Good morning, ladies and gentlemen, and welcome to the Zimmer Biomet Q1 2025 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, 5 May 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. Good morning, everyone. Welcome to Zimmer Biomet's Q1 2025 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 all these risks and uncertainties, in addition to the inherent limitations of such forward-looking statements, please refer to our SEC filings. Please note, we assume no obligation to update these forward-looking statements, even if actual results or future expectations change materially. Additionally, the discussions on this call will include certain non-GAAP financial measures, some of which are forward-looking non-GAAP financial measures. Reconciliation on these measures to the most directly comparable GAAP financial measures and an explanation of our basis for calculating these measures is included within our Q1 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 gratitude to the over 17,000 Zimmer Biomet team members who move our business and mission forward every day. Thank you for your tireless work, your strong performance, and most importantly, thank you for your commitment to serving our customers and our patients. As I always say, the Zimmer Biomet workforce and the culture that we have truly is one of our key competitive advantages. During my prepared remarks this morning, I'm going to cover four things. First, the Q1 results of 2025. Secondly, our drivers of performance for 2025 and beyond. Thirdly, the usual update on our three strategic priorities. Then I'll close with an update on the recently completed Paragon 28 acquisition. After this, Suky is going to cover our financials in more detail. I will make sure to leave plenty of time for questions at the end of the prepared remarks. To begin, we grew Q1 sales 2.3% constant currency, with standout results in U.S. Hips, which were up nearly 4%, and mid-single-digit growth in SET This performance was against the backdrop of one less selling day in the quarter, which, as we mentioned in the past, represented a meaningful headwind. The US Hips performance highlights the opportunity with our Magnificent Seven product cycle and the impact that these products will have in accelerating our position as the global leader in Hips and Knees. Specifically in the U.S., the combination of Z1, or triple taper Hips stem for direct anterior procedures, HAMMR, or surgical impactor, and OrthoGrid, or AI-driven surgical guidance system for total hip replacements, has put us on the offensive once again. Notably, roughly half of Z1 users in the U.S. are conversions from competitive accounts, a trend that we expect to continue. In U.S. Knees, we expect Persona OsseoTi, or cementless knee, and the Oxford Partial Cementless Knee to drive accelerating growth throughout 2025. We have now passed 25% penetration with cementless knees in the U.S. and expect that trend to accelerate now that we have performed widespread customer and sales rep training and have ample supply to drive increased penetration. Similarly, the European launch of Persona Revision, the leading revision knee implant in the U.S., should continue to gain traction throughout the year. Looking at 2025, we are maintaining our full-year organic constant currency revenue growth expectations of 3% to 5%, which excludes contribution from the Paragon 28 acquisition. We anticipate Paragon 28 to contribute 270 basis points to sales growth in 2025. We are updating our 2025 adjusted EPS guidance to $7.90 to $8.10 from the previous $8.15 to $8.35, which contemplates, first, the impact from tariffs being fully offset, primarily by the weakening of the US dollar, shifts in discretionary spending, and other operational strategies that our team is undertaking. Secondly, modest dilution of less than 3% from the Paragon 28 acquisition, as was previously mentioned. Suky is going to provide more detailed guidance in his prepared remarks. As we progress throughout 2025, our priorities have not changed. We're going to continue to over-index on people and culture, operational excellence, and innovation and diversification. 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, at the senior leadership level of the organization, we recently added two new leaders to take over the key functions of strategy, innovation, and business development, as well as communications. In addition to that, we have also hired new commercial leaders in key countries in Asia-Pacific, have made changes in US general management in key geographies, and have hired strong capabilities in pricing. As we move towards the end of the year, we plan to make additional changes in the US, knowing that we got to do better, ensuring that every territory is led by a strong player who's solidly focused on driving Zimmer Biomet's performance in the assigned geography. Secondly, in alignment with our strategic priority of operational excellence, we remain committed to elevating our performance in the very critical US market, and to that end, are making changes to optimize our US sales channel. We're going to continue to specialize our S.E.T., S.E.T., Field Team to ensure that we're capitalizing on the high growth opportunity that this market represents while bolstering our leadership position in the ASC through expanded product offerings and capabilities, and are also meaningfully expanding our robotic platforms through innovation and committing additional commercial resources. As a reminder, all of these changes are contemplated within the given guidance range for the year from both a revenue and EPS standpoint. In addition to driving sales growth, we continue to prioritize margin improvement while also reducing inventory needs. That way, we can increase our free cash flow generation. We like what we are seeing when it comes to DOH, Days on Hand, and the reduction that we've seen in DOH, and expect to move from around 370 days today to a much lower number in the quarter years to come. As a reminder, our DOH number was north of 400 early in 2024. In our third priority of innovation and diversification, now that we have no gaps left in our core portfolio after the introduction of the Magnificent Seven products, we are now refocusing our innovation efforts in addressing unmet needs within musculoskeletal health and adjacent areas. Four key problems that we're going to solve for. Number one is awareness. Less than 5% of patients address their osteoarthritis. To empower patients to seek treatment, we're executing a bold direct-to-patient program in partnership with our Chief Movement Officer, Arnold Schwarzenegger. During the Q1 of 2025, we launched our new You'll Be Back campaign, and we continue to partner with key societies to educate patients around the world about joint replacement, while also expanding our digital marketing program in key geographies and territories. The second problem we're trying to solve is safety. Very prosthetic joint infections, or PJIs, occur in roughly 1%-2% of primary cases, and around 4%-5% are revision joint replacement procedures and can be devastating. As a matter of fact, mortality rates, once you do get these PJIs, can be higher than some cancers. We're committed to addressing this unmet need through technology, such as iodine surface-treated implants, to prevent bacterial colonization and biofilm formation. Excited to be launching the first iodine surface-treated hip stem in Japan later this year, and at some point, it'll come to the US, where the opportunity is pretty large. Beyond iodine surface devices, we're investing in technology that aims to drive faster surgeries to reduce exposure to infection while in the operating room. Our OneTeam acquisition, executed late 2024, is an example of this strategy. The third key area where we're going to focus our innovation efforts is around efficiency. One aim of our innovation engine is to lessen the burden of care for all key stakeholders. By capturing patient data with smart implants, making a CT scan an option for robotic implants with our platform, ROSA, and by reducing surgical times through utilizing AI technologies such as OrthoGrip, we target to improve the quality of life for patients, reduce the cost of care for payers, and provide doctors more time to perform other surgeries. We believe we can be faster and smarter when it comes to the episode of treatment for the multiple patients that can benefit from our devices. The fourth key area where we are focusing our innovation efforts is around outcomes. We strive to continually improve patient satisfaction. With the recent PMA approval of the Oxford Partial Cementless Knee, patients in the United States now have access to a partial knee backed by robust clinical data. Data on nearly 15,000 patients from the National Joint Registry for the U.K. demonstrated 93% survivorship at 10 years. This is a statistically significant improvement over the 90% with cemented partial implants. We have now trained several hundred customers on Oxford Partial Cementless and expect robust adoption as we exit 2025. In addition to internally developed solutions, we will also look to address these needs through inorganic opportunities that feed our strategic, financial, and risk-return metrics. We do remain committed to our aspiration of achieving a 5% WAMGR weighted average market growth rate environment by the end of 2027. As a reminder, today's WAMGR here at Zimmer Biomet is around 4%-4.25%. We have built best-in-class integration capabilities at Zimmer Biomet and are ready to take on the right opportunities at the right time. Speaking of successful integrations, I want to end today discussing the closing and integration of the Paragon 28 acquisition. As of April 21, Paragon 28 is now part of the Zimmer Biomet family, and we're very proud of this achievement. This successful integration of the acquisition has been and will continue to be a top priority, and I'm very happy to report that Paragon 28's Chairman and CEO, Albert DaCosta, as well as his entire senior commercial leadership team, have now joined the Zimmer Biomet family. Albert and the team have created a highly energetic, entrepreneurial, and committed culture, which we intend to preserve here at Zimmer Biomet. I could not be more excited to have the Paragon 28 team on board. I love what they bring to Zimmer Biomet, and I look forward to the ongoing journey. In addition to adding the senior leadership of Paragon 28, the entire US sales channel of Paragon 28 has now signed up for the Zimmer Biomet journey, creating minimal disruption to the success that they have achieved over so many years. In conclusion, we are very proud of the progress in our organization, and we look forward to continuing to execute and build momentum as we move throughout the year. 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. I will now turn the call over to Suky. Thank you very much. Thanks, and good morning, everyone. As Ivan mentioned, we closed a solid quarter that demonstrated the early impact of our new product cycle. Despite the selling-day headwind, we grew sales 2.3% on a constant currency basis, delivered adjusted earnings per share of $1.81, and generated $279 million in free cash flow. Looking at this quarter's results, unless otherwise noted, my statements will be about the Q1 of 2025 and how it compares to the same period in 2024, and my commentary will be on a constant currency and adjusted operating basis. 2025 organic constant currency guidance commentary will exclude any projected impact of the recently closed Paragon 28 acquisition. Net sales were $1,909 million, an increase of 1.1% on a reported basis and 2.3% excluding the impact of foreign currency. Consolidated pricing was 10 basis points positive, marking the fifth consecutive quarter of positive pricing. Our US business grew 1.3%, driven by nearly 4% growth in both hips and S.E.T. As Ivan mentioned, we continue to make changes to bolster our US performance. This includes new leadership in key geographies, sales rep specialization, expanding our ASC offerings, and committing additional commercial resources in robotics. Internationally, we grew 3.7%, driven by mid-single-digit growth in knees and high single-digit growth in S.E.T. Our S.E.T. business continues to outpace knees and hips, and with the closing of the Paragon 28 transaction, it will now be larger than our hip business. This aligns with our strategy of diversifying into faster growth markets. Global hips grew 2.4%, with the US growing 3.7% and international growing 1%. We are particularly pleased with the US results given the selling-day headwind. As Ivan mentioned, our US performance was driven by the combination of Z1, Hammer, and OrthoGrid. The Z1 launch has exceeded our expectations, and we have seen rapid uptake from both existing customers and competitive accounts. Global knees grew 1.9% in the quarter, with U.S. growing 0.2% and international growing 4.2%. We continue to anticipate an acceleration in U.S. knees throughout 2025, driven by increased penetration of our Persona OsseoTi Cementless Knee and the full launch of our Oxford Partial Cementless Knee. Next, our S.E.T. segment grew by 4.9%, led by CMF and Sports, growing in the low teens and high single digits, respectively. This marks the sixth consecutive quarter of at least mid-single-digit growth in S.E.T., a trend we expect to continue. Finally, technology and data, bone cement and surgical declined 3.5% due to tough comps from the prior year and a mixture towards ROSA volume-based placements versus outright sales. Turning to our P&L, we reported GAAP-diluted earnings per share of $0.91 compared to GAAP-diluted earnings per share of $0.84 in the prior year. This increase was driven by higher sales and lower restructuring charges. On an adjusted basis, we delivered diluted earnings per share of $1.81 compared to $1.94 in the prior year. As previously guided, earnings were down due to higher COGS capitalization from 2024, higher upfront investments for new product introductions, higher interest expense, and an FX headwind of about $0.03. Adjusted gross margin was 71.5%, and adjusted operating margin was 26.2%, both lower than the prior year, but in line with expectation. Adjusted net interest and non-operating expenses were $59 million, above the prior year, driven by higher debt and higher interest rates on refinanced debt that matured in 2024. Our adjusted tax rate was 18.2%, and fully diluted shares outstanding were 199.7 million, down year over year due to the share repurchases, of which we executed another $230 million during the quarter. Turning to cash and liquidity, we had another strong quarter of cash generation, with operating cash flows of $383 million and free cash flow of $279 million, representing robust growth versus the prior year. Our working capital initiatives targeted towards inventory reduction continue to pay off as we reduce days on hand by almost 47 days compared to Q1 2024, ending at approximately 370 days of inventory on hand. We ended the quarter with approximately $1.4 billion of cash and cash equivalents, which includes the proceeds from debt issuance to support the acquisition of Paragon 28. Regarding our outlook for 2025, there are a number of moving parts that impact our guidance. First, at recent rates, FX is now expected to be a tailwind to our full-year outlook. Additionally, we incorporate our initial estimate on the negative impact of global tariffs, as well as the closing of the Paragon 28 transaction into our guidance. When accounting for these changes, we now expect 2025 reported sales growth of 5.7%-8.2%, EPS of $7.90-$8.10, and free cash flow of $750 million-$850 million. On revenue, we are reiterating our 2025 organic constant currency revenue growth of 3%-5%. Inside of this, we expect average selling prices to be roughly flat for the full year and selling-day differences to be a modest headwind to growth. With the recent weakening of the dollar, at current rates, we anticipate FX to be flat to a 50 basis point tailwind in 2025, an improvement from our prior guide. On Paragon 28, we anticipate the acquisition to contribute about 270 basis points to growth in 2025, resulting in consolidated reported revenue growth expectations of 5.7%-8.2%. Regarding the cadence of expected revenue results, we continue to anticipate that second-half organic constant currency growth will be higher than the first half due to more favorable comps related to the 2024 ERP challenges, new product uptake, and no selling-day impact. We expect Q2 organic constant currency growth to be slightly higher than the Q1 constant currency growth, which incorporates tougher year-over-year comps, a shift of orders from the Q2 into the second half in certain emerging markets inside of EMEA, and continued optimization of the US channel. Now, addressing tariffs, let's just say that the situation remains fluid. Based on current administration proposals, we anticipate a $60-$80 million headwind to operating profit in 2025, with the majority of the impact in the second half of the year. This estimate contemplates our latest view of mitigation efforts currently underway and that the announced European reciprocal tariffs will go into effect after the 90-day stay period. I will note that our 2025 impact should not be used as a run rate for 2026 due to a variety of factors and that our estimate around the impact of tariffs in 2025 could change as the macro environment continues to unfold. Given tariffs and the Paragon 28 acquisition, we now anticipate full-year adjusted operating margins to be down approximately 100-150 basis points versus 2024, with second-half adjusted operating margins up slightly from the first half and the Q4 still having the highest adjusted operating margin. Adjusted net interest and other non-operating expenses are expected to be approximately $305 million, reflecting borrowings for the Paragon 28 acquisition and higher interest rates on refinanced debt. We continue to expect our adjusted tax rate to be approximately 18% for the full year and fully diluted shares outstanding to be approximately 200 million. We project the 2025 tariff headwind to be offset primarily by a combination of the weakening US dollar and corresponding FX tailwind, a decrease in discretionary spending, and other operational strategies. Given these dynamics and factoring in the dilution from the Paragon 28 acquisition, which is in line with our original expectations, our fully diluted adjusted earnings per share is expected to be $7.90-$8.10. We now anticipate 2025 free cash flow of $750 million-$850 million, down from $1.1 billion-$1.2 billion due to tariff-related headwinds and one-time costs associated with the recently closed Paragon 28 acquisition. This reduction in free cash flow is projected to be roughly 50/50 between tariffs and the closing of the Paragon 28 deal, and again, the Paragon 28 impact should be one-time in nature. I would like to close by thanking the entire ZB team for their continued hard work and dedication. We continue to make meaningful positive changes across the business and continue to invest to accelerate long-term growth while navigating an uncertain environment. With that, I'll turn the call back over to David. Thank you, Suky. Operator, let's open 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. We'll take our first question from Robbie Marcus with JP Morgan. Oh, great. Good morning and congrats on the good quarter. I want to start on the topic du jour of tariffs. I would say that's a much smaller impact than most were expecting on EPS. Maybe, Suky, if you don't mind walking through what the mitigation efforts are, how you're offsetting the tariff headwind, and you made the comment about the 2025 run rate is not a good exit trajectory to calculate 26 tariffs. Maybe you could just expand on that and help us understand what the right run rate is. Thanks a lot. Yeah. Good morning, Robbie. Thanks for the question. Yes, it is the topic du jour, isn't it, this season? I would say that we, first of all, going back to some of our earlier comments from the beginning of the year, recall that the majority of our production and manufacturing is actually done in the United States, and that's been the case for quite some time for Zimmer Biomet. That overall lowers our exposure some bit. We have already taken some early steps to mitigate the impact of tariffs. A couple of the big ones are optimizing our view of country of origin as well as transfer pricing. Secondly, we've made adjustments to our sourcing through our dual sourcing and redundant sourcing where it makes sense. Thirdly, we've moderated some of our discretionary spend in areas that don't really impact near-term or long-term revenue growth. Those are some of the levers that we're pulling to overall lower our impact. As we said in our scripted remarks, we expect that to be the impact of tariffs this year to be somewhere between $60 to 80 million. The impact in Q2 is going to be quite small, less than $5 million. A little over half of the impact will be in Q4. I think that gives you a good view into the cadence of how the tariffs are expected to impact gross margin and operating margins and overall profit for this year. As we move into 2026, I'd say it's difficult to predict exactly where tariffs will end up. There are a lot of moving parts. As you know, the impact on our COGS gets capitalized and will roll into future periods through inventory. That's a potential headwind. Other headwinds could be you obviously have the annualization next year of the full year of tariffs versus a partial year this year. We are also assuming that the 90-day stay period expires in early July, which would be a headwind into next year because you would not have that 90-day pause. There are some tailwinds, however, as we think about 2026. The first being is we are going to continue to look at potential sourcing changes to continue to lower that overall number, potentially some portfolio optimization, exchanging portfolio opportunities across knee, hip, and set where it makes sense. Of course, we are going to always, as we have done, look at potential discretionary savings, discretionary spending savings, I should say, to help offset tariffs. While 2026 is still a moving target, overall, you could expect it to be higher because of those tailwinds than what we're seeing in 2025. I will say I'm very happy with how the team has reacted even before the tariffs were put in place to start to plan to get us in position to optimize things. Overall, we do see it as a manageable headwind to this year. As you'll see from our guidance, excluding the impact of Paragon 28, which is right in line with expectation, we are fully offsetting the tariff impact. Thank you. We'll take our next question from David Roman with Goldman Sachs. Good morning, and thank you for taking the question. I'm struggling a little bit to put some of the moving parts together in the quarter and the outlook. Certainly appreciate that Q1 matched your expectation and was very consistent with what you presented in February. The absolute level of growth is still below what we saw last year and pretty much in most of the quarters before ERP disruption. At the same time, you're highlighting the positive impact of new products countered by what appears to be performance-related commercial leadership changes. How long should it take to digest all these variables, and what are you seeing specifically today that you can exit the year above 5% growth to get to the midpoint of the guidance you're issuing for organic revenue? David, thanks for the question and good morning. Let's maybe unpack this part by part or piece by piece. I'll start, and Suky, by all means, feel free to add. Starting with Q1, if you add to Q1 the 2.3% constant currency, if you add the impact of the one day less in Q1 of 2025 versus 2024, that number is between 3.5%-4%. So close to that midline or that mid-single-digit growth commitment. Q2, we do have some timing events in EMEA, that some orders that are getting later in the year. We do have the most difficult comp versus Q2 of 2024. Recall that Q2 of 2024, we grew 5.6% XFX, so near 6%. We do have still some new products that are not in full launch mode. The second half of 2025 is mid-single-digit growth based on comps to your point on the ERP debacle that we had in 2024, and just a lot of new products happening in the second half. We're going to see Oxford Partial Cementless Knee listed here in the US at full speed. We got Persona Revision in Europe at full speed. We got many launches happening in the S.E.T. category in the second half. We do have Persona OsseoTi at that point, probably close to 30% penetration here in the US. There is a lot happening in the second half of 2025 when it comes to new products. We feel extremely confident that those new product introductions are going to materialize. We're tracking the number of product trainings that we do. We are weekly tracking supply chain dynamics, making sure we have the right amount of sets in the market. We're tracking our contracting capabilities, making sure that these new product introductions are going to happen. Net-net, we are extremely confident that new product execution, new product launch execution is going to materialize. When you look at that, and again, in the backdrop of easier comps, we feel very confident that our current guidance of 0.5% is going to get executed upon. Hopefully, a quarter from now, we're talking about a higher commitment in terms of where we fall within that guidance. Suky, anything to add? I think that's well summarized. Thanks, David. We'll take our next question from Chris Pasquale with Nephron. Thanks. Yvonne, you highlighted a nice performance in US HIPS, which was certainly encouraging. Just wanted to clarify. When you say that 50% of Z1 users today have been competitive accounts, are those true new-to-Zimmer surgeons, or does that include surgeons who were maybe already customers on the knee side? Just to put a finer point on that second-half growth driver list you just ran through, should we expect to see the impact from new products on the knee side start to come through as soon as Q3, or is it going to be later than that? Thanks. Thanks, Chris. I'll start with the second question. I do believe we're going to see some of the uptick of new products in knees within Q2 here in the U.S. I don't think we need to wait to see Q3, or I don't think we need to wait until Q3. However, obviously, given the quantity of new products in the second half, it's going to be higher in the second half. You should expect to see some knee growth momentum in the U.S. within Q2. Early in the quarter, we're already seeing that. Relative to your first question on HIPS, these are true new customers. There might have been some customers that we lost years ago, but yes, 50% of the growth in the US in HIPS, that's 3.7%, is true new conversions, customers that are not users of HIPS for Zimmer Biomet. We expect that the number to continue to grow as we get into Q2 all the way through Q4 of 2025. Thank you. We'll take our next question from Matthew O'Brien with Piper Sandler. Morning. Thanks for taking the question. I want to ask a little bit about pricing. Excuse me. The last four quarters of pricing have been up 80 basis points, 70, 60, and now up 10 basis points. I'm just wondering if that plus 10 is off of flat Q1 of 2024. Are we to the point now where the tailwinds we're seeing on the pricing side are largely behind us? Are we going to start to see that roll over and get negative like we've seen historically? I guess with all these new products coming out that are higher priced than this ASP tailwind you should be getting, is it going to make it more difficult to really sell those products in an environment where pricing starts to get a little bit tougher? Thanks. Yeah. Matthew, thank you for the question. This is Suky. First, I'd start with we entered the year with the guidance assumption that pricing would be flat to down 50 basis points. Delivering on the Q1 at positive 10% is a little bit better than what we originally expected. Therefore, we're improving our outlook on overall pricing to be flat for this year. I would say as compared to 2024, you're right, the number has stepped down, but that's something we anticipated, as I said, with our initial guide. Remember, we talked extensively about in 2024, a number of sort of one-time items outside of the U.S. that were creating a much more favorable pricing environment, which we did not expect to repeat in 2025 and beyond. You're seeing that play out. As we move forward, again, the majority of our business is contracted, so we have good visibility into how we expect pricing to operate or perform for the rest of this year. That gives us confidence in that outlook of being about flat. As we move forward, we continue to see the pricing environment be relatively stable compared to our historical norms. That is really one, you are seeing really good pricing out of our new products and that pricing hold. Two, I think you are seeing much better competitive sort of response to overall pricing. Third, just internally from a capabilities and governance standpoint, we are a much better company when it comes to price than we have been, in fact, even incenting to ensure that the field force operates with a strong sense of margin in addition to revenue growth. Those are all the factors that give us confidence that pricing is stable, at least in the near term. Relative to tariffs, I think it is too early to call at this point. We are closely monitoring input costs. We are closely monitoring third-party contract manufacturing costs. I've not seen anything out of the ordinary on either one of those fronts. We are looking ourselves at potential opportunistic price increases across our portfolio. I would not count on that as a major offset to overall tariffs, but we're going to be opportunistic where we see a light there. That is our view on pricing. Just to bring it back, we're doing a little bit better than our original guide for 2025. Thank you. We'll go next to Matt Taylor with Jefferies. Hi. Thank you for taking the question. I did want to just follow up on the tariffs and clarify when you said the $60 to 80 million headwind for 2025 includes some mitigation. I guess I just wanted to ask if you could give us about what the headwind would have been without mitigation and maybe just talk through some of the main sources of this headwind so we can understand, assuming things continue to change, how your exposure may continue to change with the policies around different geographies. Yeah, Matt. Thanks for the question. Again, the mitigations have really been around, again, optimizing across our portfolio for country of origin, which is the key driver that determines tariffs in addition to transfer pricing. Actually, where you produce is directly indicative of overall tariffs, but it does come down to country of origin and transfer pricing. Our internal teams have done a really nice job of driving optimization there. Secondly, we've made changes in how we source product. China remains our largest exposure when it comes to tariffs. We have put a good bit of inventory into the country before the tariffs were enacted. Secondly, we're evaluating continuing to source from Europe as opposed to the United States where it makes sense. Those are some of the levers that we're pulling. Again, we're just looking for any opportunity we can to offset that. Relative to where the impact is, I'd say China is the largest impact. That's both products shipping into China as well as product coming out of China into the United States. As we see movements in policy there or tariffs, that could be a large driver of future changes on overall tariff profile for the company. Overall, I think we're pleased where we started. I think there's more work to be done relative to our ability to mitigate future tariffs. Thank you. We'll take our next question from Larry Biegelsen with Wells Fargo. Thank you for taking the question. Just, Suky, one clarification. Your commentary on 2026 was not clear on the net impact of the tariffs and the tailwinds you mentioned. Just for my question, Ivan, Stryker's recon growth, particularly its US knee growth, continues to be a lot higher than the other three competitors. We can all see that, obviously. We did a lot of channel checks around AAOS, and we continue to hear that the difference is really just still macro. How much do you think that is the case, and what are you doing to make ROSA more competitive? Talk about the three new modalities coming and the implications. Thank you. Sure, Larry. I'll start with that. I do not know if, Suky, you want to provide more clarity on 2026, although I think we said plenty around 2026 tariffs. We have to do better when it comes to knee performance in the U.S. Nobody here is pleased with 0.2% growth in the quarter. That said, none of us are surprised about the knee performance or the number in the quarter. We knew that there was going to be a phasing with knee's performance in the U.S., and we are very confident the second half is going to be better. Relative to ROSA, we have done 350,000 surgeries with ROSA since we launched. We are the number two player in the U.S. We continue to see acceleration of penetration quarter by quarter. A couple of weeks ago, we submitted our 510K submission. That is a 90-day approval submission for what we call ROSA Knee V15. We believe that's going to be a dramatic transformation of ROSA in itself. The value proposition of ROSA Knee V15 is going to enhance surgical accuracy and reproducibility by improving soft tissue laxity, a different user experience. The platform has the ability of doing a kinematic knee. It has a new auto balance procedure. It's faster. It's simpler. It's streamlined. We believe there's going to be an improvement on the current version of ROSA. On top of that, right after that, we're going to be submitting at some point for the CT scan ROSA platform, as well as down the road a different partial knee platform. As we continue to evolve ROSA, we also have partnerships with Think Surgical for those surgeons, and some of our competitors do like CT scanning. We have that optionality as well through our partnership with Think Surgical. Look, I do not think the robot is the main reason or why we are behind when it comes to knee performance in the U.S. It has to do with the fact that we have the largest share and the fact that we got to do better when it comes to commercial execution, and we are going to improve upon that. As I mentioned in my earlier answer, I do think already within Q2, you are going to start to see some improvement in U.S. knees. As we get into the second half of 2025, I think you are going to see acceleration when it comes to U.S. knees. Yeah. Larry, thanks for the question. I will go back to some of my earlier comments and maybe try and rephrase them. I did say that 2025 should not be used as a run rate for 2026 and that you should expect 2026 tariff impact to be higher than 2025. Now, we're not ready to size that at this time because there are a number of puts and calls and uncertainties that would prevent us from sizing that with precision at this point. There are some headwinds and tailwinds to help shape that discussion. From a headwind perspective, first, you're going to have annualization, right? You only had tariffs for part of the year this year. Assuming you have for a full 12 months next year, that would be a headwind. Secondly, like most companies, the tariffs impact cost of goods. That gets inventoried at some level and then capitalized and rolled into the P&L in future periods. That would be a headwind as we moved into 2026. The third element is we're assuming that the retaliatory tariffs go back in place once the 90-day pause period ends in July of this year. Assuming that that pause period doesn't happen in 2026, that could also be a potential headwind. Again, the environment is fluid, but we're giving you what we know based on the most recent assumptions and announcements from the administration. From a tailwind perspective, we're going to continue to look at sourcing changes that could minimize or improve the tariff impact. Secondly, we're going to look at portfolio optimization. Certain products, for example, in our knee portfolio are sourced from different locations. We may choose to emphasize one product versus another one based on tariff profile. The third one is we're going to constantly, as we've always done, look at discretionary spending to potentially offset tariffs. Again, we're not ready to size 2026. I don't think any company has been out there sizing 2026. What we did want to do is give you some of the headwinds, tailwinds that could shape that profile for next year. Thank you. We'll take our next question from Josh Jennings with TD Cowen. Hi. Good morning. Thanks for the question. Ivan, I was hoping your team could help us think through ZB's performance in the ASC versus the hospital channel. Should we be thinking that S.E.T. and joints are performing kind of relatively similar in those two channels, or is ZB outperforming in one versus the other? Just wanted to get a handle on that as this ASC migration is taking a bigger interest. Thanks a lot. Hey, thanks a lot, Josh, and good morning. Roughly today, I would say 20%, if not slightly above 20%, of our sales here in the U.S. come from the ASC environment. It used to be somewhere around 2-4% prior to COVID, so definitely there's been a shift. We continue to believe that that number is going to grow. The data that we are triangulating shows that between 40-60% of sales in the next five years are going to come from an ASC environment. We like that trend. With With the introduction of the Magnificent Seven and some of the acquisitions we've done in S.E.T., Paragon 28, but before that, acquisitions in sports medicine, we believe we are well-positioned to continue to grow above market in that ASC space. In terms of what are we doing better? We historically have been and are the number one reconstructed company in the ASC space for knees and hips. We have done better, but we are growing now at a faster pace in S.E.T. Notice in the quarter, we grew globally S.E.T. 5%. It is the Q6 in a row that we are growing S.E.T. that meets single digit or above. Frankly, that number could have been higher in the quarter, but we had to deal with some one-time events in the sports medicine business in the U.S. Growing at a nice clip at a faster pace in S.E.T., and we believe that is going to accelerate as we exit the year. Thanks for the question. Thank you. We will go next to Travis Steed with Bank of America. Hey, thanks for taking the question. I wanted to ask about Q2. The slightly higher comment, was that higher than the 2.3% constant currency or days adjusted? And then any quantification on the shift of orders from Q2 into the second half, is that worth 50 basis points or more or less? Yeah, it's off of the constant currency number, the 2.3% number we posted in the Q1. And we're not sizing the overall impact for those orders. We're not really giving quarterly guidance, but we just wanted to give some directional shaping for your models. Thank you. We'll take our next question from Joanne Wuensch with Citi. Good morning, and thank you for taking the question. Your other category was relabeled technology, data, bone cement, and surgical. I'm always curious when people change the name of things. I'm curious why you chose to do that and how do we think about those bits and pieces. Is this an area also for when you talk about portfolio optimization or M&A? Thank you. Hey, good morning, Joanne. Thank you. Hey, we like the new name better than the other name, pun intended. It used to be called other. And we have in there bone cement, we have surgical, and then we have enabling technologies. And enabling technology is one of the fastest-growing businesses at Zimmer Biomet. To bucket that into the category of other is probably not appropriate. That is the reason why we changed the nomenclature on the category. Our other category, as you saw in the quarter, actually declined. That has to do with heavy comps versus Q1 of 2024. We grew that category around 10-12% in that quarter. Not much to read into that data point other than heavy comps. We continue to see robotic adoption being very, very high, but we're installing more units in the quarter than selling. A quarter ago, we had a lot of sales for ROSA, and this quarter, we had a lot of installs. That's the main reason why we're declining the quarter, and that's the rationale behind the nomenclature change. Thanks for the question. We'll go next to Caitlin Cronin with Canaccord Genuity. Hi. Thanks for taking the question. Just to touch on the Paragon 28 acquisition, I mean, any kind of early news there and kind of updates on the timeline for the integration? It's going—Caitlin, thank you for the question—it's going far better than expected. We had two or three goals at the onset of the journey. Goal number one was to retain the leadership team. Albert DaCosta, former Chairman and CEO of Paragon 28, their Chief Commercial Officer, Matt Jarboe, and the entire, again, commercial leadership team checked on that. All of them have signed with Zimmer Biomet. Goal number two was to have minimal disruption in the field close to the customer. They have around 250 sales reps that have been growing that business strongly in the teams. We wanted to make sure that we could sign every one of them and checked on that as well. All of them have transferred over to Zimmer Biomet. Goal number three was to preserve the innovation journey, the innovation platform. They have a lot of new product launches happening, and we're not disrupting any of them. We're going to keep the design center for Paragon 28 out there in Denver. We're not integrating their processes into Zimmer Biomet right out of the gate. We want to make sure that we're doing things quickly, safely by quickly. I will say A-plus on that as well. We closed the integration on April 21, great momentum early in the year, and we look forward to updating you as quarters go. This is a great acquisition, and so far, everything is going fantastic. Thank you. We'll go next to Richard Newitter with Truist Securities. Thanks for taking the question. Wanted to just ask, I thought I heard early in the prepared remarks something about a sales force reorganization or optimization. If you could just elaborate a little more on what exactly that is, what prompted it? It sounds like that's new. Is there any negative impact that's contemplated in—granted, you reiterated your constant currency guidance for the year. Is there anything that's implicitly contemplated from a headwind on that standpoint incrementally now? Thank you, Richard. First things first, start with the final part of your statement. No, we're not changing guidance. There is no impact whatsoever on either revenue or EPS associated with the evolution of the change. I want to emphasize that word, evolution. We've been doing this for a while. We're going to go faster at it. Why do we need to make changes in the US? You cannot grow the US knee business 0.2%. We're making changes. We're making changes in terms of some leaders. We're making changes in terms of the quantity of territories. We have made changes in terms of the incentive plan. As a result of the lack of growth, certain individuals would be exiting the organization fairly soon. We're just changing the whole dynamic in that regard when it comes to the US dynamic. We've been talking about specialization for a while. We need to have the right amount of people behind the right businesses. We believe we can grow faster in S.E.T. if we add additional capabilities. We're going to be deploying more people into S.E.T. We know we can do better in robotics if we add the right quantity and quality of individuals. That's another change we're making. The ASC, we're growing strongly in the teams, and we believe we can do better. We're going to add additional people in the ASC environment. Again, changes, making sure we have the right quantity and quality of leaders, changes around the incentive plan. I know this is not something that is new. We're just going faster at it because we deserve to grow at a faster pace in the US. Thank you. We'll take our next question from Shagun Singh with RBC. Great. Thank you so much. I was wondering if you can elaborate on your appetite for M&A post the Paragon 28 acquisition. More specifically, how are you thinking about further boosting your position in the ASCs and then also expanding potentially into new adjacencies maybe in and out of the hospital as you think about raising your weighted average market growth further beyond the mid-single digits? Thanks for the question and good morning. Even after doing Paragon 28 and in the backdrop of tariffs, the firepower is pretty strong here at Zimmer Biomet. We have a very strong balance sheet. Post Paragon 28, our leverage ratio is in the mid-threes. In a couple of quarters, given the strong cash flow generation of the company, it's going to go to the low-threes again. Prior to Paragon, it was in the low-twos. Again, there is plenty of ammunition to do a smart M&A. Deals that make strategic and financial sense, we're going to take a look at. Acquisitions similar to Paragon 28, where we can keep EPS dilution to within 3% on year one, neutral by the end of year two. We're going to do those deals. Deals that make sense, we know that we can integrate. We're going to look at them. It is going to be the number one recipient of our capital allocation strategy, and we're going to go at it. We have built best-in-class integration dynamics. We got the proper governance. We got a new head of business development with ample experience in this area. Yeah, we're going to be responsible at the right pace, but it will be the number one priority for Zimmer Biomet. In terms of areas that we like, it's a pretty repetitive speech. Yes, anything that happens in the ASC, we like. Anything that makes sense within S.E.T., we like. Faster growth categories within orthopedics, data technology, we like. We don't need to go outside of core musculoskeletal health for the time being, and at some point, we will. We want to be in a 5% WAMGR environment by the end of 2027. As we exit the decade, closer to 2030, that number needs to be higher. The appetite is high. We're going to be responsible, but we're going to go at it. Thanks for the question. We'll take our next question from Rick Wise with Stifel. Good morning. Hi, Ivan. I was hoping you would expand a little more on your progress with the Oxford Partial Cementless Knee. You sound excited. You've trained several hundred customers. My impression, if I remember correctly from AAOS, is that you hope to train maybe 1,000 by year-end. Are you on track with that? Talk about the training and interest. How long do you think it takes for the Oxford Partial Cementless Knee here in the U.S. to match the 60% of the mix in Europe? Thank you. Thanks for the question. This is one of the most exciting products that we're going to be launching for a while. As a reminder, it is the only PMA-approved partial cementless system in the U.S. I do think we're going to be north of the 1,000 trainees by the end of 2025. Already done close to 400. We've done training events in Dallas. We had around 250 people there. Chicago, we're going to be in Nashville coming up. I do think that number is going to be north of 1,000. You got to train for the product before you use the product, but it's not a lengthier deal. After you train, a couple of cases, you're good to go. We'll be north of 1,000. We are putting the product in many contracts. I think our contract penetration is around 50-55% today. That number is going to be around 70-80% as we enter into the second half of 2025. Again, I think this is going to be one of the most exciting product launches here at Zimmer Biomet. Thank you. We'll take our next question from Jeff Johnson with Baird. Thanks. Good morning, guys. Maybe two clarifying questions just so I could squeeze them into one if possible. Suky, you talked about opportunistic price increases. Just any kind of color you could provide there. I would assume that's probably more on the capital side maybe than on the implant side, but any clarification there? Just, again, not to go back to the 2026 tariff, but I'm going to. Just as I hear your kind of explanation, thinking about your inventory turns, you talk about greater than 50% of that $60 to 80 million in the Q4. If you were us on the sell side, we have to put models out. I know you're not quantifying. Would it be crazy to run kind of an absolute $40 million a quarter throughout 2026 as the tariff impact just as a starting point to have something as a holding place in our models? Thank you. Yeah. Let me start with the first question on the opportunistic pricing. I think it is going to be more in the capital area. Our recon business tends to be heavily contracted, so there's less near-term opportunity there. It is really areas where you do not have contracting, which is CapEx, surgical. Those are probably good surrogates for the areas where you can take better price. On the run rate, I would not use Q4 as a run rate moving into next year. Remember, our capitalization, while it is different product-by-product segment, we have about a year's worth of inventory, so it is going to take a bit longer for that run rate to manifest itself because by the time we get to Q4, you are only about a halfway, a little bit more than a halfway year through the tariffs. Thank you. Thank you. We will take our final question from Mike Matson with Needham & Company. Yeah. Thanks, Ivan. I wanted to ask about the antimicrobial technologies and the iodine coating. I mean, this seems like something that could potentially really differentiate Zimmer Biomet. I do not know if any of the other companies are really working on this stuff. Can you maybe just talk about what you are hearing from the FDA in terms of iodine coatings, what you are going to have to do to get that launched in the US? Are you willing to look at any kind of outside technologies in terms of acquiring or partnering with other companies? Thanks. Hey, thanks for the question, Mike. First things first, the approval of the iodine-treated hip that we launched in this year is outside of the US. This is in Japan. It will come in the US at some point. We'd rather not speculate here today, but we do have a pathway to get this into the US. It is going to be transformational. It is the only platform in the world that has data on preventing biofilm formation on the implant surface by eluting over a prolonged period of time. Tons of data in that regard on an implant that has stable fixation. We do deem this to be transformational. We're not doing just coated implants. We have technology that expedites surgeries. We have external investments in companies that are working on infection. As I mentioned, my prepared remark is one of the key four problems that we're trying to solve. It's more than coated devices. It's more than technology. It's a lot of different things, a lot of shots on goal when it comes to infection. Again, we will be launching iodine at the end of 2025 here in Japan outside of the U.S. We have a plan to get this into the U.S. as soon as we can. Thank you. 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. Hey, thanks, Katie. Thanks, everybody, for joining the call. I know there's a lot going on. I don't envy your jobs these days. If you allow me a minute, I'd like to recap the quarter and where Zimmer Biomet is today in five very simple bullet points. Number one, the markets remain strong. We continue to see that the waiting list for procedure, especially here in the U.S., is very long. As a matter of fact, that waiting list is in the top 10 institutions almost twice what it used to be prior to COVID. I know this is no backlog from COVID. Healthy markets is data point number one. Data point number two, we are today reaffirming our constant currency organic revenue guidance of 3-5%, which we feel extremely confident of achieving. On top of that, thanks to Paragon 28, we're going to bring an additional 270 basis points of revenue growth for the year. Again, keeping the guidance, reaffirming the guidance with a high degree of confidence. Data point number three, as you heard from Suky and I over and over, we're fully offsetting the EPS dilution related to tariffs while minimizing the EPS dilution associated with the acquisition of Paragon 28, just like we said that we will do. The EPS dilution with Paragon 28 is less than 3% on year one, and it's going to be EPS neutral at the end of year two. Doing a solid job in navigating this turbulence around tariffs and acquisitions. Data point number four, we really encourage with the performance of key new product introductions. We've seen great momentum with HIPS, almost 4% growth in HIPS in the quarter in the US. As we get into Q2, Q3, we're going to continue to see that just not in HIPS, but also in knees. We are very confident about the ramp-up in new products in the second half of 2025. We're very pleased. The next data point, we're very pleased with the integration with Paragon 28. Data point number three, we're very, very pleased with how Paragon 28 is going. We expect the growth in the teams that this company has had to continue here at Zimmer Biomet. That is the core five messages I will leave you with other than gratitude for joining the call. Thanks a lot. Thank you. That will conclude today's call. We appreciate your participation.