This camera addresses those issues. So, I’m really excited about it. But it’s a little early that the test cases have gone very well. I wouldn’t expect this to be any less performing than our prior launches, potentially could be even more. The feedback so far is pretty exciting. Yes, we have some really good features in this front.
Operator: We’ll take our next question from Joanne Wuensch with Citibank.
Joanne Wuensch: I apologize, there’s a lot going on tonight. But your operating margins were really impressive. And I’m curious how we should think about those for the back half of the year? And if you can give a full year guide on it, or even how we should think about this into next year, if you’re willing to waive that far? Thank you.
Glenn Boehnlein: Yes, Joanne, we — yes. We really — if you think about operating margins, especially our performance in Q2, we saw a really sort of good improvement, honestly, in gross margin just in terms of some easing of some of the cost pressures, as I’ve mentioned before, spot buys are not material. They weren’t material in Q1, and they’re not material in Q2. I think the other thing, too, that we’re feeling is just that now that we have more evening of supply, we’re also back to sort of better productivity gains. And so all of those things give us good confidence that we should see gross margins improve in the back half of this year, and they’ll gradually improve because we’re still feeling some of this inflation, but that kind of gives us the confidence.
And obviously, some of that will roll into next year as you think about our performance for next year. But we — at this point, we’re not going to guide on that other than to say that we do think we’ll see some gradual improvement for the rest of this year.
Joanne Wuensch: Maybe this is an analyst question at the meeting or the next time you gather all together for an update. But how do you think about in a more normalized post-pandemic environment sort of operating margin expansion on a regular go-forward, maybe even year-over-year basis?
Kevin Lobo: Yes, Joanne, earlier in the call, I think this question was asked, I’ll just repeat that we are laser-focused on, I would say, trying to sprint back to the 26.3% that we had in 2019. And so we’re going to try to move margins on a more ambitious way to get back to that. And then once we get back to that kind of level, I think you’re going to see us wanting to expand margins in a kind of a more consistent way. I don’t know the exact number, something like 50 bps. We’ll get more specific as time passes. But more like an annual, more moderate, nice progression year after year after year, especially with this kind of high growth that we’re experiencing organically. You’re going to expect to see more normalized margin expansion. But in the meantime, we’re looking to move at a faster clip given the falloff that we’ve had since ‘19 and try to restore those margins.
Operator: We’ll take our next question from Rick Wise with Stifel.
Rick Wise: Kevin, I was hoping you would just give us a little more color and perspective on really your very solid international performance double digits, obviously, almost the as strong as U.S. performance, but a little slower than the first quarter’s pace. You highlighted the strong emerging markets. How — I’m just going to ask one question with a couple of parts. How sustainable is this? You talked about some of your key initiatives? And just maybe just your perspectives on the sustainability, what’s the drivers here? And maybe where we are in terms of procedure volume recovery back to normal in Europe just in a larger picture sense? Thanks so much. And great to see the excellent quarter.
Kevin Lobo: Yes. Thank you. Look, international has — it took us a while, but the last five years, international growth has exceeded the U.S. growth. Now obviously, the U.S. growth this quarter was pretty spectacular. But we’re absolutely a believer and continue to have very good international growth in the years ahead, frankly, making up for lost time because our market shares are still below what we have in the U.S. in most of the international markets. And so we have significant upside in front of us. Procedure volumes are pretty much back to normal everywhere. They’re back normally in Europe. They’re back to normal in Australia. They’re back to normal pretty much in Japan. So, the market that hurt us, frankly, in the quarter was China.
So that China continues to be a drag because of VBP both in neurovascular having an impact, also impacting our Spine business. So China continues to be a bit of a drag. But in spite of that, we had really terrific growth in international. And I’d say that Mako is really starting to pick up steam in Asia Pacific. So we already have a pretty good presence in Europe. But in Asia Pacific, it’s Japan, India, China, it’s really starting to pick up. And I think that’s a great leading indicator that will produce really terrific growth both in hips and knees for many quarters to come as that momentum continues. And then as well, the camera launches of 78, that’s also really exciting for the international market. So, we’re going to continue the progress.
