There isn’t a supplier dependency within that particular area. It’s really just us being able to execute, again, a line transfer as the business is doubling and the team are making great progress. But stay tuned.
Rick Wise: Got you. And just one follow-up on Gen 5 and what’s next. You said, Jamie, and it makes sense that probably in the next couple of quarters or until you launch, customers probably will lean more toward the leases with an upgrade clause. If I understood you. But I was just reflecting on it, should we imagine that, that could accelerate this sort of leasing approach in the near term for Xi, and as people, I guess, preferentially, potentially possibly maybe line up to get Gen 5 and that puts them in a more favorable position. How does that all — how are all those dynamics work? Is this good? Better for sales that this transition occurs? Or is it going to be more complicated?
Jamie Samath: Well, I think the first effect is we’ll see the operating lease proportion of placements increased from where it’s been. And again, that’s because customers are motivated to have the protection that’s in those clauses so that they can upgrade da Vinci 5 when it becomes more broadly available. So that was the first kind of message we wanted to provide in terms of 2024 modeling. In terms of then how that gets upgraded, it’s really a function of when does da Vinci 5 launch, which obviously we can’t be specific about right now, and there’s some things to work through with FDA. And then what’s the period of time over which we then go from a constrained or phased launch to a full launch. And so I don’t see that particularly as somehow a revenue benefit in ’24. I think what we’re saying is you’ll have more of the placements that are leased, and therefore, that revenue is spread over time.
Gary Guthart: More likely to be a slight negative than a slight positive. And I think the things we’ve put in place for customer transparency, the ability to see it, work to mitigate the feeling of having to wait and they’ll get a chance to put their hands on it and see it. But I don’t see it as an accelerant.
Rick Wise: Thank you.
Operator: And we’ll go to the line of Adam Maeder, Piper Sandler. Please go ahead.
Adam Maeder: Hi, good afternoon, and thank you for taking the questions and congrats on a great year. I wanted to start on China and ask about the quota that went effective last summer as well as the anticorruption campaign. If I heard the commentary correct — correctly, it sounds like you expect systems to be impacted — system placements to be impacted through the first half of 2024. Does that mean there’s some optimism that placements could get better in the back half of the year? And just any additional color on what you’re seeing in that geography regarding anticorruption campaign would be very appreciated. Thank you.
Jamie Samath: Indications so far have been that, that anticorruption effort is a year-long effort which would take us to the middle of ’24. And so that’s why we indicated that we would expect delayed tenders through the period in which that effort is ongoing. We don’t have great visibility, frankly, beyond the first half of ’24. And that’s why in the prepared remarks, we said at least through the first half of ’24. So yes, if that effort was to be resolved, and if things start to normalize in terms of the pace at which tenders occurred, then you could see some opportunity for that to recover. But we’re not in a position where we can predict that at this point.
Adam Maeder: That’s helpful color, Jamie. Thanks for that. And for the follow-up, I wanted to ask about the procedure growth guidance, the 13% to 16% for this year. Maybe you could flesh that out for a little bit, a little bit by geography, US versus international. How you’re thinking about that as well as, I guess, Europe versus Asia specifically. And just any color on quarterly cadence would be appreciated as well. Thanks again.
Jamie Samath: Let me start with seasonality. And I’m not going to be specific on quarterly cadence, but I do think I tried to emphasize in our prepared remarks that we believe that the first half will be a tougher comp versus last year. And so using that, the comparison from last year and then also thinking about our historical sort of cadence throughout the year, I think you can look at that history and just make an assumption on what that growth rate — what those growth rates could be by quarter. Let’s talk about factors in the procedure guidance. So those — there’s really three primary factors, right? You have — we’ve called out bariatric growth rates, and that’s primarily a US factor. We talked a bit about from an OUS perspective, China, and then also backlog in the system.
And so the backlog also being primarily a US factor. But could still be broader. But — so I’m not going to go into specifics as far as US versus OUS. But I think I’d go back and just really center you on our comments around bariatric growth rates, right? Low end of the range assumes that there’s some continued moderation in bariatric procedures and at the high end of the range that it assumes current growth rates. There’s some impact in China at the low end of the range just from the discussion that we had right now an anticorruption and how long that actually persists and then the benefit of backlog and how that will persist throughout the year.
Gary Guthart: In soft tissue surgery, I would just say, if you look at ’23, the two primary growth drivers that we’ve called out is general surgery in the US, that grew 25% in 2023. And for OUS, beyond urology that grew 35% in ’23. And at the core, we think those continue to be growth drivers for the business.
Adam Maeder: Thanks very much.
Operator: And we’ll go to the next line. Go to the line of Drew Ranieri of Morgan Stanley. Please go ahead.
Drew Ranieri: Gary, just, maybe just broadly on da Vinci 5 and just the TAM that you kind of updated at the conference earlier this month. How are you — could you maybe just update us maybe on how you’re thinking about penetration today in general surgery, where you are with chole, hernia, colorectal bariatrics, just to help us level set because it sounds like this could be another progression in general surgery for the company? And then I had a follow-up.
