Kevin Lobo: Look, we really like our chances. A huge demand for Mako hasn’t stopped. We know we have the best system on the market, which we’re really excited about. We’ve filled our gap with Insignia on the hip side. We have an awesome 3D-printed hip cup with Trident II. We have the cementless offering, which, of course, we’re way ahead, a huge head start on cementless. Terrific publications coming out with excellent five-year data on cementless, which will give surgeons even more confidence in that in the future. And so there’s other things the team are looking at. We have some really exciting products — our hinge product that we’re going to come out with later this year to shore up revision. And that’s pretty exciting.
We have plans to have revision on Mako as well in the not-too-distant future. So we’re not going to sort of sit tight on just everything we’ve already done. There are incremental additions. We just not so long ago launched that 2.0 software for — to improve the user experience, improve the training of residents. And so, we think we have a winning hand, and we’re going to continue to play that hand.
Operator: We’ll take our next question from Mike Matson with Needham & Company.
Mike Matson: I want to ask one about the Q Guidance System in spine. It sounds like it’s doing well. I’m just wondering if you could maybe give us sort of an overview of it. I know you’ve had navigation systems time before. Is this something kind of different, or is it more just the latest version? And then how does it kind of fit in when you do bring Mako into spine?
Kevin Lobo: Yes. What I’d tell you is this has the fastest camera on the market. Homegrown, we didn’t use a third party to do this camera. It is lightning quick. And that camera will eventually be ported to the Mako as well. So that make will have that same terrific camera. It really — the user experience is terrific in terms of being able to see and be able to do your procedure. So, the feedback we’ve gotten is outstanding. So, we’ve always been good at navigation, but this is sort of really putting our best foot forward. And this user experience that you’re going to have with Q will transfer to the Mako spine, and that we’re really excited about. So this is — this even before Mako is already having an impact.
And we think once Mako’s launched, it will really fill this important need in the market for us to have a robotic application. We also have another product in enabling technology coming out of our instruments vision that’s going to be used by the Spine group. A little early for me to give you details on what that is. But at the appropriate time, we’ll tell you about that. So that, combined with Mako is going to give us very compelling enabling technology platform for Spine.
Mike Matson: Okay. Got it. And then just given the guidance, I assume this is early, kind of material issue, but I thought I’d ask about it anyway because we’ve heard about it from some other companies. But can you just comment on any Russia exposure you have and whether or not there’s the latest sanctions are having any sort of impact on your business?
Kevin Lobo: Yes. Obviously, we’re abiding by all the sanctions, as you would expect, and working in lockstep with the industry on industry-wide response to what should be humanitarian products and should be — should they go through the approval process. That’s obviously very lengthy. It did have a negative impact. But honestly, our Russia business is so small that it’s kind of meaningless in the overall picture of Stryker. But yes, we are abiding by the sanctions. Yes, it did have a negative impact, but it was really — it’s not a material business for Stryker.
Operator: Our last question will come from Richard Newitter with Truist Securities.
Richard Newitter: Congrats on the quarter. Kevin, I think a few months back in the first quarter, you were asked a question at an investor conference about what areas could be of interest to you? There’s so much going, right, across your existing businesses. So obviously, M&A, though, is still top of mind. So I’m just curious kind of where are the holes? And where do you think the investment could be most incremental for you?
Kevin Lobo: Look, it’s a good question. I think I’ve talked about the adjacencies that we’re interested in. First and foremost, there’s a lot of tuck-in demand. Each of our businesses are building their wish lists and sort of evaluating different targets. And I think that’s job one is looking at those near-term targets that tuck-in. Those create tremendous financial returns for Stryker. They don’t always move the needle for the overall growth, but they’re really terrific financials for us to do. And when you feed our existing sales force of Stryker, we know how to sell, and we’re able to really do that very, very well. I would tell you, in the adjacency space, no change to the adjacencies that we’re interested in.
I think I’ve mentioned them before. What I would tell you is neuromodulation’s one I’ve talked about in the past. And within neuromodulation, obviously, there’s a lot of different parts to that. There’s spinal cord stimulation, there’s deep brain stimulation, there’s peripheral nerve stimulation, and stimulation as you know in sleep apnea. And I do believe electrical treatment is going to be a big part of the future. Over time, we’ve been a little hot cold on spinal cord stimulation. I would tell you right now, we’re probably a little bit more cold on it, just kind of a challenging market and — so that’s the way the only thing maybe I haven’t said in the past. But otherwise, every other adjacency that I talked about in Q1 are still very much on our radar screen.
And as our cash frees up, probably more into next year. If the tuck-ins aren’t of a significant size and we have cash starting to build up and our debt position better, hopefully, we’ll be able to make a move in one of those adjacencies that I’ve talked about in the past.
