Good morning, ladies and gentlemen, and welcome to the Zimmer Biomet second quarter 2024 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 7, 2024. 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 Zach Weiner, Director of Investor Relations. Please go ahead. Thank you, operator, and good morning, everyone. Welcome to Zimmer Biomet's second quarter 2024 earnings conference call. Joining me on today's call are Ivan Tornos, our President and CEO, and CFO and EVP, Finance, Operations, and Supply Chain, Sukhi Upadhyay. Before we get started, I would 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 filing 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, some of which are forward-looking non-GAAP financial measures. Reconciliation of these measures to the most directly comparable GAAP financial measures, and an explanation of our basis for calculating these measures is included within our second quarter earnings release, which can be found on our website, zimmerbiomet.com. With that, I'll turn the call over to Ivan. Ivan? Thank you, Zach, and thank you everyone for joining today's call. Good morning. I would like to start the way that I, that I usually do, by taking a quick moment to show my sincere gratitude to the north of 18,000 Zimmer Biomet team members across the world, who each and every day go above and beyond in delivering on our mission: alleviating pain and improving the quality of life for people around the world. That's what you and I get to do each and every day, and you're doing an unreal job in bringing this mission into action. Thank you for your commitment to Zimmer Biomet, thank you for your tireless work, and thank you for the very strong performance so far in this year, 2024. We are now past the midpoint in the year, and we're growing 5% after having delivered strong performances in 2023, 2022, and 2021. So the trend is real, the performance is there, and I'm deeply proud of the work that you're doing daily. As I've said countless times, the Zimmer Biomet workforce and our culture here is truly one of our key competitive advantages. In today's call, I'm gonna give some opening remarks, and then Sukhi will cover financials, and then, as always, we will leave ample time to answer your questions. The agenda for today: first, I'll cover some perspective on the quarter, secondly, I'll discuss the drivers of our performance and why we are even more confident than ever in our updated full-year guidance for 2024, and why, already looking into 2025 and beyond, we're also very confident that we'll continue to deliver on the long-range plan commitments that we outlined at the end of May at our first-ever Zimmer Biomet Investor Day. Recall, those commitments were driving revenue growth, at least at mid-single-digit growth rates, driving EPS at 1.5 revenue growth, and driving free cash flow growth at least 100 basis points above our EPS commitments. The third thing in the agenda, we'll close with our strategic priorities, those being people and culture, operational excellence, and innovation and diversification. Starting with our Q2 results, we continue to be very encouraged by our global performance. In the second quarter of this year, 2024, we grew 5.6% on a constant currency basis, and with that, we have now closed the first half of 2024, growing 5%. Worth noting that this 5% is versus very tough comps in the first half of 2023. The second quarter of 2024 now marks the tenth consecutive quarter in which Zimmer Biomet has grown mid-single digit or above. So again, a trend in the making that is real, and we're very confident that this performance will continue, if not, will accelerate as we continue to move our business forward. Against that backdrop, in the quarter, we did see some weakness early in the first half, of the quarter in the US. It's worth noting that May and June here in the U.S. were better than April, and in July, the U.S. Recon business actually delivered mid-single-digit growth. So choppiness through the first half of the quarter, and then an improvement through the second half, which has continued with very strong performance through the month of July. Our OUS, international business, outside of the U.S. business, has delivered above expectations. We saw a strong demand in the key markets across, both Recon and the SET categories. So overall, very diversified, solid performance coming out of these markets. I love the fact that, in Q2, in our second quarter, we continued to deliver excellent performance in our other category. This category is primarily focused on enabling technologies, primarily ROSA. We saw a strong demand for ROSA, growing double-digit in the business, and we also saw a strong demand in enabling technologies and navigation systems. As we have been saying for quite some time, we wanna be more than just a leading reconstructive knees and hips company in key geographies where we have a really high market share, as an example, the U.S. or key countries of Europe and Asia Pacific. One example of this diversification journey has been SET. We've been committing to growing SET at least mid-single-digit, and Q2 of 2024 is now the third quarter in a row in where we are growing mid-single-digit or above. A trend that we expect to continue towards the end of 2024, and moving into 2025 and 2026. So nice growth in other, nice growth in international, and nice growth in SET. One area that I'll tell you we've made significant strides is within our hips portfolio. We did lose some market share in hips in the U.S. and all U.S. markets over the last three to five years. As I said, over and over, this was due to lacking three key product items: Direct Anterior stems, what we call triple tapered stems, elegant navigation, and surgical impactors. As we see here today, we have remediated those gaps. We have 510(k) approval for Z1, our triple tapered stem. We are regaining market share already with HAMR, our surgical impactor, and today we have the most comprehensive navigation in hip arthroplasty. Not only do we have ROSA Hip, we also have the only 510(k) FDA-cleared augmented mixed reality hip navigation platform, via a partnership with our colleagues at HipInsight. And now, we have also signed and announced an agreement to acquire OrthoGrid, that is gonna give us a leading position in navigation using artificial intelligence devices. So we have the most comprehensive suite of solutions in navigation, in direct anterior stems, and in surgical impactors. Not to mention, having the best core implant technology with products like G7 and Avenir Complete. So the expectation is to grow again above market when it comes to hips, and regain some of the market share that we lost over the last three to five years. Moving from hips, we have developed, and we are today, the first and only robotic-assisted shoulder replacement platform in the world. The feedback on the cases we've done with ROSA Shoulder continues to be very compelling, and as we enter late Q3 and early Q4, we expect to see an acceleration of those cases. In 2025, we expect ROSA Shoulder to be a very meaningful growth driver for Zimmer Biomet. We recently announced the partnership with THINK Surgical. This is gonna provide our surgeon customers optionality across the robotic landscape. We have conducted extensive training, we've done voice of customer, and the feedback on this partnership, we think, remains superb. With this partnership, Zimmer Biomet is the only orthopedic company in the world that will offer both handheld CT scan-based system in the TMINI, exclusive for Zimmer Biomet platform, as well as a simplified CT scan-less robotic system in our current form factor of ROSA for total knee arthroplasty. We're excited about the optionality, and we're also excited about the fact that we continue to innovate at a very fast pace when it comes to ROSA, and we're expecting to launch at least three new ROSA modalities in the next three to eight quarters. From an earnings standpoint, we generated $2.01 of adjusted earnings per share in the quarter, or growth of 10%. This is in line with our long-range plan targets I've outlined at our Investor Day in May. Inside of the strong performance through the first half of the year, the team continues to execute on the three strategic priorities that I keep outlining in each and every earnings call, and at every Zimmer Biomet meeting around the world. The three priorities are people and culture, foundational to everything that we do, operational excellence, and innovation and diversification. As I said in my opening, people and culture continues to be a key competitive advantage for Zimmer Biomet. I'm proud to share that Zimmer Biomet was recently named one of America's best mid-sized companies to work for by Time Magazine. This reflects the strength in team member satisfaction and engagement, our revenue growth profile, and the turnaround of the organization now behind us. On the second imperative, operational excellence, we continue to expect to grow constant currency revenue, at least at mid-single digit level, with adjusted earnings per share, growing at least 1.5x revenue, and free cash flow growing at least 100 basis points faster than earnings. This is a commitment that we're making not just for 2024, but also for the long range plan, 2025, 2026, and beyond. This is a mindset that continues to proliferate throughout the organization. We pay people on delivering towards such commitments. We have trained people to deliver on those commitments, and the trend, as I've repeated a few times in my opening remarks, is in the making. In the past, when it comes to innovation and diversification, it's been very much portfolio-centric, moving from lower growth markets to higher growth markets. Point in case, the superb performance in SET. But today, we're also thinking diversification from a geographic mix standpoint. We wanna continue to invest in key markets outside of the U.S., where we see an opportunity to deliver sustainable revenue and profit growth. We're encouraged by the sound performance that we've seen in our OUS business, and we expect to continue to accelerate growth in these markets without compromising our margin performance.... In conclusion, we are very proud of how far we have come as an organization in terms of the financial progress, the innovation progress, and the commercial execution. Our second quarter results are another proof point that we make commitments and deliver on those commitments, and we fully expect that the trend is going to continue for the balance of the year and beyond. We're confident in our guidance for the year, and we love the fact that we're impacting the lives of millions of people, and I'm deeply inspired every day in knowing that my teammates and I are living the Zimmer Biomet mission of alleviating pain and improving the quality of life for people around the world. With that, I'll turn the call over to Sukhi. Thank you. Thank you, and good morning, everyone. As Ivan mentioned, Q2 closed a solid first half of the year for Zimmer Biomet, with ex-FX revenue growth of 5% in the first half and operating margins well ahead of the prior year. Our results through the quarter provide increased confidence in our 2024 full-year guidance, which includes 5%-6% constant currency revenue growth and $8-$8.15 in adjusted earnings per share. I'll provide more color on guidance shortly. Moving to the second quarter results. Unless otherwise noted, my statements will be about the second quarter of 2024 and how it compares to the same period in 2023, and my commentary will be on a constant currency and adjusted operating basis. Net sales were $1.942 billion, an increase 3.9% on a reported basis, and an increase of 5.6%, excluding the impact of foreign currency. As a reminder, we had a day rate tailwind that impacted all businesses and regions at about the same level. Pricing at a consolidated level was 80 basis points, driven by gains in international that were partially offset by modest declines in the U.S. Our U.S. business 3.5%, and international grew 8.5%. Growth in the U.S. was driven by our SET and other categories. As a reminder, our other category includes our surgical business as well as enabling technologies such as ROSA capital sales. Our international business continues to perform well, driven by knee and SET, with continued strength in emerging markets. Global knees grew 5.5% in the quarter, with U.S. growing 0.8% and international growing 11.5%. U.S. growth was impacted by softer sales in the first part of the quarter, with improvement in utilization and growth as we move through the second half. We continue to see strong uptake of Persona OsseoTi and remain optimistic that the recent robust ROSA installs will continue to drive pull-through and share of wallet opportunities. International continues to benefit from ROSA Robotics as well as our Persona family of implants. Global hips grew 2.8% in the quarter, with the U.S. growing 1.8% and international growing 3.7%. While our hip business has lagged the broader market due to key portfolio gaps, we have made significant progress with new product introductions and are excited to get back on the offensive in early 2025 when these products and technologies are fully in market. Next, the SET category grew 7.3%, led by our key focus areas of CMFT, upper extremities, and sports, growing on average high single digits. All other categories grew mid-single digits on average, giving us confidence in our ability to drive mid-single digit growth or better from SET through the second half of the year. Finally, our other category grew 11.3% in the quarter and continues to be driven by strong demand for ROSA systems and other enabling technologies. Turning to our PNL. We reported GAAP diluted earnings per share of $1.18, compared to GAAP diluted earnings per share of $1 in the prior year. Higher revenue, combined with lower R&D, effective tax rate, and share count, more than offset expenses associated with our restructuring program. On an adjusted basis, we delivered diluted earnings per share of $2.01, compared to $1.82 in the prior year, representing over 10% growth. The step-up was primarily driven by revenue growth, improved operating margins due to savings pull-through from our restructuring program, and a lower share count, partially offset by a higher tax rate. Adjusted gross margin was 71.6%, about 40 basis points lower than the prior year, driven by higher manufacturing costs, partially offset by better pricing and lower royalties. Adjusted operating margin was 28.5%, up 100 basis points from the prior year. The increase in operating margin was driven by higher revenue and lower OpEx as a percentage of sales as a result of our restructuring program. Net interest and other adjusted non-operating expenses were $45 million in the quarter, and our adjusted tax rate was 18.2%. Turning to cash and liquidity. We generated operating cash flows of $369 million, free cash flow of $251 million, and we ended the quarter with $420 million of cash in cash equivalents. Aligned with our capital allocation strategies, we repurchased $95 million of shares in the second quarter. Regarding our outlook for the rest of the year, we are reiterating our full-year constant currency revenue growth guidance of 5%-6%, but given further strengthening of the US dollar, we are updating our reported revenue growth to 4%-5% and now expect 100 basis points of currency headwind for the full-year, which should impact Q3 more than Q4. We still expect to generate between $8 and $8.15 in adjusted earnings per share, despite this greater FX pressure, and $1.05 billion-$1.1 billion in free cash flow. ... Our tax and interest and non-operating expenses expectations remain unchanged. When thinking about the cadence through the second half of the year, due to normal seasonality, Q3 typically is the lowest revenue quarter from a dollar perspective, with Q4 being the highest. From a margin standpoint, we still expect gross margin to step down sequentially as the year progresses, while operating margins should expand by more than 50 basis points year-over-year. As usual, we expect operating margin to be higher in Q4 than Q3, driven by higher revenue. In summary, Q2 closed a positive first half of the year, giving us continued confidence in our ability to meet our full-year outlook and another positive proof point through our LRP. With that, I'll turn the call back over to Zach. Thanks, Sukhi. Before we start the Q&A session, just a quick reminder to please limit yourselves to a single question and one brief follow-up, so 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 David Roman with Goldman Sachs. Thank you, and good morning, everybody. I wanted just to start with the U.S. knee business and appreciate the comments around the month-to-month fluctuations in growth, but maybe you could just take a step back and help us think through the impact of the conversion to cementless and cementless robotic. How is that tracking, and how should we think about the way that shows up in reported numbers? Thank you, David. Good morning. Maybe, maybe quickly here, 20 seconds, big picture, and then I'll talk about the US. So, big picture. It was a good quarter. We here at Zimmer Biomet delivered 5.6% ex-FX. As I noted in my prepared remarks, this is the 10th quarter in a row growing mid-single digit or above, and we're pleased with the double-digit growth in adjusted EPS. SET performed above expectations, third quarter, mid-single digit or above. I'm pleased to report that for the first time in a while, every single business within SET, and there are six of them, actually grew, which is something we didn't see before. Enabling Technologies, which is robotics, primarily, grew double-digit in Q2. It grew double-digit in Q1. The US grew... Robotics grew 16% in the quarter, so strong in that regard. And as we announced this morning, we did close the gaps in hips that we had, which frankly, is one of the reasons why we lost market share. Just throwing this summary to highlight the fact that unlike five years ago, we're not just a U.S. knee-centric type of company. That said, relative to knees and the U.S. performance, look, David, not pleased with the quarter. It was softer than expected. What I will tell you is that there are three main reasons on why we did not do better in the U.S., and these are solvable reasons. The first one is we had a large amount of high-volume surgeons at Zimmer Biomet that were out of the territory for a variety of reasons. We hosted large medical education events, and we did have a large group of surgeons that were not performing surgeries in the quarter. The second piece is that we had some challenges from a supply standpoint when it came to one of our knee platforms, what we call limb salvage, which is part of knee revision cases. These are high ASP cases. And candidly, you know, this didn't help the quarter. And then the third reason why knees in the US was softer than expected is comps. We deliver knee growth of 10%, almost 10%, 9, 9.8, to be exact, in Q2 of 2023. Hips was close to mid-single digit, and the US grew 5%. So comps didn't help. So in the background of those surgeons being out, supply constraints, the comps didn't help out. What I will tell you is that these three elements have gotten resolved as we move out of the quarter. And sitting here, July behind us, the US recon performance is very strong. On the second part of your question, David, Cementless continues to track very nicely. Candidly, I hope we can get more sets out. The adoption rate is very high. We are converting accounts, and we hope to have Cementless not just in the US, but outside the US very soon. So that's the summary of what's happening here in the US. That's... Thank you for all the detail. It's super helpful. Maybe, Sukhi, just a quick follow-up for you on the PNL. Can you help us think about the kind of interplay here between the benefits you're seeing from the restructuring, and I think you had talked about planning to reinvest some of the savings. Where are you in sort of the progress with respect to the restructuring benefit, and then at the same, on the same token, kind of that level of reinvestment that you had contemplated when you introduced the restructuring back in February? Yeah. First of all, good morning, David. Thanks for the question. Just, just to remind everyone, we talked about or announced our restructuring program at the early part of this year. We talked about $200 million of run rate savings as we exit 2025. I would say where we are right now is, is we're slightly ahead of that, that overall trend, at least from a timing perspective. Still expect to, to generate $200 million in a run rate, but it's happening probably a little bit faster than we originally expected. That's, that's definitely contributing to operating margin expansion. You see that in the second quarter, where we're up 100 basis points year-over-year. So very nice progress there. And that's in the backdrop of continuing to invest in R&D, as well as in certain areas across commercial, whether that's building specialized sales forces across SET, additional complement in our technology, components of recon, and other parts of commercial. So, we are, as I would say, just summarizing, going a little bit faster than expected on the savings program, and we're in line and on track with that reinvestment plan. ... Thanks, David. Can we go to the next question, please, Katie? Thank you. We'll go next to Matt Taylor with Jefferies. Hi, guys. Thanks for taking the question. I guess I just wanted to ask you more about the hip progress that you're expecting, you know, calling out the opportunity to move back into a share taking position over the next couple years and tying that back to the Analyst Day goal. So I guess I'll ask the question as to when you expect this to really start, and how we should measure your progress against the share gain goals, and are there inflection points along the way that we should be looking out for in your hip business? Thank you, Matt. The short answer was, we have already started. So again, July, so far, so good, when it comes to hip recovery. We launched our surgical impactor, HAMR, midpoint into Q2, and the adoption has been great so far. As you heard from us, we will be launching our triple tapered stem, that's Z1, which is gonna enable share regaining in Direct Anterior. That's gonna get launched late in Q3, early Q4. We have the quantity that we need. We got the commercial plans in place, so that should be another driver. And the third, the third leg here, was to have elegant navigation systems, and we got three of them. This morning, we announced the acquisition of OrthoGrid. That should close later in the year. It's one of the fastest growing navigation platforms in the U.S. So I would say the combination of triple tapered stems, surgical impactors, and three different modalities of navigation, put us in a position to regain market share, in the U.S. and outside the U.S. Outside of the U.S., we're gonna be launching a second generation of robotics, hip posterior robotics, and that's another driver of, share regaining. So we're very confident about, where we are today, and we will get the share back. Great. Just one clarification. So the issues you mentioned in the U.S., you're basically saying those are temporary, related to the surgeons being out, the supply issue, not a change in the market or something else bigger happening? The market is very strong. By now, all of us have reported. So you see that, the market growth rates remain above pre-pandemic levels, so nothing relative to market. And again, I just wanna emphasize that, the two, three things that I talked about, the large volume surgeons being out of the territory, we saw in July, a recovery. On the revision constraints, those are largely solved. And again, that's one portion of our platform, and, again, so far, so good. So yeah, market is healthy. Great. Thanks, Ivan. Katie, can we have the next question? We'll go next to Drew Ranieri with Morgan Stanley. Hi, Ivan and Sukhi, thanks for taking the questions. Maybe, Sukhi, for you to start. Just, you've talked more. You've talked about growth and margin improvement, and increasingly so about free cash flow. But when we kind of look at your guide for the year, it still implies a significant step up in the back half versus the first half. I get some of that would be growth and a leverage opportunity that you kind of talked about, but is the environment supportive enough to see kind of a meaningful working capital improvement? And especially with all these new products coming, and I have to imagine you're gonna be spending on that fact, but just around on CapEx. Just how do you kind of get to your Free Cash Flow guide and your plans on using that cash this year? Yeah. First of all, good morning, Drew. Thanks for the question. There are really three building blocks to the growth in free cash flow from where we start here in the second quarter or third quarter, I should say. By the way, the asymmetry between first half and second half of free cash flow is typical in our business. The three building blocks are really, you have a lot of headwinds in the first half of the year related to rebates from the previous year's fourth quarter that you have to pay in the first quarter. Bonuses and different levels of incentive payments that happen in the first half. So there are certain headwinds that typically happen in the first half that don't repeat in the second half. In addition, in the second half, you're gonna have improved EBITDA through growth, as you pointed out. But secondly, a pretty meaningful improvement in working capital, specifically around inventory. We've already seen that inventory improve from second quarter versus first quarter, and we're gonna continue to see that sequentially improve in the third, fourth quarter as well. So that's a pretty big driver of the overall free cash flow generation and step up into the second half of the year. Relative to where we're prioritizing, we continue to, you know, prioritize in making sure that we've got the right assets and the right level of investment on our organic business. As Ivan talked about, we're actually stepping up our instrument CapEx around OsseoTi. Demand, quite frankly, has outstripped our original expectations, and... Which is a great thing, and we're now catching up on getting those sets out into market. So we feel really good about that, and we're actually putting more dollars against that. But outside of that, I think what you're seeing also is that, you know, we bought some shares back in the second quarter, aligned to our overall capital allocation strategy, which we outlined on our Investor Day. So overall, feel good about where we're headed for cash for the full-year. You will see a second half step-up, typical in every year, and we're gonna continue to prioritize our organic investments. And then from there, our capital allocation remains balanced between M&A and return of capital to shareholders. Got it. Thanks, again. Ivan, maybe just over to you quickly on the OrthoGrid acquisition. Can you just talk a little bit more about how this supports the overall large joint strategy, and maybe how you think this platform could evolve over time across the portfolio or care settings, and maybe eventually into the SET business? Thanks for taking the questions. Thank you, Drew. Very excited. So this, in one word, is optionality. Now, Zimmer Biomet is the only company in the world with three different forms of navigation. With ROSA Hip, you got anterior today, robotic navigation. At some point soon, posterior as well. With OrthoGrid, we have AI surgical guidance. It's a lighter, faster option for some of the surgeons that wanna use a non-robotic option. And then the third vector here, as you know, we have a partnership with Hip Insight, which is the only FDA-approved mixed reality navigation. And that pretty much gives the surgeon X-ray vision over the patient's anatomy, instruments, and implants. So again, a different modality, which some customers seem to like. So we got three different ways to do navigation, and that appeals to pretty much every customer in that regard. We, the broader strategy, we wanna be a company that delivers faster, better solutions, and navigation is an enabler of that. And again, in the big picture, this will enable Zimmer Biomet to regain some of those 200-300 basis points of market share that we lost over the years. Thanks, Drew. Can we have the next question, Katie? Thank you. We'll go next to Joanne Wuensch with Citi. Good morning, and thank you for taking the questions. You mentioned somewhere in the script, several new ROSA robots that you expect over the next three to eight quarters. Could you remind us of, how many is several, and which those are, and how we should think about those launching over essentially the next two years? And I'll throw one more in there for Sukhi. How do you think about the revenue contribution from those robots ramping? Thank you. Hey, Joanne, good to talk to you. Good morning. I think I said over the next four to eight quarters, but, if it is three, let's keep it to four. We're not gonna get into a lot of details giving competitive reasons, but, what, we are committed to launch is a posterior application for some of the OUS markets, where posterior is more prevalent than anterior. As you know, we're gonna get into full launch mode for ROSA Shoulder, later in the year. And again, so far, the voice of customer is being superb. We wanna get, at some point, a different version of ROSA. We're launching 2 different ROSAs for knees. One is gonna be late this year, early 2025. We call it ROSA V15, which has, different levels of, workflows, smart positioning. It's got a different auto balance procedure, and it will be a platform that is gonna deliver a kinematic alignment type of knee. In 2025, at some point, we will have a ROSA CT scan-based for some of our ROSA users that like that type of device. So those are four or five examples of what's coming here, again, over the next four to eight quarters. In addition to ROSA, we have the partnership with THINK Surgical. We got, as I just mentioned, very comprehensive navigation systems. In terms of the revenue contribution, we don't really give details on that. What I will tell you is that we're growing today, end of Q2, double-digit in the U.S. when it comes to enabling technologies. We grew double digit in Q1, and we don't expect that to slow down, and that's pull through for implants. Perfect. Thank you so much. Thank you, Joanne. Thanks, Joanne. Can we have the next question? We'll go next to Larry Biegelsen with Wells Fargo. Good morning. Thanks for taking the question. One for Ivan, one for Sukhi. I'll try to ask them both up front. So Ivan, I'd love to hear an update on the status of Persona IQ, the launch and the short. You know, have you launched the short stem extension and how that could help? And the TPT, we saw you applied for that. Just confident you'll get it and what that could mean for adoption of. That's my follow-up for Ivan on the gross margin here. Done, I mean, I'm sorry, for Sukhi. The gross margin was a little lighter than expected in Q2. You know, what's assumed for the full-year? Did you say that gross margin steps down as the year progresses? So Q3 lower than Q2, and Q4 lower than Q3. And is gross margin still expected to be in line, you know, with 2023? I think that was the prior guide. So I apologize, Sukhi, if I heard incorrectly, your comments earlier, but thanks for taking the questions. Hey, thank you, Larry. First part of your question on Persona IQ, we remain excited. The adoption is speeding up. We should see some acceleration in the second half of 2024, part of the new product contribution for 2024, and in a more meaningful way, in 2025. We've now crossed three billion data points around range of motion, mobility and whatnot. We launched what we call recovery curves, which enables the opportunity for us to cross-reference how certain patients are performing versus others. We're gonna be having a data discussion with payers, so we can engage in some risk-sharing type of agreements. So again, leveraging the data. On the second part of your question, we're gonna be launching that at the full launch at the end of 2024. So we got the approval. The design is ready to go. The sets are ready to go. And again, that's part of the acceleration in the second half of 2024, more meaningfully in 2025. We've now signed agreements, partnerships with some of the major hospitals around the US. And then in terms of TPT, we did look at it. We engaged a third-party consultant. We pulled the TPT application because it didn't make economic sense, or didn't make as much economic sense as we thought. And again, we believe there are different, better ways to monetize the technology. We still have NTAP, but TPT didn't make sense. Yep. Good morning, Larry. On your questions on gross margin, I think actually you largely got it right, but let me just step back and go through it for you. Just year-over-year overall, we expect gross margins to be in line with 23%, but potentially slightly down. That's the new element there, and that's largely driven by the mix of our business. We're just seeing much stronger international sales, which have a lower gross margin than the US. So it's really mix related, but again, in line to potentially slightly down. In the second quarter, you're right, it was a little bit lighter than our expectation. Again, back to that mix component where the US was just much stronger from a growth perspective than the US, for all the reasons that Ivan spoke about. Even in the backdrop of that, Larry, we still managed to expand operating margin by 100 basis points and grow earnings quite, quite nicely. On the cadence, you got it right, and it's consistent with everything that we provided earlier this year, which is to say, gross margin will step down sequentially in the second half versus the first half. And you should see that also Q2 to Q3, Q3 to Q4, sequentially down. The primary driver of that, again, going back to our earlier comments from this year, are really around the inflationary pressure we saw on third-party manufacturing costs from 2023, that got capitalized and are now feathering into the P&L throughout this year. So that's the driver of the cadence there. But again, I'll just revert you back to the backdrop of all that, is we do still expect to see meaningful operating margin expansion for the full-year, and we do expect to see operating margin in the second half step up versus the first half, again, driven by the restructuring program, despite the sequential lowering of gross margin. So, I'm sorry for all the detail there, but I wanted to get it all out in sort of one compact commentary. Thank you. Thanks, Larry. Larry, Katie, can we have the next question, please? We'll go next to Ryan Zimmerman with BTIG. Good morning. Thanks for taking our questions. I want to ask, I'll ask both questions up front. The first one I want to ask is around ROSA versus TMINI. And, you know, when you announced that transaction or you announced that partnership, I think there was some fear that TMINI could replace ROSA, at least in terms of how the stock reacted. And so, you know, Ivan, if you could kind of talk about kind of how you think about adoption of those two options over time, where TMINI fits in terms of either setting of care or utilization? And, you know, does that kind of reflect the proportion of knees and hips that are done in an ASC versus a hospital, and should we think of it that way? Then my second question is just a follow-up to Larry's question on margins for Sukhi. Your price was positive this quarter, but you did call out higher manufacturing costs. So, you know, when do you turn the corner on higher manufacturing costs? You know, is that sometime in 2025 that we see that, you know, improve, and how durable is your pricing benefits? Thanks for taking the questions. Hey, thank you, Ryan. Look, TMINI is not going to replace ROSA, just like, OrthoGrid is not going to replace ROSA. It's all about having breadth of portfolio. TMINI offers CT scanning, which some surgeons like, and C- TMINI is the only handheld robotic platform in the world, which is, something that, in an ASC environment, surgeons seem to like. What I will tell you is that, that we are deeply committed to ROSA. Point in case, all these new platforms and indications we're going to be launching over the next four to eight quarters. Point in case, the commitments we made at the Investor Day of doubling our penetration from somewhere in the 20% of all U.S. knees, done robotically with ROSA, to, 40% in the next three years. ROSA continues to be one of the fastest-growing platforms here at Zimmer Biomet. We grew again in the U.S., our capital sales for ROSA 16% in Q2. Overall, it was double-digit globally. ROSA today is already outside of the U.S., the leading robot platform, number one in Asia Pacific, fast growing in EMEA. And again, we're very pleased with where we are with ROSA, but we know we need to have optionality, and we like our chances when it comes to that. In terms of the revenue contribution of robotics is one of the most meaningful ones, and as we develop penetration, you should assume that our knee and hip number, and shoulder, late in the year, is going to continue to grow. Hey, Ryan. Sukhi. Good morning. Thanks for the question. Let me start with price, and then I'll go to your question on manufacturing costs. So price, as I noted in my earlier commentary, we were positive 80 basis points in the second quarter, and that marks overall a positive pricing first half for the company. I think it's probably the first since I've been here. The way that breaks down is we saw really strong performance in EMEA. APAC was about flat to slightly up in the second quarter, and the US, the US was down year-over-year on pricing. But overall, a very good quarter. That's a combination of a number of variables. One, a more favorable environment. Two, we're getting greater discipline and analytics and governance around pricing, and a better culture, I would say, around pricing. And the third is, we saw some one-time benefits, especially in EMEA, that helped drive that positive performance in price for the second quarter. Our outlook for the full-year on price, originally I started out the year saying that we thought we'd be about 100 basis points. I would say now we're going to be somewhere flat for the full-year to potentially down 50 basis points. And the reason why that flip is in the second half is because some of those one-time benefits that we saw in EMEA in the second quarter, we don't expect to repeat at the same level or intensity in the second half. So that's a little bit about price. Definitely seeing much better improvement and performance this year, and we think a large part of that is going to run into 2025, because a large part of our business is contracted. So again, we'll give more color on 2025 when we get to that point, but really happy about the trend that we've got going here on pricing in 2024. ... Relative to manufacturing costs, yeah, manufacturing costs are higher this year, again, because of the capitalization for 2023. I'm not gonna give specific guidance into 2025, but rather I'll refer back to our LRP and our Investor Day, where we talked about operational stability and gross margin over the LRP. That, in fact, implies that we should start to see operational stability in manufacturing costs through that LRP. But again, as we continue to progress through 2024 and into 2025, we'll provide more color on that. But I, I feel- Thank you, Bob. I feel good about the progress. Yep, I feel good about the progress the team's making on manufacturing costs, and I will say we're finally starting to see some stabilization in overall inflation, both on raw materials, as well as third-party manufacturing costs. So glad to see that inflection. Thank you. Thanks, Ryan. Katie, can we have the next question? We'll go next to Robbie Marcus with J.P. Morgan. Oh, great. Good morning. Thanks for taking the questions. Two for me. First, the outside the U.S., hip and knee came in pretty strong today, even when factoring in the the currency headwind versus consensus. So maybe you could speak to the trends you're seeing there. Is it different Europe versus Asia Pac, and did you see the the same headwinds that you saw in the U.S. with vacation days, or supply constraints there? Yeah, I'll take that, Robbie. Good talking to you here. So the volumes outside of the U.S. remain very strong, in particular in Europe and within Europe, in the U.K., where we know there is prominent backlog. So market dynamics are very healthy, more in EMEA than APAC, but very healthy overall. One of the biggest drivers of growth out of the U.S. is robotics. I mentioned that earlier in my answer to Ryan. I believe we continue to see fast adoption of ROSA in key markets outside of the U.S. We are the number one platform in Asia Pacific. We continue to drive adoption in key countries like Japan, as well as Australia and New Zealand. We have accelerated Persona growth, moving from NexGe n to Persona in these key geographies. So it's a combination of market dynamics and great commercial execution. That's, that's the answer there. Great. Thanks, Robbie. Can you give me the next question? Oh, go ahead, Robbie. Sorry. Oh, do I, do I get a follow-up? Sorry, Robbie, I Just on, Sorry. I was gonna say, the U.S. dynamics that I mentioned are relative to the U.S. You mentioned surgeons being out of the territory. That is very, very focused in one month, in one quarter within the U.S. So this is not a dynamic that we saw outside of the U.S. Wanted to answer your second question. Great. Go ahead with your follow-up. Maybe on SET, you talked about all of the segments grew. Maybe you could just give us a little color into each of the segments there, how they grew, and sort of the trends you saw. Thanks a lot. Yeah. Yeah, thanks, Robbie. I won't get into a lot of detail here. What I will tell you is that the growth drivers, those being CMFT, sports and shoulder, are growing either upper single digit or double digit. And the other three, foot and ankle, trauma, restorative therapies, are growing at different levels, but all of them growing. So the challenge we had with RT, reimbursement-wise, that's behind. So great to see all six businesses within SET performing. Thanks, Robbie. Katie, could we go to the next question? Thanks a lot. Thank you. We'll go next to Jason Bedford with Raymond James. Good morning. Thanks for taking the questions. I guess first, I appreciate you don't guide by segment, but maybe within your 5%-6% organic revenue growth guide, has your internal thinking changed with respect to growth in the different segments? Sorry, can you repeat the question? Yeah. So I'm just wondering, you know, relative to the beginning of the year, your 5%-6% top line growth hasn't changed, but I'm just wondering, has your view on segment growth changed at all? Meaning, is SET now a bigger contributor than you thought at the beginning of the year, et cetera? No, no. We continue to see SET and Recon performing the way that we anticipated early in the year. So again, some timing in Q2 with US Recon, but as we get into the second half, the expectation remains the same. There's no one bigger than the other. Okay, fair enough. And just as a quick follow-up, Ivan, international was strong. You talked earlier about, or you stressed geographic diversification. I was a little unclear, are you, are you entering new markets? Are you allocating more resources to certain geographies? Just if you could expand on this stressing of geographic diversification. Yeah. Thank you. I, I would call it a more focused strategy. Fifteen countries today account for 93%-95% of the overall market potential. In the past, we've been candidly all over the place, and in the last 2 years, call it, we refocused the strategy to those key markets that matter the most. And I won't go through every one of those countries, but it is 15 countries. So OpEx and CapEx is being reallocated to those geographies. Our commercial infrastructure has been modified in those countries, and the way that we focus in those countries is different. So that's, that's what we're doing outside of the U.S. Thanks, Jason. Katie, can we go to the next question, please? We'll go next to Josh Jennings with TD Cowen. Good morning. Thanks for taking the question. A multi-part on the hip franchise and the recovery here. I may have missed some of this in your answers and prepared remarks, but just wanted to focus in on ROSA Hip. Just can you help us think through where robotic assistance penetration is for total hips? Do you think Zimmer's ROSA Hip platform is holding its own? Are you maintaining share in that channel? And then is this OrthoGri d acquisition? Could you integrate that technology into the ROSA Hip application down the line? All right. Thanks for taking the call. Sure. So, I'll start with the question on whether ROSA Hip is performing. The penetration is double digit. It continues to meet the expectations that we had. We believe that we need to have a ROSA posterior application to gain market share outside of the US, and that development is in motion. And we also believe that to a certain segment of customers here in the US, that want a less expensive, faster, lighter application, surgical AI by OrthoGrid is gonna be a good modality. But, so far, all our expectations have been met with ROSA Hip and navigation in general. Thanks a lot. Thanks, Josh. Thanks everyone for the questions this morning. I'll turn it over to Ivan for some closing remarks. Well, I'd like to close the way that I started, with gratitude. I'm very thankful to all the Zimmer Biomet team members for the progress. As I alluded to earlier in the call, this is the 10th quarter in a row in where we're growing mid-single digit or above. We're pleased with the quarter delivering close to five point... Or actually 5.6% ex-FX revenue with double digit EPS. We've proven that we can make commitments and deliver those commitments. I like the fact that we have a diversified portfolio. We don't depend on one segment in one country. It's a well-diversified, sustainable performance. And what we'll tell you is that we are more confident than ever that we will deliver in the guidance that we reaffirm today. Thanks to everyone for joining the call, and I look forward to the next update. Thank you again for participating in today's conference call. You may now disconnect.