Unidentified Analyst : Hi, this is Samantha on for Matt. Congrats on a great quarter. And thank you for taking our question. To start, I guess a little bit on the adjusted EBITDA. You’ve already achieved adjusted EBITDA positive versus the breakeven expectation at the beginning of the year. Can you talk to us a little bit more about what allowed you to achieve that so early and maybe what we can expect for cadence moving forward?
Todd Koning: Yes. Thanks, Matt. I think ultimately, when you look at our adjusted EBITDA going into the year, more or less, we kind of messaged 800 basis points of operating margin expansion or just EBITDA margin expansion on the full year with a little bit of that heavier in the first half and a little bit later in the second half. And I think that would have kind of led you to something like a minus 5, 0, 0, and plus 5% is kind of how I think the math would have shook out after you looked at that from that standpoint. And so then kind of coming into this quarter, knowing that 0 was kind of the expectation. Clearly, the revenue outperformance benefits there, and we definitely benefited from some incremental improvement in our variable selling expense.
And so I think this quarter, about half of our operating expense leverage was due to variable selling expenses. So we saw that come through a little bit stronger in the quarter. And that’s really just a little bit, I think, timing of our investments on that front. And so ultimately, ended up a little bit better than probably would have expected given the revenue outperformance, but I’d just keep in mind that we’re talking about hundreds of thousands of dollars here as we kind of flip from negative to 0. And I think we spent just shy of $90 million in total. So being as close as we, I think, was a pretty good result, and we’re very pleased with, I think, the broader comment, which is as we’ve kind of built the company and as we’ve architected the lock to profitability, the profitability is coming in the areas that we expected.
And so that, to me, is what is really the takeaway here. In terms of cadence, I think our total top-line raise is another $12 million, so beat by 7 in the Q2 and raised by 5% in the back half. And if you apply really the 10% drop-through on that, think about another $0.5 million of drop-through in the second half, which probably puts you a couple of hundred thousand dollars positive in the Q3 and the balance there in Q4. So that’s kind of how we’re thinking about it.
Unidentified Analyst: And then just one more from us. I know we touched a little bit about the market growth. But also, could you touch on whether you’re seeing any share taking as well? Thank you.
Todd Koning: Yes. I think clearly when you just do the numbers, if the market is growing, call it, low to mid-single digits and I think our surgical revenue grew 41%. We’re clearly taking a lot of shares. And I think that’s been the story. Clearly, lateral in our clinical distinction and all of the innovation we’ve created and brought to the market is driving a ton of attention. And I think, again, the greatest indicator is the amount of training we’re doing and the interest that we’re getting from surgeons and from our ability to elevate the distribution footprint.
Operator: Our next question comes from Drew Ranieri from Morgan Stanley. Please go ahead.
Andrew Ranieri: Thanks for taking the questions. Maybe for Pat to start with. In your prepared remarks, you talked about just the uncertainty in the marketplace and your opportunity to fill in still large geographic gaps amongst your sales organization. Pat, can you go into a little bit more detail there? And just given some of the market disruptions, are you even pulling forward some investment in the sales organization? And maybe just help us think of anything that’s kind of baked into the updated guide for building out some of the geographic gaps.
Pat Miles: Yes. I’ll go ahead and take the — I guess, the qualitative I’ll get to the harder one. I think we’re being as opportunistic as we can possibly be. And the dynamic is that I think that the salespeople who have been in spine and have found success in spine want a partner that’s aligned with them. And so when we talk about being spine-focused, much of it is really an outreach to the people who are committed to this thing over the next 10 to 15 years. If you want to move the field of spine sure, you will work with us. And that’s where it’s like our enthusiasm to continue to outreach to, candidly, companies that have not been very focused in the spine field and think that it’s commoditized is an opportunity for us. And so where we see some uncertainty in the marketplace, we’re a very certain place.
And it’s kind of a strange thing to say, five years ago, when we took over ATEC, I wouldn’t call it hugely certain, but I will tell you today, as it relates to having the foundational technology and the asset base of the type of engineering know-how that we have from a mechanical perspective, the prowess on the neurophysiologic perspective, the understanding of the imaging, the understanding of navigation robotics, I will tell you that it just provides us an opportunity to go solicit and to retain top talent. Top talent in the room makes a difference. We rely upon the sales guys in the room to make a difference. And so we’re aggressively seeking those guys who can make a difference in the operating room to partner with us. And so I think with the Globus NUVA thing and with the big companies being somewhat lethargic, we’re being opportunistic.
