products over the next 36 months, and the value, the dollar value of our pipeline today, is twice the dollar value that we had back in 2018. So a lot of new exciting technologies are about to get launched here at Zimmer Biomet. In addition, 80% of our products in our pipeline, we study markets that are growing at least 4%, many in areas that are growing more than 4%. Equally vital, we're gonna ensure that our innovation journey accelerates value creation through making sure that we're monitoring not just the revenue associated with these launches, the Vitality Index, but also what we call our Innovation Profitability Index or IPI, and that's the gross margin dollars coming from new products. We gotta make sure that these new products are driving margin accretion to the overall margin profile of the organization. So again, it's about innovation, and it's about value creation at the same time. Mission and margin expansion will coexist and will coexist as part of our innovation journey. To materially change our portfolio, we're gonna also leverage the strength of our balance sheet, which is stronger than ever. We will do M&A. We're gonna be thoughtful and disciplined about the spaces we prioritize, and we're gonna ensure that the spaces are mission-centric, and at the same time, these spaces are the areas where Zimmer Biomet has a right to win. We focus on opportunities that are gonna hit strategic thresholds, but also hit financial thresholds. We're gonna make sure that these acquisitions drive strong returns and create long-term shareholder value. It is worth noting that this diversification of our business has started already. Yes, we have to be bolder, and we will be bolder, but it has already started. In the last 2-3 years, we have shifted our portfolio already into mid-single digit or above, market environments, and our weighted average market growth rates have already increased around 50 basis points. This happens through thoughtful resource allocation and some of the active portfolio management we've done. Again, we're gonna be bolder, but the journey has already started. I'm excited about what we can and will do across these three priorities. It's about, first and foremost, people, human capital, having a best-in-class culture. Secondly, it's about delivering operational excellence as a company mindset or mandate. And thirdly, it's about making sure that we diversify and innovate in a far bolder way through organic and inorganic means. Those are my three priorities. So now that you got a better sense of our priorities, I wanna talk about Q3, and, and again, I wanna reiterate that, that we're really excited about the performance that was on the quarter. Performance that, that was driven by continued execution, especially in the key areas where we've been investing. In particular, I wanna talk about knees. It was a great quarter for knees, where we delivered a bold market performance in key markets around the world. We also grew in areas that are mission-critical within SET, upper extremity, CMFT, as well as sports medicine. We had solid performance in the ASC environment, and we saw revenue generation coming strongly from our data technology and solutions platform, primarily within ROSA and mobility. In knee, Persona OsseoTi, our highly differentiated cementless platform, continues to perform above our expectations. I was recently in Dallas at the Hip and Knee Society, and the feedback continues to be superb. I can't wait until we continue to bring this technology to our other geographies. ROSA had a strong quarter, continued to see great adoption. We've seen a lot of ROSA adoption happening in the ASC setting, where speed, we're dealing with higher volumes does matter. In the ASC, we continue to see growth in the teams, and we're executing contracts daily. Our portfolio is second to none, and we're benefiting from the recent acquisitions we've done, such as Embody and Relign. Against the backdrop of this strong execution, med tech sector stocks have been facing pressure related to GLP-1 drugs and their impact or the perceived impact on obesity, at least from a long-term perspective. We're a mission-centric, patient-devoted organization, so if this drug class truly does accelerate and improves patient health, and if these drugs truly do become the end of the obesity pandemic around the world, that is great news for everyone, as long as truly this is sustainable in the long term. What I can tell you, that we spend a lot of time researching GLP-1 drugs, engaging third parties, engaging third partners and key opinion leaders across every major market, and these GLP-1 drugs today become a tailwind for us. Let's talk about framing the root causes of osteoarthritis, a disease which impacts 528 million people around the world, according to the World Health Organization. The top osteoarthritis factors are, ranking order, age, genetics, and joint injury. Obesity is certainly an accelerator of the disease and, and certainly, is a, an element of the disease, or a driver of the disease, but let's not forget that once the cartilage is damaged, there is no recovery. Once you get osteoarthritis, you will not get rid of osteoarthritis, and dropping weight is not gonna cure osteoarthritis. Again, this is a degenerative and non-curable disease that we're talking about. If anything, obesity is a blocker today to joint surgery, as many surgeons are uncomfortable operating on patients with a BMI greater than 40 in some countries or even above the 30 thresholds in some locations. So why could GLP-1s then be a tailwind for orthopedics? Three compelling reasons. First, if you can lower the patient's BMI below a certain threshold, 40 or 30 in some cases, these patients now become eligible for surgery. All the data points that we're getting in primary markets like the U.S. is that there is a large percentage of patients who today are not going through surgery because their BMI is too high. Secondly, if a patient does lose the weight, and I would say this is pretty logical, and they do become more active, there would be a greater risk for additional joint procedures because there will be injury. And third, if a patient loses weight, they are likely to live longer, again, expanding the patient funnel for an orthopedic procedure. A good example of this fact is Japan, the second-largest market in the world for osteoarthritis, with minimal obesity rates, but very, very long life expectancy dynamics. We've not seen any near-term impact from GLP-1, and we've seen the long-term impact would be a positive one for orthopedics and Zimmer Biomet. We've engaged independent third parties to perform surgeon surveys and have gathered U.S.-based claims data. While it still is early in the process, we are very excited about the initial findings, and we look forward to sharing them. So in a nutshell, more of a tailwind. We'll be sharing data very soon, and we've seen that the logic will prevail, and this will be the end of what has been, so far, a rather emotional argument that has not been fact-based. In closing, I hope you can tell that I'm very confident about the future of this organization. I'm very excited to be here. Our end markets have never been stronger, and we believe that this market, beyond the backlog, is sustainable. Our execution is strong and is also sustainable. We've been delivering consistently for a while, and we'll continue to do so with even greater focus and speed. We know what we need to do, the strategy is clear, and we will execute on the strategy. We have financial flexibility to invest in higher growth markets, and we are going to continue to shift our portfolio mix and diversify our business. I generally believe this is the time for Zimmer Biomet. I'm proud of the work we've done and even more proud of the work that we're going to be doing ahead. This is why I'm excited to be the CEO and even more excited to be a proud Zimmer Biomet shareholder, as I believe that now is the time for real value creation. With that, I'll turn the call over to Suky for a run-through of our Q3 financials. Suky? Thanks, and good morning. I'd like to start my prepared remarks today by welcoming Ivan to his first earnings call as the Zimmer Biomet CEO. Ivan has been a constant force and a driver within the organization for several years, and I'm proud to work with him, and I'm excited by the partnership. As Ivan noted, we had another strong quarter, driven by healthy and improving end markets and continued strong execution across the organization. Overall, we remain on track to deliver mid-single digit, constant currency, revenue growth and adjusted operating margin expansion in the back half of the year, just as we committed to on our second quarter call. Moving to results, unless otherwise noted, my statements will be about the third quarter and how it compares to the same period in 2022, and my commentary will be on a constant currency and adjusted operating basis. Net sales were $1.754 billion, an increase of 5% on a reported basis and an increase of 4.7%, excluding the impact of foreign currency. Additionally, we had a selling day headwind of about 150 basis points that impacted all regions and product categories at about the same level. Excluding the selling day impact, consolidated ex-FX sales would have grown just over 6%. U.S. growth was 6%, and international growth was 2.9%. In the U.S., our strong year-over-year results were driven by recon and a step-up in our SET category in tandem with strong capital sales. Outside of the U.S., we saw more moderated growth across Europe and Asia, driven by tough comps and geopolitical headwinds, which I'll discuss in our product category section. Global knees grew 7.3%, with the U.S. growing 6.1% and international growing 9.1%. The strong performance in knees was driven by continued uptake from our Persona product portfolio, combined with the benefits of our ROSA Robotics platform. Global hips declined by 60 basis points, with the U.S. growing 3% and international declining by 4.2%. Tough comps in China and headwinds in Russia disproportionately impacted our OUS hip business. Excluding these impacts, our international hip business grew in the low single digits. Looking ahead, portfolio expansion will continue to support growth in our hips business. Next, the SET category grew 2.8%. Again, as a reminder, there was about 150 basis point selling day headwind across all categories and regions. Our key focus areas within SET, including sports, upper extremities, and CMFT, continued to post double-digit growth, which was partially offset by other subsegments within the category. We remain confident that SET will grow in the mid-single digits in the fourth quarter. Finally, our other category grew 16.4%, driven by ROSA sales. Now moving on to the P&L. In Q3, we reported GAAP diluted earnings per share of $0.77, compared to GAAP diluted earnings per share of $0.92 in the prior year. While we had higher year-over-year revenue and higher pre-tax operating profits, post-tax income was lower due to a favorable tax settlement in 2022 that did not repeat this year. On an adjusted basis, we reported diluted earnings per share of $1.65, compared to adjusted diluted earnings per share of $1.58 in the prior year. The step-up is primarily driven by revenue growth in the quarter, partially offset by higher operating expenses and higher interest costs. Our adjusted gross margin was 70.9%, up 20 basis points from the prior year, primarily driven by favorable mix. Adjusted operating margin was 26.4% and up slightly versus the prior year. Better gross margin and savings from efficiencies across SG&A were partially offset by higher R&D expenses that will support upcoming product launches, ultimately driving a continued increase in our Vitality Index. Net interest and other adjusted non-operating expenses of $48 million was higher than the prior year due to certain foreign currency exposures, as well as higher interest rates. Our adjusted tax rate was 16.7% in the quarter. Turning to cash and liquidity, we had operating cash flows of $338 million and free cash flow of $189 million in the quarter. We ended with cash and cash equivalents totaling just under $300 million. Our balance sheet remains strong, providing us financial flexibility and strategic optionality as we move forward. Now, regarding our outlook. Overall, for 2023, the outlook remains largely unchanged from the prior quarter, implying over 7% constant currency revenue growth and 9% EPS growth at the midpoints of our range. We expect reported growth for the full year to be 6%-6.5% and are maintaining our FX growth expectations for the year of 7%-7.5%. Inside of that, the US dollar has strengthened, so we are increasing our outlook for foreign currency to be about 100 basis point headwind to revenue growth for the full year. Additionally, we are reiterating our EPS guidance of $7.47-$7.57 for the full year, despite the strengthening dollar, which we project to be about a 4-cent headwind to fourth quarter earnings. This guidance implies that we will increase full year operating margins by about 100 basis points in the backdrop of a challenging environment. In addition to our formal guidance ranges, I will reiterate that there is no material impact from selling days on the full year revenue growth expectations. However, we do expect about 100 basis point tailwind in the fourth quarter. Additionally, our expectations for interest and other non-operating expenses, as well as tax rate and shares outstanding, remain unchanged. We expect free cash flow for the year to be between $950 million and $1 billion. In summary, we delivered another excellent quarter on both the top and bottom lines. We remain confident in our 2023 expectations and are excited about the next year, with revenue growing in the mid-single digits and earnings growing faster than the top line. With that, I'll turn the call back over to Keri. Thanks, Suky. Before we start the Q&A session, just a quick reminder to please limit yourself to a single question and one brief 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. We'll go first to Robbie Marcus with JP Morgan. Oh, great. Thanks for taking the questions. I'll ask both upfront as they're kind of interrelated. Ivan and Suky, I was hoping you could address just the health of the ortho market. You talked to it, but we see your results, and we see your peer results, and most of them were in line to slightly below in the quarter. So one, how you're thinking about the health of the market. And then second, you touched last quarter and then this quarter as well, on longer range guidance for 2024. You talked newer guidance this time about 100-200 basis points above your end market growth. I think last quarter it was implying something like 4%+. Is that a change, and how do we think about margins for next year? I think previously it was slightly up. Thanks a lot. Hey, thank you, Robbie. I'll start. I'll talk about the market dynamics and briefly, I'll comment on 2024. I'll pass it on to Suki to provide more color on 2024 and maybe discuss what he can discuss at this point when it comes to the margin profile. But I'll start with the market dynamics. We're the fourth company to report in Q3, so by now, everybody sees that the markets are healthy. And quite frankly, I won't talk much about Q4, but so far, so good. So this is not a one-quarter type of market dynamic. The reasons behind the market profile, the market growth profile, and why I continue to say this market is different than four or five years ago is the things that I alluded to in my prepared remarks. The explosion of ASCs, the movement, the shift to ASC is real. That means new ASCs are opening in the U.S. That means new days of surgery are happening. Demographics around the world play a factor. We continue to track data in terms of the age for someone to get a hip or a knee, and these are younger patients. In the U.S., we're also seeing more days of surgery, and I don't think this is just a backlog dynamic. Pricing, you see what every single one of us is reporting these days, it's not the same pricing dynamic that we had in the past. And beyond that, the technology. We are driving disruptive innovation. We got more efficient solutions, surgeries are shorter, and the episode of care is shorter, so we're dealing with, with the patients, the follow patients with, with more efficiency. Again, this is a durable trend. It's happening in Q3. As I think about Q4, nothing is really changing. As we look into 2024, every early indicator suggests that things are not going to change. Relative to performance, well, look, in the background of this healthy market dynamics in the U.S., we gained share, in Q3 in both categories. Really proud of being number one in knees for the quarter. We don't pay a lot of attention, to any given quarter, but, that is a fact that, we're the fastest-growing knee company in the quarter. Then globally, net of a couple of one-timers, both in Russia and China, when it goes to hips, our performance was in line with hips, and knees was very strong. Then as we get into 2024, I'll let Suky comment, but we will be mid-single digit. That's the point of entry. Nothing has really changed. It's just getting closer to the end of the year and realizing that these market trends are sustainable and the innovation pipeline that we have will drive the type of growth. But I'll pass it on to Suku to comment on all the drivers. Yeah. Hey, Robbie, good morning. Thanks for the question. First thing I'd say is, you know, starting with the back half of this year, we committed to mid-single-digit XFX growth for the second half of the year with operating margin expansion, both sequentially and year-over-year. Q3 was a really, another strong validation and proof point of that, and we feel confident in that profile. The reason I mention that is I think it gives us a running start as we go into 2024. And so, I, I do want to talk a little bit about 2024, back to your question. First, we've already provided a lot of color, I think, on 2024, more than most of our peers. But, you know, we, we feel that being transparent, giving you guys a robust view of, of what we're going to do, not only this year but into the future, is, is really important. But, but let me talk a little bit about the headwinds and tailwinds as we see it going into 2024, and some things have, have modestly changed. First, I'll, I'll start with the headwinds. One, we do see a higher tax rate into next year because of the OECD's Pillar Two. Secondly, based on where FX rates are today, we'd see some additional pressure from a foreign currency perspective into, into next year. Again, both of these are more macro versus execution, right? They're, they're things that are outside of our control, but we're going to contend with them, and we're going to deal with them. I'll tell you a little bit about how. On the, on the tailwind side, I, I would say, yeah, we are more confident in our outlook for revenue next year. Our end markets are stronger than they've ever been. Our portfolio and new product launches have been executing extremely well, in some areas above our expectation. Our performance relative to market has been very strong, and that's consistent and durable. And quite frankly, we're seeing a more moderated pricing environment. Still erosion, but, but much more moderated than what we've seen historically. All of those elements give us confidence that, that we're going to be able to post a mid-single-digit growth top line ex FX into 2024. And then despite those sort of P&L headwinds I talked about, we do believe that we're going to be able to grow earnings faster than revenue. I talked about gross margin next year stepping down because of the FX hedge gains from this year, not repeating at the same level. That will still happen, but we're going to be able to offset some of that. The operations and manufacturing teams have been working really hard at efficiency, and so we feel more optimistic about where our gross margin is going into next year. Secondly, as I said, we've already got a running start on a lot of SG&A efficiency programs in the back half of this year that are going to run into next year. So when you combine those two elements together, again, we feel really confident that we're going to be able to do that mid-single-digit top-line growth next year, as well as earnings growing faster than revenue. So thanks again, Robbie, for the question. Appreciate the color. Thanks a lot. Thank you. We'll go next to Drew Ranieri with Morgan Stanley. Ivan and Suky, thanks for taking the question, questions. Just maybe on 2024 also. You haven't talked about backlog much. Recent conferences, you kind of pointed out that you think it's going to carry through 2024. But just maybe help us a bit more on how you're factoring that into your mid-single-digit directional guide for next year. I know it's not, I know your growth is not all dependent on backlog, but just how do you think about that helping to support the orthopedic market growth? And maybe just talk to us about your ability to capture a disproportionate amount of share of that backlog. Thank you. Yeah, Drew, thank you very much. And first things first, you should be in your honeymoon, considering that you got married recently. So I'm disappointed you're here. Look, I'm going to keep this short and sweet. We don't see backlog as a major driver in our growth profile for the next year. So when Suky and I are talking about mid-single digit, we're not assuming any real meaningful backlog. So not a key driver. We believe, and we spend a lot of time going back and forth on backlog that is going to remain here throughout the end of 2024, at least. But we are not a backlog-dependent type of company, so we don't have—we don't focus on that. What we're tracking is innovation, the pipeline that we have. What we're tracking is the investments we made in the ASC, and we're tracking is commercial execution and, in the background, just sustainable pricing dynamics. So no backlog. Thank you. Okay, and just a second, as a follow-up, your commentary was very strong, that you're expecting mid-single-digit SET growth into next year. But just remind us about what's it going to take to really accelerate SET. And maybe just talk a bit more about the lift on the organic side and maybe what you're thinking about in terms of M&A to get that growth rate higher and more sustainable. Thanks for taking the questions. Yes, absolutely. Great question. First things first, Q3 SET was in line. As we move into Q4, we're actually going to be a mid-single-digit grower. I'm not going to talk about SET dynamics for the 2024. We'll do that coming guidance, but very excited in terms of where we are. We integrated a couple of companies within Sportsmed. Those are performing very well. Our upper extremities, so solar business is growing in the mid- to upper-single-digits in most regions. When you look at our CMFT, cranial maxillofacial thoracic, which is part of SET, it has been performing very well. It continues to perform very well. So again, lots of reasons to believe that as we get in 2024, you should expect a sustainable performance in SET. In terms of M&A, again, we're going more on that later, but it remains the number one recipient of capital allocation. We haven't changed in that regard. And yet, SET is one category that is very attractive, given higher market growth dynamics or position in the space. So you should assume that this is one area where we're going to be focusing from an M&A standpoint. But again, native M&A already delivering mid-single digit growth, entering Q4 strongly, and we're excited about 2024. Thank you. Thanks, Drew. Katie, can we go to the next question in queue, please? We'll go next to Matt Taylor with Jefferies. Hey, thanks for taking the question, and congrats on a good quarter. I was curious about your outlook comments for 2024, and I was hoping you could specifically address, you know, concern I think investors have about growth, especially in the first half of the year with, I'll do air quotes on this, "but tough comps", especially in Q1. So maybe you could address how you think you can grow throughout the year and address investor concerns about those tough comps in the first half? Yeah, I'll, I'll start, Matt, and, and again, Suky maybe, wanna chime in here. But, we're confident about 2024 because the market dynamics are sustainable. So there's been a lot of back and forth in terms of what's gonna happen once the backlog is out and all that. First, the backlog, we don't think is gonna be out anytime soon, and then pricing is sustainable. And, all the things that I mentioned, excuse me, my answer to, Robbie are here. The moves today see the shorter episodes of care, more days of surgery. So macro-wise, every data point we're getting, Matt, is, is very compelling. And then on the micro, we are seeing a bolus of innovation being launched. We got 40 new products that we're gonna be launching over the next, 36 months. Some of these products are very compelling. We launched our Persona OsseoTi, which is the cementless construct, earlier in 2023. That is gonna be a full, truly full market release in the U.S. in 2024, with the right amount of sets, and that's high growth. As we enter the first semester of 2024, to your point, there's another two or three very meaningful product launches, some in robotics, some within recon, some in set. That's very compelling. The integration of Embody, the integration of Reliant continues to generate revenue. I could spend an hour, but I will tell you that it's the balance of really sustainable microdynamics and solid innovation. And then on top of that, you got great commercial execution with a highly engaged sales force. So I'm not - we're not deeply concerned about the comps. Yeah, I think just building on that, remember, the first half of this year, which was very strong, was more about comps versus 2021, or excuse me, versus 2022 than it was something about abnormal market growth. So again, just building off what Ivan said, we feel confident in that. Now, we're not, of course, giving specific guidance, and we're certainly not giving quarterly guidance into next year. So as always, quarters can be choppy or driven by seasonality, mix changes, but overall, we're confident in that position. Maybe one last comment here, Matt, quickly, and we can move on. Don't forget that the first semester of 2023, while it had very solid comps, also had pretty challenging dynamics from a supply standpoint. So as we think about 2024, that we believe is gonna be a tailwind. Great. Thanks, guys. We'll leave it there. Thank you. Thank you. Thanks, Matt. We'll go next to Shagun Singh with RBC Capital Markets. Thank you so much. I'm just gonna try to ask the Q4 implied in 2024 guide in a different way. You know, your Q4 implied guidance assumes a deceleration from Q3, and, you know, your commentary seems pretty positive. It implies a deceleration even on an FX basis, which adjusts for comps. So, you know, should we just assume that it's conservatism? And then, you know, if you look at growth on an underlying basis, adjusted for China, VBP, selling days and all one-time items, you know, I think you did +6% in 2022. You're looking to do 7%-7.5% in 2023. Guidance, sorry, consensus is looking for about 4.5% growth in 2024. You know, I know, Ivan, one of your targets is to drive that revenue growth acceleration. You've indicated that you will not be satisfied with 4%-5% growth for the company. So, you know, just what is your reaction to that 4.5%? Does it look conservative to you in the context of the comments that you made? Sure. Hey, Shagun, this is Suky. Thanks for the question. So just first, on the fourth quarter, I, I'll just keep going back to, you know, we don't give quarterly guidance, and obviously, with our implied, you can pretty much squeeze into the last quarter of the year. We talked about mid-single-digit growth, margins expanding in the back half of this year, and, and we're gonna, we're gonna deliver on that. We have a range around our guidance, obviously. To the downside, you know, geopolitical factors continue to be erosive or supply doesn't continue to... That very positive trend it's been on, then you- you're towards the bottom end. However, if that supply picks up and it remediates even faster than it's already been improving, then as well as better execution on our new products, we could be at the upper end. So there's a range around that, and so I'll just leave it at that. But overall, we feel really good about where we're ending the second half of this year and where our end markets are. As we look into next year, you know, I think you've seen a bit of a pivot, where our commentary was before anchoring towards 4, maybe even better, to now, where we're saying mid-single digit. And I think that reflects the momentum that we've seen, to your point, in 2022 and 2023. Got it. If I could just ask a question on M&A? Yeah, go ahead. Thank you. Go ahead, Shagun. Oh, okay, great. Just on M&A, Ivan, if you could just elaborate a little bit more in your thinking of, you know, tuck-ins versus larger deals, you know, high-growth adjacencies that may allow you to diversify outside of elective procedures. And then I'm most interested about ASCs. You know, a lot of your business is moving to ASC. That is a growth driver. What do you need to further succeed there? Do you need a broader bag or more depth? Thank you for taking the questions. Yeah, absolutely. So on M&A, as already mentioned, and it was in my prepared remarks as well, it will remain our top strategic priority from a capital allocation standpoint. So that's not changing, and we're excited about the opportunities that we have in front of us. We're gonna continue to focus on growth markets or areas that are not only mission-centric, but offer an exciting growth profile. And that is three things: no ranking order, three key areas. Segments within Recon that are growing faster than the collective market growth rates, and there's a lot in there. You got navigation, you got data, technology, elements of Recon that are really attractive. Two is set, as we've done already, buying things in sports med, buying things in CMFT, and then looking at other categories that I don't, I don't want to get into for our competitive dynamics, but again, you know, optionality there. And then ASC is also one attractive area. It's one area where we have dedicated resources. We're growing in the teams. We have currently 10%-15% or so of our sales in that space, and there is opportunities there to acquire, to acquire things. So that's a bit of the strategic summary of where we are, where we're going from an M&A perspective. In terms of financials, we're not changing the story. We like to do things up to $2 billion in acquisition price. And again, that gives you a lot of options. You can do a mid-size deal, you can do some tuck-ins, combination of different things. We want these deals to be EPS neutral within two years. And we spoke about high single-digit ROIC within five years. So that's a bit of the strategic and financial profile. As we look into the next 3- 5 years, we spend a lot of time, Suky and I have spent a lot of time looking at the strat plan, what is the growth profile? The great news is that we're convinced that the free cash flow generation is solid, so we're going to be able to do M&A and potentially do other stuff when it comes to capital allocation. So that's the answer to your first question. On ASC, look, I don't think we need to do much more. We're growing in the strong teams already here in the U.S. in the ASC. I mentioned 10%-15% of our sales are there. We got the right portfolio. This is not where we were, let's say, 3-4 years ago. We got the right robotic platform for the ASC. We got a great cementless knee that is gaining share very quickly. We got a full bag in sports and across it. We got best-in-class technology, so the portfolio is great. We got dedicated resources, which you very much need in an ASC environment. We have a dedicated sales force. We got simple contracting, simplified contracting. And look, what we don't have organically, we partner with others. So whether it's sterilization, booms and lights, or other stuff, we got the right partnerships. So very, very confident that we're going to continue to perform in the ASC environment. Thank you. Thanks so much, Shagun. Katie, can we go to the next question in the queue? We'll go next to Josh Jennings with TD Cowen. Good morning. Thanks, Ivan, Suky, and Keri. Wanted to just follow up on your ASC comments. I then wanted to ask about the migration of total joint surgeries to ASCs. Any back-of-the-envelope assumptions you would have us use just in terms of where the penetration or where the migration has, for knees and hips, has been? What percentage of cases for each category is reported in ASCs, you know, currently here at the end of 2023 versus 2022? And then any metrics you can share just with ROSA penetration in ASCs, and then any pricing dynamics for total joints as this migration is occurring? Thanks, multipart question, but I appreciate you taking it. All right, let's see if my memory is as good as I think it is. So starting with ASC, macro-wise, we believe that roughly between 40%-60% of cases in the next 5 years are going to move to the ASC. And I will say that a large portion of cases are already moving to the ASC. What we like about this dynamic is that as cases are moving to the ASC, other cases are going to inpatient, outpatients. So it's a little bit of a double dip happening there, Josh. But yeah, the number is 40%-60% over the next 3-5 years, and I would say a good percentage has already moved. We are growing in the upper teens when it comes to the ASC, and today, around 10%-15%, repeating myself, of cases, or revenue rather, of Zimmer Biomet, comes from the ASC. I will tell you that it's pretty equal in terms of both hips and knees, so we don't see one category being above the other. And I like the fact that given the recent CMS changes, you're going to see shoulder cases also accelerating in the ASC. We believe that's a great opportunity for us here at Zimmer Biomet. So, that's the answer on ASC. In terms of ROSA dynamics, I think we've been very transparent in terms of roughly one-third of all of our installations are happening in ASC. That's a trend that has been happening for a few quarters, and that's a trend that we continue to see happen in the next quarters. In an ASC environment, speed matters. Not having to get engaged in complex pre-planning matters. Efficiency does matter, and having a need that you are confident is going to be the right need does matter, and those dynamics are driving ROSA penetration in the ASC. And then outside of the ASC, ROSA continues to perform. We are selling and placing ROSAs, frankly, at a rapid pace. You see in the other category, we saw a nice increase that's driven by ROSA. And we are on track to at least install 300 units at the end of the year 2023 when it comes to ROSA. So really satisfied, and that's before we launch next generation ROSA across Recon and deliver the first shoulder robotic platform. So excited about both ASC and ROSA. Thank you for the question, Josh. Thanks, Josh. Katie, can we go to the next question in the queue? We'll go next to Larry Biegelsen with Wells Fargo. Good morning. Thanks for taking the question. And Ivan, I have enjoyed watching your posts on LinkedIn. You've-- it looks like you've traveled around the world, literally, since you've taken over as CEO. I wanted to ask, Suki, start on the margins. You're gonna end 2023 with an operating margin of about 28.5%, which is towards the high end of med tech. W-where-- what do you see as peak margins for Zimmer? I mean, five, 10 years ago, the margins were in the low 30s. Is that still realistic? And I have one follow-up. Yeah, sure. So good morning, Larry. Thanks for noticing. You know, it's actually two years in a row where we've expanded margins in the backdrop of a really challenging environment. By the way, while also accelerating revenue. I think in 2022, we expanded margins, operating margins by about 40-50 basis points, and this year, you're right, the implied is about 100 basis points. So again, really proud of what the ZB team has done collectively, again, in the backdrop of still investing for growth, which we've been able to demonstrate. You know, as we move into next year, I think I've been pretty front-footed in our ability to continue to grow margins in 2024. Quite frankly, we're gonna, we're gonna do that in every year after 2024, and continue to deliver a profile where earnings are growing faster than revenue. I'm not gonna go out and, and put a, a marker out there as to where we think it can get to. But, you know, historical levels, we'll look for over time to, to, to definitely meet and exceed those. So I'll just leave it there. Again, really happy with where the team's performed over the last couple of years. Very confident in what we're gonna do next year. Quite excited about our outlook in the longer term. That's helpful. And then just one follow-up- You had a follow-up, Larry? Yeah, the other category was obviously very strong. We heard you talk about ROSA sales in the quarter. What was the change in the quarter that drove that strength? And how sustainable is that? Thanks for taking the questions. Yeah, I don't think there is anything changing really. There's not a change of strategy. We continue with ROSA, we continue to show strong clinical efficacy. We continue to demonstrate time neutrality after a few cases. We continue to see great adoption in an ASC environment. We have three ROSA indications today within Recon, so total knee, partial, and hip. We've done a lot of body impressions. If you attended the Dallas meeting this last weekend, there was a lot of noise around posters and whatnot. So I think we're just getting the right adoption. It's moving quickly. And then a driver, I will tell you, has been cementless. A lot of these cases that are done in the ASC do like, or do want a lot of surgeons in an ASC want a combination of robotics and cementless. In the past, we didn't have the right cementless construct. We do now with Persona OsseoTi. So I think that's, that's been a bit of a tailwind, but I wouldn't say it's a major change of a strategy. It's just the fact that it's been 2, 3 years in market now, and you're starting to see the data. So really excited in terms of where we are. All right. Thank you. And hey, Larry, just to get back, Larry, just to get back to your original question, just to make sure I'm completely clear. I do see, you know, getting back to historic margins or better over time, absolutely a definable objective for us. You know, now having greater insight and taking over for ops and supply chain, I would say this is an area where we can certainly do better. We're gonna do better going forward. And I can tell you that the company's focus on, not just revenue growth, but operating profit and free cash flow generation, has been more acute and stronger than it's ever been. So I think we've got the pathway, we've got the culture, we've got the levers to get there over time. Thank you. Larry, yes, thank you for being my one follower on LinkedIn. The whole time I thought it was my wife. I'm disappointed. I appreciate it. Thanks, Larry. Katie, can we go to the next question in the queue? Thank you. We'll go next to Chris Pasquale with Nephron. Thanks. I just wanted to follow up real quickly on Larry's ROSA question. Was the mix of sales versus placements different in 3Q than what we saw in the first half of the year? Just trying to figure out whether that played a role, or the acceleration in other sales was really driven by system buying. Yeah. Thank you, Chris, for the follow-up. We did see more sales. We haven't changed the strategy, so it's reflective of the fact that there is capital in the hospital systems across the world. And we saw people wanting to buy them, and we sold the units. It's not a fundamental change. It's not a change in the strategy. We've said all along that we prefer placing, given the annuity factor and whatnot. But yeah, capital is strong, and we did do some deals in some ASCs and in some other systems, and that's why you see the other category growing. Thank you, Chris. Thanks. That, that's helpful. And then on SET, is the strategy there to lean into these focus categories that are, are already growing pretty well and then hope that the overall performance improves as they become a bigger part of the mix? Or, or do you see an opportunity to reinvigorate areas like lower extremities that maybe aren't on that list today? Yeah, let me start with the second part. We really don't do hope here. So we do have plans to drive better performance in the three areas that so far have not been that compelling, those being restorative therapies, foot and ankle, and trauma. What I will tell you is that the restorative therapies, biologics, the issue there was a reimbursement change a year ago. That's been resolved, so that's not a concern moving forward. And then foot and ankle, lower extremities, is something that we're looking at. It may require, it might, may require some organic and inorganic plays, but given the space, we're paying close attention to what it is that we need to do. And then trauma, for many markets, continues to be very attractive. We've done some smaller tuck-ins, so I would expect that the declines that we have seen in the past are gonna disappear. So again, not really doing M&A there. We got plans to remediate and to get back to growth in those three categories. Now, that said, the three most compelling priorities within SET remain upper extremity, shoulder, sports medicine, and CMFT, and those three are performing very nicely. Great. Thank you. Thank you. Thanks, Chris. Katie, can we go to the next question in the queue? We'll go next to Travis Steed with Bank of America. Hey, thanks for taking the question. I guess a quick follow-up on M&A. Any way to frame how much margin or EPS dilution you're willing to take in years one and two? I realize you said neutral by year three, but curious kind of what the framework is on year one and two. And when you think about bid-ask spreads, you know, is a deal something you think you could get done this year, or is it probably more something for 2024? Hey, Travis, it's Suky. I'm not sure I completely got that second question. Can you repeat that? So... Yeah, in terms of, like, when you think about, like, bid-ask spreads and the progress on your conversations, is a deal happening in 2023 a possibility, or is it probably something that we need to wait till 2024 to see M&A? Yeah. So first of all, on your first question around earnings per share dilution, you know, that's really gonna depend on the type of asset that we acquire, the size of the transaction, what markets it's in, where it is in its journey and its life cycle. Is it, you know, a product that's just launched or something that's very mature in marketplace? So I'm not gonna sort of give a guidepost on year one or year two, 'cause I think that would be premature, 'cause it is gonna be very situation dependent. But what we will commit to is that we're gonna look for break even by at least 20-24 months, if not sooner than that. So that's the profile that we look for in our M&A. Now, relative to, you know, bid-ask and timing, of course, for a variety of reasons, mostly proprietary, we're not gonna get into the timing of any specific deal. As you know, those are often opportunistic, situation-based. So, here's what I would say, is that we've got a lot of strategic flexibility. The balance sheet's in the strongest position it's been since the merger of Zimmer Biomet. We feel really good about the optionality we have going forward, and we think we can deploy capital to continue to accelerate our growth profile and diversify the company, but I'm not gonna get into specific timing. I'm sure you can appreciate that. But thank you for the question. Yeah. Yeah, no, it's fair. Thank you. Thanks for the answer. And a couple of housekeeping questions. The OUS one-time stuff in hips this quarter, does that get better in Q4? And when you think about tax rate next year, I heard your comments, but curious if that'd be, you know, less than 100 basis points or more than 100 basis points on tax rate. And when you think about the interest line, you know, you've got, I think, $850 million of debt coming due, so is interest a headwind or a tailwind next year? All right, I'll briefly comment on Q4. I'll keep it simple. It does go away. So this is a one-timer, and in Q4 we get back to growth. In terms of the tax and interest, Suky, do you wanna comment on that? Yeah. So, on the interest expense line, you know, right now, we're not gonna give full guidance on that, so, you know, we'll unveil that. I think the one thing you wanna keep in the backdrop is, we do believe we can grow earnings. We will grow earnings faster than revenue. On the tax rate, right now, our best estimate is that it'll be about 150 basis point increase off of our full year 2023 tax rate. Thank you. Thanks a lot. Thanks, Travis. I think we have time for maybe one last question. Katie, is there one in the queue? We'll go next to Vijay Kumar with Evercore ISI. Hey, guys. Thanks for squeezing me in here. Maybe just one question from me. This OUS hips, I think you called out Russia headwinds. Is that done with in fiscal 2020? Should that continue into fiscal 2024? And I think, you know, you did speak about M&A. Can you comment on your hurdle rates, you've given current interest rate environment for deals? Yeah, sure. Hey, Vijay, it's good, good, good to hear from you. So on the OUS hip headwind, specifically due to Russia, if you go back to last quarter's call, second quarter, I talked about Russia being about a 50 basis point headwind in the back half of 2023. That estimate is still largely true, and most of that occurred in the third quarter. So we're gonna see a little bit of pressure in- is largely behind us. We don't see that as being a headwind at this time into 2024. And I'm sorry, Vijay, could you repeat your question around- Sorry, on deals. M&A, given current interest rate environment, can you talk about your, you know, hurdle rates for, you know, deals? Yeah. So look, you know, we, we would still look at debt financing over equity financing all day long, even though it's, you know, 2x of where it was a year ago. It's, it's still, you know, versus historical rates, still a pretty attractive source of capital. It has become marginally more difficult to make, make the deal economics work at, at these interest rates. So it just means that we've got to be that much more disciplined on our valuation and, in our purchase price. And so that's how we view things right now. Thanks, Vijay, and thanks, everyone, for the questions. Thank you. Yeah, absolutely. I think now we're probably nearing the end of the call. I'll turn it back over to Ivan, just for any closing remarks. Yeah. Thank you, Keri, and I'll keep it to two minutes or less here, so we can close on time. But a couple of things here. Number one, really, really pleased with the progress here at Zimmer Biomet. Really proud of the team and the work that they have done, they are doing, and most importantly, the work I know that we are gonna continue to do. Excited about the markets. Lots of questions on market dynamics. Every data point suggests that they're healthy markets, they're durable markets. No, we're not concerned about GLP-1s, and I'll say that with the utmost respect and humility, but every data point shows that this is not something we should be concerned about. The performance is strong, and it's gonna continue to get there. We saw a great Q3 performance in Recon, net of the hip issue OUS. It was solid. I like where we are with both hips and knees here in the U.S., in the largest market. I like the fact that we've seen SET being in line now. I like the profile as we enter Q4 and as we get into 2024. I believe this will be the year for SET, and I like the optionality that we got around M&A. So healthy market, solid portfolio, great opportunity to leverage the balance sheet. I do think it's a different place, a different environment. So really excited to be here. Look forward to leading this great team, and look forward to answering more questions in quarters to come. Thank you for your time today. Thanks, everyone, for joining us. The IR team will be in touch, of course, and if you have questions or comments, please feel free to reach out. Thank you. Thank you again for participating in today's conference call. You may now disconnect.