Richard Newitter: Thank you very much.
Gary Guthart: Just — I want to just step back a little bit on bariatrics. We’ve had a few questions on it, I’ll just make a point. As we go out and talk to surgeons, we talk to obesity physicians and pharmacologists, which we do in terms of our diligence. The sense here is that the market is going to adjust to the change in treatment pathway as it relates to drugs. However, it doesn’t look like the drugs are a cure and may not be a fast path to cure. And a strong consensus among those we speak to, including people who are not surgeons, physicians who are not surgeons, is that the surgery and other interventions are going to remain an important part of the interaction. As the — in the near term, I think the market will adjust to, understand, what role the drugs will play, but they’re not cures and the discontinued rate remains pretty high and the populations of patients who don’t get any benefit from the drugs also remain significant.
So I think there’s an adjustment period here and we should be aware of it. But that may become a tailwind in future quarters as folks work through those sets of pathways and look at long term and durable solutions into the obesity challenges.
Richard Newitter: Thank you very much.
Operator: Okay. We’ll go to the next line. Line of Ryan Zimmerman, BTIG. Please go ahead.
Ryan Zimmerman: Good evening. Thanks for taking the question. Maybe one for Jamie. On the expense management standpoint, I mean, procedures are going up a little bit faster than expense — OpEx guidance by about 50 basis points or so in there. And so I’m just wondering, Jamie, kind of what your views are on expense management and letting some of that leverage flow through as we think about not just the back half of the year but into ‘24 versus maybe reinvesting that in R&D?
Jamie Samath: Yeah. For this year, we have specific objectives with respect to leverage in our enabling functions, which we’ve described previously and that’s a set of objectives that I think we intend to fulfill. Largely, what you see in the adjustments we’ve made to our operating expense guidance for this year is a function of our top-line performance, both in variable compensation and in the number of reps we need in the field to support a higher procedure base. For the rest of kind of the operating expense set of investments, we’re holding to our — we’re largely holding to our plan for this year. When you project into ‘24, I’m not going to kind of describe the direction of where spend will go relative to procedural revenue, we’ll do that in January, but you have a couple of dynamics.
We have the significant CapEx investments this year, $800 million to $1 billion. That will start to create incremental depreciation expense next year. A chunk of that will be in COGS and a chunk of that will be in operating expenses. So you have kind of an operating expense headwind coming there. And those investments being largely facilities, they are planned for the medium term, meaning they’re inefficient for a period until you get to full occupancy or full utilization. On the other side, we’ll continue to look to leverage our enabling functions into ’24. Where that shakes out we’ll do in January because we have to complete our planning process in the back half of this year.
Ryan Zimmerman: Okay. That’s very helpful. And then I noticed, and this is kind of directed at Gary, and you commented on this a little earlier, but you disclosed for the first time, I believe the proportion of lease agreements that are usage based versus fixed operating lease agreement. And I’m wondering, Gary, what that says and the trends that we see there about the health of your customers and what their preference is over time?
