Good morning, ladies and gentlemen, and welcome to the Zimmer Biomet Fourth 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, February 6, 2025. 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 David DeMartino, Senior Vice President, Investor Relations. Please go ahead. Thank you, Operator, and good morning, everyone. Welcome to Zimmer Biomet Fourth Quarter 2024 Earnings Conference Call. Joining me on today's call are Ivan Tornos, our President and CEO, and Suky Upadhyay, our CFO and EVP of Finance, Operations, and Supply Chain. 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. For a detailed discussion of these risks and uncertainties, in addition to the inherent limitations of such forward-looking statements, please refer to our SEC filings, including those recently filed related to Paragon 28. Please note we assume no obligation to update these forward-looking statements, even if actual results or future expectations change materially. Additionally, the discussion includes 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 Fourth Quarter Earnings Release, which can be found on our website, zimmerbiomet.com. With that, I'll turn the call over to Ivan. Ivan? Good morning, everyone, and thank you for joining today's call. I would like to start today the way that I always do, by taking a moment to recognize and to show my sincere gratitude to the over 17,000 Zimmer Biomet team members who each and every day across the globe move our business and our mission forward. Thank you for your commitment. Thank you for your tireless work, your strong performance, and most importantly, thank you for what you do every day to serve our customers and patients. Thanks to your efforts, in 2024, we at Zimmer Biomet were able to impact the lives of over 4.3 million patients. This is a phenomenal data point that I know continues to inspire all of us to the core: 4.3 million patients. As I said in the past, and as I will continue to say, the Zimmer Biomet workforce and the culture that we have here truly is one of our key competitive advantages. During the call today, I'm going to cover three things. First, I'll provide a general overview of the fourth quarter and broad market dynamics. Secondly, I'll talk about our 2025 outlook and the drivers of performance for the year and beyond 2025. And then lastly, I'll briefly talk about the recently announced Paragon 28 acquisition. After this, Suky is going to cover all financials in more detail and will make sure, as always, to leave plenty of time for your questions. To begin, I'm very happy to report that in fourth quarter of 2024, we grew sales nearly 5% constant currency. This marks the 12th consecutive quarter of mid-single-digit or better constant currency revenue growth for Zimmer Biomet. This performance in the quarter was driven by mid-single-digit growth in Hips and Knees, as well as upper single-digit growth in S.E.T. These results are particularly noteworthy given the backdrop of the ERP implementation challenges outlined in September. In line with our expectations, we have now exited 2024 at pre-ERP shipping levels, as evidenced by the large volume of shipments that we saw in the quarter. Beyond commercial execution and the outcomes of innovative product launches, our performance was fueled by mid-single-digit growth in our end markets, which we anticipate will continue based on all the analytics that we have at hand involving both primary and second-party sources. An aging and increasing active population, technological advancements improving patient care dynamics around the world, the shift of procedures to outpatient settings like the ASC here in the U.S., as well as data showcasing best-in-class clinical outcomes, will continue to provide tailwinds to these market dynamics, and the growth should continue in the coming years. So again, we see these markets as being very healthy, and we do not expect these markets to slow down. It is important to note that with the solid closing of the fourth quarter, despite some of the challenges in the year 2024, including the already mentioned ERP disruption, we were able to manage the business consistent with our original 2024 financial guidance. So this means delivering near 5% constant currency revenue growth, $8 in adjusted earnings per share, and Free Cash Flow of $1.5 billion. As we look into 2025, we are providing full-year financial guidance of constant currency revenue growth of 3%- 5% and adjusted earnings per share of $8.15- $8.35, which excludes any impact from the Paragon 28 acquisition. These financials are aligned with the LRP, Long Range Plan, commitments that we highlighted at our investor event in May of 2024 in New York, which, as a reminder, involves growing revenue at mid-single digits over the planned period while ensuring that EPS is growing faster than revenue and Free Cash Flow is growing at least 100 basis points faster than EPS. Again, revenue in the mid-single-digit range, EPS growing faster than revenue, and Free Cash Flow growing at least 100 basis points faster than EPS. Suky is going to provide more details in his prepared remarks coming up. As we enter 2025, our priorities have not changed. We're going to continue to over-index on people and culture, priority number one, operational excellence, number two, and thirdly, innovation and diversification. Today, I want to break down these three priorities in a more specific fashion in what we call a four-point plan across the three key priorities of Zimmer Biomet. Firstly, in the priority of people and culture, we're going to continue to ensure that we have the right people in the right jobs. To that end, we have added new leadership in key categories across the enterprise, like a new president for Global Hips, a new president for Global Knees, a new appointed president for our S.E.T. business, and a new leader for Global Medical Education. Secondly, in alignment with our strategic priority of operational excellence, we are committed to elevating our performance in the critical U.S. market. We know that our performance has not been consistent, and we're going to do a far better job in this regard. This means specializing more aggressively in S.E.T., ensuring that we have the right go-to-market formula in all key franchises with the right productivity and the right talent, adding new capabilities and expanding the portfolio and partnerships in the ASC environment. We like where we are, but we want to be bolder in ASCs and continue to launch innovative solutions in robotics while ensuring that we also have the right number of headcounts to drive growth in this vital area. In the background of all of these, we have now announced the boldest direct-to-patient program in the history of the organization, with no less than Arnold Schwarzenegger himself as our Chief Movement Officer. Much more to come in this area. Truly, I'm excited about the potential here in the U.S. Thirdly, in the area of innovation and diversification, we plan to launch over 50 new products in the next 36 months, with several of these products being new-to-the-world product launches. So it's not just the quantity of products, but it's the quality and the disruption associated with these products that excites us here at Zimmer Biomet. To touch on a few of those, starting with Knees, our U.S. portfolio was strengthened in 2024 with the approvals of the Oxford Partial Cementless Knee, the clearance of the 30-millimeter-short version of Persona IQ, and some other plays in our Knee portfolio. We anticipate Oxford and Persona IQ to contribute to growth in the second half of 2025. These products, combined with the steady adoption of our Persona OsseoTi Cementless Knee, will position us strongly in the U.S. market. We're very excited in terms of our Knee portfolio, and we really look forward to the acceleration of the growth in Knees, especially as we enter the second half of 2025. Internationally, late last year, in 2024, we received the CE Mark for Persona Revision. This is already the leading Revision Knee implant in the U.S., and we expect this launch to accelerate throughout 2025. 2024 was also a transformational year for our Hip franchise. We launched Z1, our triple-tapered stem, and HAMMR, our surgical impactor. These two products, in addition to the closing of the OrthoGrid acquisition, which enables best-in-class AI navigation to surgeons, as well as our HipInsight portfolio, the only FDA-cleared mixed reality, are going to position us to grow Hips in a very meaningful way as we enter 2025. I also like that with the acquisition of OrthoGrid, in conjunction with HipInsight and ROSA Hip Navigation, we now have the broadest navigation portfolio in Hip surgery. Again, very excited about where we are with Knees and where we are with Hips, now having the most robust portfolio in recon since the merger of Zimmer and Biomet going back to June of 2015. While we could not be more excited with our Knee and Hip products, Zimmer Biomet is today much more than just large joints. Within S.E.T., ROSA Shoulder has the potential to meaningfully expand the shoulder arthroplasty market by improving the accuracy and reproducibility of the procedure. ROSA Shoulder was the first robotic shoulder system in the world, and it is the only robot in shoulders that can perform both anatomic and reverse procedures. Additionally, in November of last year, we received FDA clearance for OsteoFit Shoulder, the first asymmetric stemless shoulder system in the U.S. We are in full launch mode as we speak and are receiving great feedback from customers all across the U.S. Finally, Zimmer Biomet continues to innovate within robotics. We're going to be introducing a number of new ROSA applications in the short to mid-term, including CT scan capabilities, kinematic alignment for knees, and a posterior hip robotic approach, which is a huge need in the growing international markets. ROSA is already the leading orthopedic robot in Europe, and with these updates, we anticipate continued global share gains. While we continue to launch innovative solutions to address the needs of our growing markets, we are also going to continue to look for responsible inorganic opportunities that fit our strategic, financial, and risk-return metrics, which we need to do in order to diversify Zimmer Biomet and in order to realize our aspiration of residing in a 5% WAMGR environment by the end of 2027. The fourth point in our plan touches on the strategic priority of operational excellence and specifically on how Zimmer Biomet plans to drive margin improvement over the planned period while also reducing inventory needs, hence increasing our Free Cash Flow generation. The plan is already in motion. We achieve results according to our expectations in 2024, and we shall see an acceleration as we progress throughout the year 2025. The execution of these four points mentioned above is going to undoubtedly set Zimmer Biomet for success, not just in 2025, but also in years to come, and by executing on these four things, we'll make sure to deliver on our revenue, earnings per share, and Free Cash Flow goals in accordance with the commitments highlighted in our Long Range Plan. I want to close today's call discussing the very exciting news that we shared recently on the M&A front. To complement our product cycle on January 28th, we entered into a definitive agreement to acquire Paragon 28, which is a leader in the rapidly growing $5 billion foot-and-ankle space. I could not be more excited about this partnership. We maintain our desire to diversify into higher growth segments through disciplined M&A, and this transaction checks the growth, accretion, dilution, and all the strategic boxes that we've been discussing for quite some time. Strategically, once the transaction closes, currently anticipated to be in the first half of 2025, Paragon 28 is expected to expand our foot and ankle deformity offerings while bolstering our existing fracture and trauma, as well as joint replacement portfolios. It is going to move our WAMGR in the right direction. It is going to complement Zimmer Biomet's global footprint, existing infrastructure within Paragon 28's expansive portfolio, and is going to help us drive our U.S. growth and international growth. One very exciting area of this partnership is going to be the ability to expedite our penetration opportunities in the fast-growing ASC market, where foot-and-ankle procedures carry a very beneficial reinvestment that we're not capitalizing on today, while also creating cross-selling opportunities. Lastly, this partnership is going to strengthen Zimmer Biomet's leadership position across musculoskeletal health and lower extremities. I could not be more excited about how we enter in 2025, and we very much look forward to welcoming the great leaders of Paragon 28, including the Chairman and CEO, Albert DaCosta, to the Zimmer Biomet family. In conclusion, we are very proud of the progress of our organization, and we very much look forward to continuing to execute above and beyond expectations. We have a very simple yet compelling plan, and we will execute on it. I 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. And with that, I'll turn the call now over to Suky. Thank you very much. Thanks, and good morning, everyone. As Ivan mentioned, we closed another solid year, demonstrating the resilience and winning attitude of our team members. Despite the challenges we faced, we grew sales nearly 5% on a constant currency basis, expanded adjusted operating margins by 40 basis points, grew adjusted earnings per share by 6% to $8, and generated over $1 billion in Free Cash Flow. Looking at this quarter's results, unless otherwise noted, my statements will be about the fourth quarter of 2024 and how it compares to the same period in 2023. My commentary will be on a constant currency and adjusted operating basis. 2025 guidance commentary will exclude any impact of the recently announced Paragon 28 acquisition. Net sales were $2 billion and $23 million, an increase of 4.3% on a reported basis and 4.9%, excluding the impact of foreign currency. Consolidated pricing was positive 60 basis points, marking the fourth consecutive quarter of positive pricing. Overall, results were underpinned by healthy end markets with good leading indicators on demand for new products. Our U.S. business grew 4.7%, driven by strong high single-digit growth in S.E.T., while international grew 5.2%, driven by high single-digit growth in Knees and S.E.T.. It's great to see that our global S.E.T. growth continues to outpace both Knees and Hips. Importantly, once the Paragon 28 transaction is closed, the combined S.E.T. segment is expected to be larger than our Hip franchise and is expected to continue to grow faster than both our Knee and Hip segments. This aligns with our strategy to diversify into faster growth markets. Global Knees grew 5.6% in the quarter, with the U.S. growing 3.9% and the international growing 8%. We continue to see good uptake from our Persona portfolio and increased penetration of ROSA. Global Hips grew 4%, with the U.S. growing 3.2% and international growing 4.8%. While still in early days, we are encouraged by the feedback on Z1 and look forward to accelerating the rollout of HAMMR in tandem with OrthoGrid. We now have a complete product portfolio in Hips and will be accelerating our offensive strategy as 2025 progresses. Next, our S.E.T. segment grew 8.4%, led by CMFT at 13%, sports at 22%, and upper extremities at 8%. This marks the fifth consecutive quarter of at least mid-single-digit growth in S.E.T., a trend we expect to continue. Finally, we renamed the other category to Technology and Data, Bone Cement, and Surgical to better represent the revenue within that segment. This segment declined 4.3% due to tough comps from the prior year. Turning to our P&L, we reported GAAP-diluted earnings per share of $1.20 compared to GAAP-diluted earnings per share of $2.01 in the prior year. Higher sales and operating profit in tandem with a lower share count were more than offset by higher non-operating expenses and higher taxes, including a one-time gain in 2023 that did not repeat. On an adjusted basis, we delivered diluted earnings per share of $2.31 compared to $2.20 in the prior year, with earnings per share growing faster than revenue. Of note, FX headwinds were more challenging in the quarter than originally expected and accounted for about 5% of earnings per share erosion when compared to 2023. Adjusted gross margin was 71.3%, lower than 2023, as previously guided due primarily to prior year capitalized cost increases that impacted this year's P&L. Adjusted operating margin was 30.8%, 50 basis points higher than the prior year due to revenue leverage and continued efficiencies across SG&A. Net interest and other adjusted non-operating expenses were $62 million, higher than the prior year driven by higher debt and higher interest rates on refinanced debt that matured in 2024. Our adjusted tax rate was 17.5%, higher than 2023 driven by the implementation of Pillar 2, and fully diluted shares outstanding were 200 million, down year over year as a result of our share buybacks. Turning to cash and liquidity, our working capital initiatives targeted towards inventory reduction are paying off as we reduced days on hand by almost 50 days, ending the year at approximately 375 days. This contributed to operating cash flow of $506 million and Free Cash Flow of $403 million, bringing 2024 Free Cash Flow to $1.055 billion, or in the range we originally guided at the beginning of 2024. We ended the quarter with $526 million of cash and cash equivalents. Aligned with our capital allocation strategies, we repurchased approximately $72 million of shares in the quarter, bringing full year 2024 share repurchases to $870 million. We maintain flexibility to continue our share repurchase program and plan to continue returning cash to shareholders on an opportunistic basis over the course of our Long-Range Plan. Now, regarding our 2025 outlook, we expect 2025 constant currency revenue growth of 3% to 5%. Inside of this, we expect stable end markets, flat to 50 basis points of price erosion for the full year, and a modest headwind to growth due to year-over-year selling day differences. With the strengthening of the dollar at recent rates, we anticipate 150 basis points to 200 basis points of headwind from currency in 2025, resulting in reported revenue growth expectations of 1% to 3.5%. Now, regarding the cadence of expected revenue results, we expect that the second half FX growth will be higher than the first half due to more favorable comps related to 2024 ERP challenges, new product uptake, and no selling day impact. Importantly, the first quarter will have one less selling day compared to 2024, which we estimate to have about 100- 150 basis points headwind on revenue growth in the quarter, putting Q1 growth at about 2% FX. Also, you should expect Q2 growth to be muted primarily due to tougher comps when compared to 2024. Fully diluted earnings per share is expected to be $8.15-$8.35. As with revenue, FX has a significant unfavorable impact on our earnings profile, creating an estimated $0.20-$0.25 headwind on earnings per share when compared to 2024. We anticipate full year adjusted gross margin to be in line with 2024 and full year adjusted operating margins to increase versus the prior year, marking the fifth consecutive year of adjusted operating margin improvements. As with revenue, margins and earnings will be stronger in the second half of 2025 versus the first half of the year. When compared to 2024, first half gross margin operating margins will be lower than the prior year due to the impact of higher inventory costs and higher expenses associated with new product launches, sales force specialization, and direct-to-patient marketing. As we progress into the second half, margins will be better than 2024 due to sales leverage, lower cost inventory, and the impact of ongoing efficiency programs. Net interest and other non-operating expenses are expected to be at least $255 million, reflecting higher rates on refinanced debt. Our adjusted tax rate is expected to be approximately 18% for the full year, and fully diluted shares outstanding are expected to be about 201 million shares. Despite the FX pressure on earnings, we expect 2025 Free Cash Flow of $1.1 billion-$1.2 billion, which represents significant leverage versus revenue growth. As laid out in our analyst day presentation, improvements in earnings, sunsetting of foundational investments, and improvements in working capital are expected to drive improved cash conversion in 2025 and beyond. As Ivan mentioned, we entered into a definitive agreement to acquire Paragon 28 last week for an upfront payment of $13 per share in cash, representing an approximate $1.1 billion equity purchase price. In addition, Paragon 28 shareholders will receive one non-tradable CVR, paying out up to an additional $1 per share in cash based on the achievement of certain revenue milestones. The purchase, which will be funded through a combination of cash on hand and debt, is anticipated to be immediately accretive to revenue growth, approximately 3% diluted to Adjusted EPS in 2025, about 1% diluted to Adjusted EPS in 2026, and accretive to Adjusted EPS within 24 months following the closing. We expect the transaction to close in the first half of 2025, after which we will provide updated guidance for the full year. It is important to note that after the closing, we expect to maintain a strong balance sheet and investment-grade credit rating with the optionality to continue to invest against our capital allocation priorities. I'd like to close by thanking the entire ZB team for their resilience in overcoming significant challenges in 2024. Through your dedication, we achieved robust financial results with sales growth of nearly 5%, adjusted operating margin expansion for the fourth straight year, and over $1 billion in Free Cash Flow. I look forward to your winning spirit in 2025. And with that, I'll turn the call back over to David. Thank you, Suky. Operator, let's open it up for questions. In order for us to take as many questions as possible, please limit yourself to one question. Operator, please go ahead. Thank you, David. Ladies and gentlemen, at this time, we will begin the question and answer session. In an effort to get through as many questions as possible, please limit yourself to one question only. One moment, please, for the first question. Our first question comes from Robbie Marcus with JP Morgan. Oh, great. Good morning, and thank you for taking the question. Ivan, Suky, not sure who this is best for, but wanted to ask on just the guidance philosophy in general. I think last year it was, we're guiding to what we think we could do. This year, we see what appears to be a more conservative guide, both on the top and bottom line. How are you thinking about the guidance range philosophically, and what should we be expecting throughout the year? Thanks a lot. Hey, thank you, Robbie. Ivan here, good morning. So I would say that it's somewhat of a different philosophy guidance-wise from 2024. And as I said before, we're not going to apologize for the guidance we delivered in 2024 early in the year. We actually met that guidance, as you heard today, in revenue, EPS, Adjusted EPS, and Free Cash Flow. I think we were 20 basis points below revenue. That said, for 2025, it's a different philosophy. We deem the range that we provide today to be appropriate. I don't know if I'll use the word conservative, but definitely appropriate. Keep in mind that it's one day less in 2025 versus 2024. And at the same time, Robbie, we see more drivers to bring us to the upper range versus the lower range. We're excited about new products. Most of them do become far more material in the second half of the year. Excited about the investments we're making in the ASC, ambulatory surgical space. We are adjusting some things in the U.S. that I believe can bring us to the upper range of the guidance. Let's see what we end up in pricing for consecutive quarters of federal pricing. Let's see what happens in 2025. We'll go one quarter at a time. And in the first half of 2025, you've seen the investments we make in OpEx, so we should see a return on those investments as we get into the second half. So net-net, appropriate guidance. And again, we see more drivers to get us to the upper range than the lower range of that guidance. So extremely confident in the range provided, and we look forward to updating every quarter and hopefully exceed those expectations. Appreciate it. Thanks a lot. Thank you. Thank you. We'll go next to Patrick Wood with Morgan Stanley. Beautiful. Apologies for the crackly voice, but thank you for taking the question. Congrats on Paragon 28. Basically, on that side of things, my question is, how are you thinking, A, about the opportunity to push it through your distribution sales network, both in the U.S. and O.U.S., and drive it on the top line that side? And B, how are you thinking about managing any potential disruption as you integrate it? Thanks. Thank you, Patrick. First things first, we're very excited about this acquisition. I spent last weekend in Orlando with the sales team. The culture in the company is second to none. The innovation that they have, I've not seen anything like that in my 31 years in medtech. They have 50 active projects in the space. Upon closing the transaction, we're going to be a leader in six of the key categories in the space. And they have an outstanding channel, which we don't. So our thinking is that we are going to preserve that channel, fully dedicated to a foot and ankle. We are bringing the management team over to Zimmer Biomet, standing with the CEO, Albert DaCosta. So we see minimal disruption when it comes to commercial execution and the channel in itself. We're preserving innovation. It's a separate design center that is going to continue to fuel innovation to the space. So the two key drivers that are enabling the growth that they have seen, 18% CAGR over a period of time now, we don't see that going away. In terms of the second part, disruption, the fact that we're going to run this in isolation, we see minimal disruption. Obviously, we pay attention to the usual suspects. Do we have the right quality management systems? Are we doing all the things we need to do from an operational standpoint around inventory? But again, as we see here today, we're feeling very, very excited and very confident that we can integrate this with minimal disruption. Thanks, Patrick. Love it. Thank you. We'll take our next question from Steven Lichtman with Oppenheimer & Co. Thank you. Good morning, guys. Suky, you provided some color on first half versus second half for this year, but I was wondering if you could talk about guidance cadence a little bit more for the year, excluding Paragon. How should we think about sales growth and margin progression during 2025? Thanks. Yep, absolutely. Thanks for the question, Steven. As Ivan mentioned in his opening remarks and the first Q&A, there are a number of moving parts that are going to impact the cadence. So it's a great question. We try to provide some color. I'll give a little bit more here. But let me start with some of those moving parts around selling day impact, the FX headwind that we talked about in our prepared remarks, new product uptake, which we're very excited about, some of the investments that Ivan referenced that we believe is going to drive growth not only later in this year, but beyond this year, and then our continued efficiency profile and push for efficiency and margin expansion. If we start with revenue, we would, again, 3%-5% XFX is the guidance range. There is a pretty steep FX headwind, which then takes our reported guidance to 1%-3.5% on a reported basis. Inside of that, we project that Q1 will have the lowest XFX growth, excuse me, of about 2%. And that's primarily due to the selling day headwind that we referenced earlier in our remarks. That's worth about 100-150 basis points. The second quarter growth, which has the toughest comp when compared to last year, will be aligned to Q1 once you adjust for that day rate headwind. Okay? And And then in the second half of growth, we expect that to be faster than the first half, really, because you don't have that selling day headwind. You're going to see a much greater ramp-up of new products that Ivan referenced earlier. And then you've got the easier comp related to the ERP, which really impacted us in the second half of 2024. As we said, FX is going to play a pretty big factor. And so we expect that to be a headwind. It's roughly about the same in the first half versus the second half, with the first quarter and the third quarter being the biggest impacts. And that's around 200 basis points of headwind in each year. Hopefully, that gives you a lot of color on the revenue cadence all the way from FX, excuse me, down to the foreign currency impact. And then if you move on to margins, as we said in our prepared remarks, overall, we would expect gross margins to be in line with 2024 and operating margin to be up year over year, in line with the guidance and the profile we provided on our LRP earlier in 2024. First-half margins will be lower than the first half of 2024, primarily due to lower gross margin, as expected, and as we've talked about through 2024, and higher OpEx related to the investments Ivan discussed. Some of those investments are on specialization around S.E.T. We're increasing our critical mass around ASC and robotic commercialization efforts. We're ramping up DTC. All of these things, we believe, will have a near as well as mid and long-term impact on revenue growth, positive impact. Q1 operating margins, we expect to be down about 250 basis points versus the first quarter of 2024. And Q2 will be down slightly when compared to Q2 2024. However, second-half margins will be better than the second half of 2024, as well as the first half of 2025, due to better revenue profile, higher gross margins in tandem with year-on-year efficiency gains. So overall, we're confident in the guidance we're providing. As Ivan said, we think there are levers to potentially do better than that. We're also very excited to bring in the Paragon asset into our portfolio. And again, feel really good about where we're headed in 2025. Appreciate the additional color, Suky. Thanks. We'll take our next question from Matt Taylor with Jefferies. Hi, good morning. Thanks for taking the question, guys. I did want to follow up on Paragon 28 and maybe ask you about the way the deal structured with the CVR structure. It implies that you could grow that business about 16%-19% and above consensus. So I would love your comments on how you think you might be able to actually accelerate growth or at least beat what the street was thinking with Paragon 28 and also maybe talk about your ability to do additional deals as you digest this one. Yeah, so maybe I'll start with the growth portion, so the revenue synergies that we embedded in the model are appropriate. Beyond what we have in the model, we're thinking there are additional synergies. First and foremost, Paragon 28 is not a company that today is present or too present in the ASC space. There are a variety of opportunities there to do cross-selling, extend contracting. So that's definitely a growth lever. There are opportunities from our trauma and biologics business to put those products in the back of the dedicated channel that Paragon 28 has. So it's a great opportunity there. And then there are other opportunities internationally. So they have 20%-30% of the revenue coming outside of the U.S. We have a large infrastructure outside of the U.S. So again, those are some of the revenue synergies that can get us above the committed growth rate. In terms of your second question around doing other deals, the firepower is there. What we want to do right now is to integrate Paragon 28 into the company, prove to everyone that we can do this type of deal with minimal disruption, and then we'll think about the next deal when it's time to think about the next deal. Thanks, Ivan. Thank you. We'll take our next question from David Roman with Goldman Sachs. Thank you. Good morning, everybody. I wanted just to spend a couple of seconds here on margins. Suky, at the analyst meeting, you had introduced a trend that expected two years of gross margin headwinds. And I think a big piece of that had to do with the then-currency dynamics at play, which have obviously evolved significantly over the past seven or eight months. So can you maybe firstly update us on how the trajectory of gross margins are trending relative to those expectations? And then secondly, what is the path to turning gross margins around on a reported basis, considering where we are today on FX and then some of the other operational matters that you've been undertaking to improve gross margin, like inventory turns, etc.? Yeah. Yeah. Thanks for the question, David. So first of all, overall, the headwinds, tailwinds as we think about 2025, just stepping back, I talked about gross margins being in line with 2024. Some of the headwinds that we would expect to see is you have normal inflation every year. Fortunately, that inflation rate has stabilized to sort of pre-pandemic norms. So that's good to see. We're continuing to lap in some of capitalized cost increases at the end of 2023 and beginning of 2024, which will impact the P&L, especially in the first half of 2025. We're forecasting that pricing could be a modest headwind to gross margin. Still, well better than our historical norms on pricing. I said somewhere around flat to maybe 50 basis points of erosion coming off a year where we're positive. We'll see where we end up. Overall, a more positive trend, but still a modest potential headwind. Those are sort of your three big headwinds on gross margin. When you think about the tailwinds, it really, and sorry, FX, as you noted, is another headwind inside of that, which we've talked about at length over the last year or so. The tailwinds are really around our efficiency gains, which we continue to make a drastic improvement in repositioning our footprint into lower-cost markets, as well as better utilization of our plant footprint, which gives you more better absorption. We're improving our mix through new products, but also from a geographic perspective. And lastly, we're seeing lower E&O, excess and obsolescence, as we continue to improve our inventory positions. And we made really good progress in 2024 on reducing overall inventory. So those are the puts and takes, again, which broadly keep us in line with where 2024 margins were. As you think about the cadence for gross margins in this year, we would expect the first half of this year to be broadly in line with how we exited 2024. So you should think about our Q4 gross margin into the first half of 2025. And then you should see a sequential step-up into Q3 into Q4 with the largest benefit in Q4, really coming off of those efficiency gains that I spoke to earlier, as well as the excess and obsolescence gains. Now, with the FX changes we've seen, right, the strengthening of the dollar, that will or should give rise to additional FX hedge gain benefit. Those benefits, however, will likely get capitalized in 2025, assuming rates stay where they are today. It's a dynamic environment. And if that happens, those would then materialize into our P&L into 2026. So a lot of moving parts there. I think the key takeaway is we continue to make fundamental improvements in gross margin, again, keeping us flat to 2024, despite those FX hedge gain headwinds that I had talked about earlier in 2024. And we do see an opportunity to maintain that stable environment or potentially improving over time. And inside of all that, we still have a profile where we're looking to expand operating margins this year. And again, we're coming off a track record of four consistent years of expanding operating margins. So hopefully, a lot of color there gives you what you need there, David. Yes. Thanks, Suky. Appreciate all the detail. Thank you. We'll take our next question from Larry Biegelsen with Wells Fargo. Hey, good morning. This is Vik in for a question for us on tariffs on Mexico and Canada. Can you provide some color on how much of your manufacturing is coming from either of those two countries and how much flexibility you have to move production elsewhere and also to take price, either qualitative or quantitative? Thank you. Yeah. Simple answer. We do no manufacturing in Mexico. We do no manufacturing in Canada. Two-thirds of our manufacturing is in the U.S. So we are evaluating what happens in China. There are single-digit volumes coming out of there manufacturing-wise. But at present time, all the scenario planning that we've done is embedded in the guidance provided. I think that's the key takeaway. While we don't do manufacturing in Mexico, we do have some third-party supply that comes out of Mexico. But as Ivan said, the impact as contemplated on recent announcements is embedded in our guidance range. Thank you. We'll take our next question from Ryan Zimmerman with BTIG. Good morning. Thanks for taking the question. Extremities grew 22%. It was a phenomenal number. Can you just talk about it, Ivan, in terms of what's driving that, how durable you see that? And we appreciate the color you're giving inside of S.E.T. and just should we expect similar levels as we move into 2025? Yeah. Just a small correction. Sports grew 22% in the quarter. And the overall S.E.T. grew. Yeah. Yeah. Yeah. Sports 22%. S.E.T. S.E.T. as a whole in the quarter grew 8.4%. Extremities upper single digit. This is now four or five quarters in a row we're growing mid to upper single digit, mostly upper single digit. And we see this as durable. What's happening here, first of all, we did add a lot of products. So from an organic and inorganic standpoint, I'll tell you the sales back today is totally different than it used to be. In addition to the products, we added a ton of people, and we're going to continue to add more specialized people. That's some of the OpEx investments you've seen in the first half of 2025. We have dedicated resources to the ASC space that we didn't have before. So it's just a different business altogether. As you heard in the prepared remarks, upon closing of the Paragon 28 deal, our S.E.T. business now is going to be as large, if not larger, actually, than our Hip business and growing two, three, potentially 4x that rate. So again, really excited about that S.E.T. And we do see this business as a durable business growing at least mid single digit, likely upper single digit. Thanks for the question. Thank you. We'll take our next question from Danielle Antalffy with UBS. Hey, good morning, guys. Thanks so much for taking the question. Really appreciate it. Ivan and Suky, I wanted to dive a little bit more into the ASC opportunity because I think that's a potentially meaningful growth driver as Zimmer focuses there and leverages Paragon for that. So I wanted to see if you could maybe give us an update on percent of revenue today or maybe procedure volumes that's going through the ASC and how now with Paragon it's the product portfolio that can help you win in the ASC. Thanks so much. Good morning. Thank you, Danielle. It's a huge opportunity, the ASC. Back in 2019, roughly 2-3% of sales here in the U.S. came from the ASC environment. Today, the number is quickly approaching 20%. We remain the number one company in Hips and Knees in the ASC space. And with the addition of the sports portfolio, now foot and ankle portfolio, and other categories, we think we can elevate the growth profile in the ASC space. The things that we're doing, as I just mentioned, we have added people. We have added partnerships. CBRE comes to mind. We have already signed up a deal with CBRE in that space. We have active partnerships with STERIS. We have active partnerships with Hillrom. So there's not a single product gap that we have when it comes to contracting. And then lastly, products. We continue to innovate with the ASC in mind. What are products that make the surgery faster? What are products that make the surgery more efficient? What are products that deliver not just a clinical outcome, but also an economic outcome, which is paramount in the ASC? Relative to Paragon 28, that's a revenue synergy that we didn't contemplate meaningfully in the model, but it is real. Bunion procedures here in the U.S. have very favorable reimbursement. As I mentioned earlier, Paragon 28 has not been that present in the ASC. We are very present, as you know, in the ASC. So we deem that to be a very meaningful opportunity moving forward. So, net-net, very excited about where we are. And then relative to your question on the volumes, we deem that roughly 40%-60% of all the cases in core orthopedics are going to be moving to the ASC in the next three to five years. And again, it's not lost on me that that's a wide range, but that is the third-party research that we've done. So it's meaningful. Thanks, Danielle. Thank you. We'll take our next question from Travis Steed with Bank of America. Hey, thanks for the question. I guess I just wanted to kind of push a little bit on the EPS growth and the guidance. I know you said you could still get some margin expansion this year. Want to make sure, just why was the EPS guide kind of where it was? Why can't you do a buyback or something to offset some of the headwinds this year just to give investors a little bit more EPS growth? And when you think about the revenue ramp over the second half, what's going to give you the confidence kind of in the second-half revenue ramp here over the course of the year? Thank you. Yeah. Why don't I take the EPS question and I'll let Ivan talk about the revenue ramp in the second half. The biggest part of the EPS guide and not having as much growth in the bottom line is really around the FX impact, which I think I talked about on my prepared remarks of being $0.20-$0.25, which is not insignificant. We are going to expand margins this year. We contemplated potentially driving more, but then in the backdrop of investments we think are critical to drive the business and the growth, not only this year, but beyond, we think that the profile still hits our overall LRP metrics of expanding operating margin and driving reported earnings per share leverage. So that's really where we are on the earnings per share side. On operating margin, again, we feel very comfortable in our ability to drive that operating margin expansion this year, especially based on my earlier comments, maintaining stabilized gross margin and continuing to find efficiencies through SG&A. On your question around share buybacks, our current assumption is that we don't have any share buybacks. We assume right now in the modeling and my prepared remarks that overall share count will remain flat. The good thing is coming out of the Paragon 28 transaction, we're going to have a very strong balance sheet, which is going to leave us optionality to continue to pursue our capital allocation strategies as I laid out back at our LRP, which is a balance of M&A and return of capital to shareholders. In 2024, I think we returned over $850 million. So we're well on that pathway of at least 65% back to shareholders. And we're going to continue to evaluate that and be opportunistic based on market conditions and Free Cash Flow, which is very strong for this year and going forward. Second part of the question on the revenue acceleration on the second half, lots of things that I can dance around, but maybe I'll frame my answer in four bullet points. First, pretty obvious. The second semester of 2025, the second half, is going to benefit from the comps versus the ERP challenge that we had in 2024. Recall that we took a beating of 60-80 basis points due to the ERP. So you have a comp benefit in the second half. The second piece is new product introductions. As you probably have heard and as you have seen, a lot of these new products that we're talking about got their approval, whether it's CE Mark in the case of Persona Revision or 510(k) approvals late in 2024. So the first half is about training, is about getting the sets together, is about doing all the things we need to do, and you really do see the ramp-up of most of these new products in the second half of 2025. The third one is the return on the OpEx investments that we're making in the first half of 2025, whether it is sizable investments in direct-to-patient activities, whether it is the training associated with all these new product launches, both internal and external trainings, whether it is the marketing materials. There's a lot of investment in the first half of 2025 that pays back in the second half. And then lastly, the fourth bullet point is really timing for international business. We're going to see an acceleration of international growth in the second half of 2025. So really excited about where we are in the year, especially as we get into the second half of the year. Thanks for the question. Yep. Thanks a lot. We'll take our next question from Rick Wise with Stifel. Good morning, Ivan. Hi, Suky. Ivan, just one of those four excellent points you made as to why we're going to see a stronger second half revolves importantly around innovation. I was going back to your slides that you presented at JPMorgan, and you presented a slide on the pipeline and six major products launching. It seems clear these are big markets. These are areas where you haven't had the appropriate products or technology or in some cases, any technology. Each one of them seems like it carries a price premium, like 10%, 15% kind of price premium. Help us understand, I guess, two parts. One, which of the products in the second half are going to be most impactful? The Z1 triple-tapered hip stem seems like one to me, but which should we focus on? And in providing guidance today, to what extent are you providing an optimistic view of what seemed like truly impactful product portfolio launching on a broad front? Thank you. Great question, great challenge. And no, I don't see today we're providing an optimistic view on the impact of these new products. Z1 is a meaningful opportunity. Recall, Rick, that we got the initial launch of this product in Q3 of 2024. We're getting to full launch mode as we speak. I would say Z1 is going to be very meaningful in the second half of 2025. You should see us getting back to gaining share in U.S. Hips, which is something we've not done for a while. It's a $1.5 billion market, and we believe we have a differentiated offering. So definitely pay attention to that one, which, by the way, in combo with our surgical impactor drives meaningful growth. So I would say those two, HAMMR and Z1, are the main drivers of growth in the U.S., especially in the second half. In this, Persona OsseoTi was launched in 2024, but we didn't get the S.E.T. and everything ready until the second half. We exited 2024 with cementless penetration in the U.S. around 25%. Every time that we go from cemented to cementless, we gain 15% ASP. And as we enter 2025, I do think we're going to see an acceleration there. And if I were to just really highlight one product that is truly differentiated, it would be Oxford Partial Cementless. In the U.S., we have lost over the last three to five years 700 basis points of Partial Knee market share. I'll say that number again. So I think that's going to explain some of the trends you've seen. We lost 700 basis points of Partial Knee market share, and with Oxford Cementless, we believe we can get back to where we were. It's a $1 billion market, growing upper single digit. We got the approval for this product in late November 2024. It is the only PMA FDA-approved product in the U.S., which means that if you want to compete, you have to go through a PMA. It could be up to 10 years. We got over 300,000 cases done in Europe. It has the best registry data of any Partial Knee in the world, in the U.K. registry with 33,000 patients, so I can go on and on, but this is truly a differentiated product, and I think as we continue to train people, get the sets ready, Oxford Cementless is going to be a very meaningful product as we get into the second half of 2025. So I know I said a lot, and it's always hard to pick your favorite child, but it's a very compelling portfolio. Thank you, Ivan. We'll take our next question from Matt Miksic with Barclays. Hey, thanks so much for taking the question. So had a couple of questions on the Paragon 28 acquisition, just one on the sales force and integration and what your thoughts on that look like, given that it's one of these independent, exclusive, but independent field force organizations. And the other on the total ankle. I know it's not obviously the reason, the only reason you'd go after an asset like this the way they're growing, but every one of these small lower extremities acquisitions seems to have involved somehow divesting an ankle. And just would love to get your thoughts on that. Thanks. Thanks, Matt. I'll take both of them. Starting with the sales force, yes, they are exclusive. Yes, they are 1099s. We also have exclusive 1099 sales forces here at Zimmer Biomet. Our CMFT business is a 1099 sales force, and it's exclusive. We know how to run these businesses. As I mentioned earlier, I was in Orlando this last weekend at their sales meeting. We've made a very strong commitment to bring that sales force over here. As long as we continue to fuel innovation, which we will, as long as we continue to take care of that sales force, which we will, I don't see any reason, any disruption in that regard. As a reminder, we don't have a dedicated sales force in foot and ankle here at Zimmer Biomet. There is no disruption when it comes to duplication, when it comes to selecting who's going to cover what territory. I would say it's a very simple integration. On the portfolio, we didn't buy just total ankle with Paragon 28. We're getting a leadership position in forefoot, fracture fixation, flat foot, total ankle, of course, Charcot, and biologics. We don't see any reason today where there's going to be disruption in total ankle, given our market share in that space and what they have going on. So I would say this integration is as simple as it gets, and we look forward to closing the transaction. Great. Thank you. Thank you. Try not to talk while I'm answering this again. I'm sorry. We'll take our final question from Jason Bedford with Raymond James. Thanks. Good morning. Just two quick questions. I think there was in the second half of 2024, I think it was impacted by about $50 million because of the ERP issue. Do we assume that you're assuming this business is lost, or is there some sort of recoupment embedded in the 2025 guide? And then just quickly on the new product question, when will you be in full launch mode with Oxford Cementless? Can you repeat the second part of the question? I got the ERP, but I didn't get the second part. Yeah. Sorry. The second, so two questions, sorry. When will you be in full launch mode with Oxford Cementless? Okay. So I'll start with the second one. Second half of 2025, we have the sets, we have the training done. So that's full launch mode for Oxford Cementless. So being a PMA-centric device, we have a policy of no train, no use. And we're running extensive training throughout the first half of 2025. So second half is when you are already in full launch mode. In terms of the ERP, a lot of moving parts. Did we lose some business? In In areas like surgical, in components of sports medicine, yeah, we did lose some business given the ERP. In other areas like recon Knees and Hips, there might have been some delays. Certainly, we had an impact on new product introductions in the second half that now have moved towards first, second half of 2025. So there's a lot of moving parts, and it's hard to quantify. Okay. Thanks. That will conclude our question and answer session. At this time, I'd like to turn the call back over to Ivan for any additional or closing remarks. Yes. I started with gratitude this morning. I want to close with gratitude to the sales force and to the employees of Zimmer Biomet. As we sit here today, it's a totally different company across three vectors: strategy, financial results, and culture. Strategically, we've moved from a WAMGR profile in the three range to a four and a half by the time we divested Spine and Dental and now added Paragon 28 into the portfolio. Excited about where we are with Paragon 28. That's a $5 billion market, growing 7%-8%. And we got no gaps in our recon portfolio. That's not where we were three, five years ago. So a totally different company from a strategy standpoint. Financially, I think you got the data points to the prepared remarks in the Q&A. At the end of 2025, assuming we deliver on this guidance, it'll be five years of mid-single digit or above revenue growth, five years of operating margin expansion. We have broader leverage ratio to the low end, and we are driving Free Cash Flow conversion at a different pace than we used to, and then culture-wise, we continue to have high engagement, dedicated, motivated organization, and we look forward to updating you on our Q1 results in early May. Thank you for your time. Thank you again for participating in today's conference call. You may now disconnect.