Kevin Lobo: Yes. Thanks. Look, I’m not going to use today’s call for this because we have an Analyst Day next week in Investor Day, and we’re going to have a surgeon there, and we’ll actually devote some time to the GLP discussion. What I would tell you is the study is saying that there’s going to be a reduction, I think, our nonsense. And here at the August meeting in Dallas right now, spent the morning talking to multiple surgeons at massively credible teaching hospitals, world renowned teaching hospitals who have poured through the research and feel that there is no need for us to worry whatsoever about any slowdown in our knee procedures.
Operator: The next question comes from the line of Josh Jennings with TD Cowen.
Eric Anderson: This is Eric on for Josh. Looking at spine, there’s been some consolidation in the last few quarters. And I was just wondering if you could share a little more detail on your observations in that market. Do you think you’re benefiting from any share shifts? Are you making any competitive rev hires? Any detail there would be great.
Kevin Lobo: Yes. Look, it’s still early days, if you’re thinking about the big consolidation that’s occurring, and it’s not the only one, right, that the last 4 or 5 years, we’ve seen quite a bit of consolidation. There’s still more operators in spine than we see in some of our other specialties. But I think one of the drivers of the consolidation is enabling technologies. It really is sort of ticket to the dense to be successful long term is having really good enabling technologies. Our Q guidance system, we’re delighted with the performance of that with the fastest camera in the market, which we developed internally at Stryker. And that QCard will then be paired with Mako in the future, which is really exciting and will provide an even smaller footprint than what you see with the other spine enabling technology ecosystem.
So I think that’s really the catalyst for the future is — and that will probably provide even more consolidation going forward. But as it relates to sales force a little early days right now, not a lot of change. I think you’re going to see more of that change as we roll into next year when they have to decide who’s in which territory, in which person. They’re sort of holding things constant for now. but that disruption will come, and we look forward to taking advantage of that however we can.
Eric Anderson: Understood. And then maybe on M&A, I was just curious to hear your latest thoughts on deals given the current market environment. And secondly, are there any areas of the portfolio organic growth?
Kevin Lobo: Yes. First of all, I would say today, every division has targets for inorganic growth. So the — we have a decentralized business development model at Stryker. And every division has a list of companies, and they’re just waiting for our cash position to improve such that we can start doing more deals. Obviously, we’ve done a couple of deals this year between the Cerus deal and the Palm deal within our Instruments division. But we are lining up targets. There are numerous opportunities. The landscape is pretty rich with targets. Valuations, in some cases, have come down, which is not a bad thing. But on the other hand, interest rates have gone up. So the hurdle rate to achieve the right level of financials is raised a little bit. But we’re feeling good. We’re paying down debt in line with what we had committed to the rating agencies. And Glenn, how do you feel about our willingness to start doing deals?
Glenn Boehnlein: Yes, I think we — we will live up to our commitments and assertions relative to our debt position at the point we get to the end of this year. And so to Kevin’s point, there’s a long list from all of our divisions in terms of potential acquisitions. I wouldn’t say that we really sort of sat on our hands during this period of time. We have engaged with several companies to look at the possibilities. So I do think that M&A is a big part of our growth strategy moving forward, and I’m certain that we’ll pick up the pace in 2024.
Operator: The next question comes from the line of Travis Steed with Bank of America.
Travis Steed: Just a quick follow-up on the M&A question. Just curious if you’d put a little bit of framework around some of the size of deals you’re willing to do or what we should kind of expect when you move into some of the larger deals you’ve commented on in ’24.
Kevin Lobo: Yes. Look, M&A is very fluid. We’re not going to really comment on size of deals. Over time, obviously, the larger volume of our deals are going to be smaller tuck-ins, but our debt-to-equity ratio is getting right around close to that 2.5 level. That’s a nice level to be — to hit. And once we hit that level, then we have the freedom to be able to do what I call main course size deals. I think we’ve been on an appetizer diet towards the end of last year and into this year. And we have the capacity to be able to do $1 billion deals if they present themselves and if the returns are strong. So not going to predict exactly what will happen, but we’re going to get back to kind of our normal offense in M&A that you saw for the last 10 years prior to the big spending on right Medical in Vocera.
Travis Steed: Great. That’s helpful. And then I know you’re not going to give the answer, but just curious if you kind of level set what we should expect at the Analyst Day. Are you going to give some sort of revenue and margin long-range plan? It sounds like ’24 guidance won’t be until January. Just curious if we kind of level set what we should expect there.
Jason Beach: Yes, Trav, this is Jason. A couple of comments I would say. First off, to your point, as it relates to specifically 2024, we’ll get into that more in January. As you think about Investor Day next week. It will be kind of the more of the long-range plan. We’ve certainly talked about sprinting back to 2019 margins. You’ll hear more about that and when we’ll get back there. And then also just how we think about growth over the next 3 years as well. So — but again, we’ll narrow in on 2024 in January.
Operator: The next question comes from the line of Richard Newitter from Truth Bank.
Richard Newitter: Just coming off at a couple of weeks ago, I figured that ask a question on the Spine robot. It sounds like you guys are still very optimistic on the timing for a launch, I guess, I think it’s in half of next year. Just correct me if I’m wrong on that. we heard from Medtronic, they’ve already got and adapted the Mazor system to get to a bone-cutting capability. I’d love to just hear what kind of capability should we expect with your initial launch from an indication standpoint, should we expect you to be at a point where others second, third, fourth generations are — or are you going to be starting off walk before you can run pedicle screws and stay tuned.
