Thanks so much for joining us. My name is Matt Miksic at Cover Medical Devices here at Barclays, and I am so pleased to have with us today Zimmer Biomet. Ivan Tornos, President and Chief Executive Officer, Suky Upadhyay, CFO. Thanks so much, especially busy week at AAOS. You're welcome. Making it to the last day of our conference, I can't thank you enough for coming. Great to be here. I wanted to maybe start with a comment on just the market, because that's something I think you have been sort of vocal about, about where we are in this post-pandemic, you know, elevated but maybe settling, you know, volume environment in orthopedics. You know, what's been your message, you know, how we should think about this year versus last year and maybe the next couple of years in terms of just volume growth and demand and opportunity? Sure. First things first, good morning to everybody. Matt, you are the only banker that I know that knows how to pronounce his last name. That's extremely, extremely impressive already. Thank you. Market, this is the new normal. This is the new normal. We got a lot of data to validate this is the new normal. What I mean is that the current volumes that we've seen, the pricing stability that we're seeing, we believe is durable. We pegged the market around 4-4.5%. At the academy this week, some of our competitors think it's 4.5-5%, so call it 4-5% in terms of market growth. We're not going backwards. What's driving this market stability? External and internal reasons. Externally, you know the deal with demographics. We're getting older, we are active. 10,000-12,000 people turn 65 years of age here in the U.S. every day. That's a factor that you see across all of med tech. If you talk to people in cardio, general surgery, diabetes, it's not an orthopedic phenomenon. This is the reality of demographics. ASCs here in the U.S., ambulatory surgical centers, that is a huge tailwind for volumes. Before, you had to go get your case done in an inpatient, maybe outpatient hospital setting. Now people are going to ASCs, going on a Saturday morning, leave the same night. Hospitals are not idle. They're not sitting there without cases. As I tell people, orthopedics is the second highest margin contributor to any hospital. With the average hospital in the U.S. operating with 1.5% to 2% operating margin, if there is one specialty they want to lose, it's orthopedics. All of that to say that there's a double dip in effect. Cases going to an ASC, cases going into an inpatient HOPD at the hospital level. Internally, it's technology. The fact that we're making these cases better, the fact that the surgery is faster, the fact that we are taking complexity out of the overall episode of treatment is another tailwind for people to go in there and want to do the surgery. When I say we, I'm talking Zimmer Biomet, Stryker, Johnson & Johnson, Smith & Nephew. There is a lot of disruption in technology, and that creates a situation where patients are more willing to go through the procedure. The surgery is simpler, and so is the physical therapy. It used to be three months, now you see people up and running, you know, six weeks later. The last one I'll talk about is pricing. We've seen now three, four years of pricing dynamics moving in the right direction as an industry, orthopedics. The product side of the equation, the implant is now something like 20-25% of the DRG, whereas 10, 20 years ago it was north of 50%. We are not the main offender in the economic side of the equation there. We continue to see price durability, 80% of our book of business is contracted. This is the new normal. Yeah. No, that makes a lot of sense. We had a clinician panel earlier in the week in talking about the sort of the wave of sort of older patients that are finally really starting to show up. In addition to that demographic wave, maybe talk a little bit about, and maybe this gets to your point about patients willing to have the procedure, you know, also maybe surgeons willing to suggest the procedure for younger patients. Yep. I'll start with the age factor. Prior to COVID, in the U.S. the average age for a knee replacement, according to CMS, was 66 years of age. Today, 61. For hips, it's gone down from somewhere in the upper 50s to the low 50s. Shoulder went from 53, 54 to 49, 50. The fact that we're getting active, the fact that technology is better is inciting surgeons to say, "I'm okay now putting a shoulder on you or a knee or a hip," because maybe you don't need to go through a revision, you know, 10 years, 15 years from now. There is better data there. That's on the product clinical side. On the side of care, I'll say it again, you know, you used to go to a hospital on a Monday, your length of stay was averaging around three days. A lot of those cases are now day cases for both knees and hips. You know, you go in the morning, you leave at night for a lot of hip and knee cases, and then for hip, it may be a one-night stay. Definitely different reality that we're seeing. Right. There's been an ASC build-out. You know, I think, you know, in the very, very early days, there was a fear that, you know, ASCs would pick up and they would sort of take all these cases from the hospital. From what we see, and you see much better than we do, is that the ASCs have built out and it's basically just expanded capacity. That's it. Bandwidth benefits as well. That's it. That's it. That's it. Volumes are very strong. They're going to continue to be strong. 40-60% of all cases are going to move to ASCs over the next three to five years. Again, I am not aware of any single hospital in the U.S. that now has operating rooms that are not doing orthopedic cases. Double dipping. The last thing I'll just ask about, comment on about the market is that this is one of the, you know, folks get a cardiac procedure when they need a cardiac procedure, but this is a sort of patient expectation, patient activity-driven procedure. Like, I want to have a life that involves golf or something. It is. Therefore I need to do this procedure. Maybe talk about how activity levels, I don't know, health and wellness is just generally driven higher demand for folks being able to walk and do things into their 70s, 80s, and 90s. We sponsor pickleball for a reason. There is a lot of desire to be active. We are seeing exactly that, that people do want to have a different lifestyle. The last two years of the sports medicine business has been growing double digit. Our shoulder business, upper single digit. Parts of S.E.T. that are directly related to mobility are in the teens. It is real. It is real. Okay. With that in mind, you know, you're sort of taking growth up. You put your LRP out. You're shooting higher for things like share and, you know, overall portfolio growth. We can talk about, you know, the additions to the portfolio in a second. You know, what parts of the core reconstructive business, the key hip and knee business, do you feel like, you know, you've been executing well at, and which parts are you sort of leaning into to sort of hit some of the higher growth rates that you talked about in your LRP? Yeah. Our book of business has three components. You got reconstructive, which is knees and hips. You got what we call S.E.T., which is six businesses. You got shoulder replacement, upper extremities. You got CMFT, which is cranial, maxillary, facial, thoracic. You got sports medicine. Those are the three key product categories of S.E.T. You got foot and ankle. You got biologics, and you got trauma. The third segment is technology, other. Starting with reconstructive, we still are the number one knee and hip company in the world. We have not done what we had to do in the hip category. We lost over the last three to five years, we lost here in the U.S., 300-500 basis points of market share. Averaging about 100 basis points per year. Why? We did not have the portfolio. Today, as we enter 2025, we do have the full portfolio. We'll talk about products later. There's no reason why we should not be gaining or regaining market share. On knees, we're staying afloat. Given the introduction of four key products over the last year, year and a half, we should accelerate our growth rate in knees. That's on recon. On S.E.T., we had, as I mentioned, three product categories that were growing strongly: CMFT, shoulders, and sports medicine. I just mentioned some of them growing double digit. We were declining in foot and ankle. That's going to stop with the integration of Paragon 28. That should be another growth driver, a strong, you know, mid-teens growth driver. That leaves you with trauma and biologics. We believe that biologics is going to be accelerated. Trauma right now is a defense business. We like the cash flow that it generates. We don't like the working capital requirements of trauma. We are fifth in that segment. It's not the one area where we want to deploy capital. You got technology, another. Technology, we continue to see great adoption of ROSA. We're launching three ROSA indications in the next 18 months. Beyond ROSA, our flagship robot, we got three different forms of navigation. You got mixed reality, less complex navigation, and surgical guidance powered by AI. That's OrthoGrid. All of that to say that that is another growth driver for the company. In the other, I'm not going to go through all the categories, but they're growing where they need to be growing. That's a bit of the summary of the portfolio. Okay. So, hips, you know, prepared to kind of lean back into share with the portfolio changes. Maybe talk about some of the catalysts in knees. There's Press-fit, but then also even going back to what we just talked about with the market, more younger patients, more revisions. You know, how does like a revision system and, you know, the addition to the portfolio in that category kind of positioned you to do better in knees? Yeah. Maybe for extra credit, I'll answer knees and hips. Two for one. The seven products that we've paid attention to this year is what we call the Magnificent Seven. I didn't come up with the tagline, but I do like the tagline, right? We got seven products that we believe get Zimmer Biomet to consistent above market growth rates in reconstructive. From left to right, in order of importance, you got Persona OsseoTI. That is our cementless knee. This is a product that we launched really early, if not late 2023. Early 2024, late 2023, got the full deployment of sets throughout 2024. That is a major tailwind for the company. We generate a 15% ASP uplift every time we move from cemented to cementless. I was just at the academy this week. The feedback on the product is outstanding. This is a huge category with a shift to the ASC. It's going to be a great tailwind. That's number one. Number two, you got Oxford Partial Cementless. This is the only partial cementless knee in the U.S. we're launching that as we speak. If you want to compete with me, you have to go through a PMA. If you're going to do a PMA, a pre-market approval, clinical trial, that's going to be a 10-15 year ordeal, very expensive. Again, with the shift to the ASC, that is going to be a major tailwind for Zimmer Biomet. The third product in the knee category is Persona Revision. You were talking about revision in Europe, seeing market at the end of 2024. That is a major category both in the U.S. and in Europe. In Europe, the market is about $500,000,000 and growing upper single digit. Here, the market is near $2 billion. Revision cases carry 7X. I'll say that again, 7X the ASP of primary cases. We have a 51% market share here in the U.S., not committing to the same market share in Europe. Yes, we're committing to get to a leading position in revision cases in Europe. The fourth knee product as part of the Magnificent Seven is Persona IQ, the shorter stem, the 30 millimeters. It's a shorter stem of this smart implant. As a reminder, we are the only company that has a smart implant in the world. We own 95% of the IP in the space. A sensor in the tibia component that is creating or bringing objective data to a subjective procedure. How is your walking post-surgery? Do you have the right gait? Are you doing the right level of activity? Potentially, is there a risk of dislocation? Dislocation equals infection and plenty of other things. Those are the four key products that we pay attention in knees. In hips is Z1, what we call our triple taper stem. Really excited, really excited about this one. Out of the gate in 2025 is above our expectations. This enables Zimmer Biomet to compete in the direct anterior category, which is roughly 40-50% of all the cases. Again, one category where we're not participating. Part of the reason why we lost market share at the tune of 300-500 basis points. Surgical impactors to drive efficiency in the case, HAMMR. The seventh and final product is a category. It's navigation. I alluded to this earlier. We don't do just robotics. We got navigation, we got mixed reality, and we got large footprint and small footprint robotics. That's the portfolio. I know that's the longest answer you got in all week, but I think that saves time in future questions. That's a great answer. Let's talk about the portfolio for, you know, exciting news and acquisition announcer on Paragon 28. As you said, you know, teens grower, mid-teens grower. Maybe talk a little bit about sort of where you are in the integration process. I mean, I have to ask the question, I think I may have asked it on the call, is, you know, the musculoskeletal, you know, sales rep, sales force kind of integrations have been challenging. I'd say Zimmer Biomet for, you know, putting aside some of the operational problems that happened after that migration, I think went extremely well. Maybe talk a little bit about how you plan to bring that force on and keep them running on all cylinders. Yeah. First of all, I don't think the integration of Zimmer and Biomet went well. It's been very nice. I actually think that integration was a disaster and set us back a few years. That said, we're not going to repeat the same mistakes. Right. We are going to treat this, or we are going to treat this with a lot of rigor. We announced Paragon 28 on January the 28th. A cool number for a cool deal. Over the last five, six weeks, I've been directly involved in the integration. While I'm not running the integration, Suky and I are micromanaging the hell out of this integration every day. There are three things we got to protect: the commercial channel. We already announced to the 250 reps in the U.S. that they are going to be our channel. We don't have a channel here at Zimmer Biomet. Lots of excitement. I was at their sales meeting. They're already guaranteed to be part of the company. No changes there. Done on that one. The commercial leadership is already retained. From the CEO, Albert Acosta, to the Chief Commercial Officer, to the leadership at the commercial level. I was with them this week in San Diego. They already are part of the company. That has been announced. The second thing we are protecting is innovation. We are keeping the design center in Denver, Colorado. They have something like 50 different products coming over the strat plan period across all six key categories. We are going to maintain that. Operationally, the things that we need to adjust, we will. We are going to allow them to run the show. We bought a company, we are buying a company that is doing close to $300 million growing in the upper teens in a market that is growing 6-8%. We will not screw that up. Okay. Yeah. That is a clear difference between your core business, some of your core markets and foot and ankle is just the volume of implants, the types of procedures, and sort of like the intensity of new product launch and new product introduction. I think you can see the value of bringing on an engine that's demonstrated its ability to. It's a huge opportunity. Right. Maybe pivoting a little bit into margins. Maybe, you know, talk about, Suky, if you could, sort of like puts and takes to some of the investments that you're making, including around Paragon, and then some of the leverage that you expect to see coming out of this year and going forward, both on the, say, the gross margin and the operating line. Yeah. Thanks, Matt. The first thing I would say is if you just zoom out a bit, you know, we've got very healthy, in fact, class-leading gross margin as well as operating margins. We've just delivered our fourth straight year of operating margin expansion, even in a pretty tough environment there for 2022 and 2023 with a lot of inflation to overcome. Having said that, the team responded incredibly well. The key building blocks there are, you know, revenue growth in a mid-single digit. You just take our natural flow through. That provides a pretty healthy level of margin expansion just in and of itself. Stabilized gross margins, even while input costs continue to go up, maybe not at the same levels of 2022 and 2023, but there's still inflationary pressures there. We're able to hold gross margins largely because we're doing much better in price, but also we're driving a lot more efficiency now that we've moved beyond remediation of quality and building excess capacity, which needed to be done. Within operating margins, with SG&A, we continue to find areas of opportunity. We currently travel at about 42-43% of OPEX and SG&A. We still consider it to be a target-rich environment. Those are the building blocks that have delivered the last four years. They're the building blocks that are going to deliver 2025. We've made a commitment of at least 30 basis points on average of operating margin expansion organically over our LRP. We're very confident in that profile. What's great about Paragon 28 is, yes, it's going to be dilutive in the near term, but we love the fact that it's a very fast-growing platform in a very healthy end market. At the end of the day, you know this, everyone out here knows this, that revenue is your best path to earnings power and margin expansion. That's great. It's got an accretive gross margin. It's not going to be significant on the consolidated level, just given the size, but it's great to have an asset that you're bringing in that has better margins than your company average. From an operating margin perspective, we're going to continue to invest. That is why we're saying it's going to be dilutive for the first year, break even by the end of the second year, because what we do not want to do is starve that business when it's performing so well, introducing so much great innovation into the marketplace. We are going to invest there. Not only are we investing in Paragon 28, to your point, I think what you're seeing is very obvious. We're investing against our base business. You see that in DTP. Really improving awareness, which Ivan has brought to the organization over the last 18 to 24 months, has been paying dividends. We're specializing our sales forces, right? We do not have hip and knee sales reps now, you know, sort of part-timing sports and extremities. We're individualizing and specializing in those channels. That is another big area of focus for us. We're making, you know, I wouldn't even say incremental. I think we're making bold investments in a number of areas. That's being fed from some of the areas that Ivan talked about, which we're deprioritizing. Doesn't mean they're not important. They just have a different role to play in the company than what they used to. We take investment from there, put them into the areas that have stronger market growth, better margin opportunities. So far, it's been playing out. I feel bullish on it. That's great. And sort of, you know, getting through the, you know, integration, you know, the break even and then accretion of Paragon 28 is one thing kind of on the core U.S. business. Maybe if you could talk a little bit about the opportunity you see to expand this globally, given your global footprint. Paragon 28, I think it's a huge opportunity. They focused on the U.S. being a new company, you know, sort of early in their commercial scaling, which is apparent and probably the right decision, which gives us plenty of opportunity to bring those products and leverage our existing infrastructure. We're excited about that. Okay. Similar and maybe untapped opportunity to bring this overseas. Yeah. Which, by the way, we did not use a large level of revenue synergies to sort of validate the deal. I think those potentially could be a source of upside for us. Right. Like a stage two opportunity maybe for. Well said. Got it. All right. And then you mentioned, I have to ask about the rest of the portfolio. You made some changes since, you know, since, you know, not under your watch necessarily, but there have been changes to the portfolio. Any further changes on the, you know, we'd love to talk about the positive side. You just announced the deal. You're going to be in the middle of integrating the deal. One question is, you know, is when should we see, you know, expect you to be out there again and active acquisitively? As importantly, you know, how do you feel about the rest of the portfolio? On the core portfolio, we've never been in a better position. We had gaps in recon. I'm not going to repeat myself. All those gaps are filled. On S.E.T., out of the six categories, four are going to be growing very strongly, upper single digit, double digit. One is going to do trauma what it needs to do. The other one, I do think it's going to get accelerated. That's a $2.5 billion business S.E.T. now, growing double digit with just a very nice opportunity to continue to grow. On technology, we had everything that we need. We launched in three indications. The core base is strong. Inorganically, we're always going to be looking at deals that make sense. Deals like Paragon 28 make a lot of sense. You know, buying $300 million that is growing at a mid-teen rate that within two years you can absorb the EPS dilution that creates a platform. Those kinds of deals we're going to continue to look. We're going to focus on integrating Paragon 28 before we start looking at other opportunities. Yeah, we see a path to continue to grow our WAMGR from 4% today to 5%. That is going to take some organic stuff that we're doing and some responsible inorganic strategies. That's great. We're coming up on time with the 40 minutes, 40 seconds or so that we have remaining. Ivan, like what would you like to wrap this up or leave with investors that you think is important? In 29 seconds, wow. I speak fast, but I don't speak that fast. I'm going to attempt to just say that summarizing, the markets are very strong. No, this is not backlog. This is not a one-time short-term centric event. Internally, Zimmer Biomet is in a totally different position than we've been even a year ago. But even in the tough times like last year, we did deliver our guidance of close to 5% revenue growth with leverage EPS and nice growth on free cash flow. As we enter 2025, we're very confident that we're going to do even better than that. That's two seconds left. Fair enough. Thanks so much. We'll leave it there. Thank you for having us. Thanks, Matt. Really pleased to have you. Thanks, Matt.