Kevin Lobo: Yes. The only thing I would add to Jason’s comments are every ASC MAKO that’s installed is financed everyone, and that’s becoming a bigger percentage of the MAKO installation. So what you’re seeing is more financed rentals and financed versus outright capital purchases. So that obviously the revenue number and the revenue growth of 3 percentage or less is not the installation growth. The installation growth is higher than what you’re seeing. And over time that’ll start to normalize and then you’ll start to see the growth rate be more reflective of the installation rate. But we’re going through this kind of transition phase right now, and we are giving them away. So we charge for it and we have different pricing models, obviously, and we want the customers to have skin in the game, so that if we just give it away, they have no incentive to use it.
And what we don’t want are a bunch of robots collecting dust. So we care a lot and we monitor utilization of the robots very, very significantly. And then, of course, OUS we’re seeing terrific pickup and a lot more purchases than finance. We do offer financing around the world, but so far in international we’re seeing a lot more purchases than we are financing, which is why you see the revenue spike. But again, international has a huge potential. It’s kind of where we were in the U.S. about five years ago.
Matthew O’Brien: Understood. Thanks for that. And then sticking with MAKO, Kevin, you mentioned, shoulder, you don’t really need the application as much because you’re crushing it on the shoulder side. But in spine, you’re doing better the last couple of quarters. I haven’t really heard why that is. I don’t know if it’s just some of the dislocation or not. But I think it’s probably a bigger opportunity on the spine side of the business going forward. These centers that already have MAKO and use it for hips and knees, can you quickly transfer the system to the spine part of those institutions or facilities and start to pick up share fairly quickly? Or is this something that’s going to take many, many quarters? We’re talking 2025, 2026 before it really starts to impact the spine business. Thanks.
Kevin Lobo: Yes. What I’d say is, first of all, the MAKO brand is extremely well known. That’s a very, very big positive. And I think what you’re going to see is a much faster uptake than you would have seen had we not had already had MAKO on hips and knees. Will it take a little bit of time? Sure. Will a spine surgeon want to share the robot with hips and knee surgeons? Not sure yet. Obviously, that’s something we’re going to see play out, whether they’re going to want their own robot or they’re going to be willing to operate on the days that the hip and knee people aren’t operating. So that’s a whole dynamic. I think that’ll vary account by account. So we’re already working on our commercialization plans.
I think part of the reason for our success is – success with the Q guidance, which is one half of the system. So you’re going to have the Q guidance and then as well, MAKO, they know it’s coming now. Customers have gone to Leesburg, Virginia, our spine headquarters, to see MAKO spine. And many of them have stopped their purchases of other robots knowing that this is coming. So I think that’s what’s helping to contribute to our, let’s call it somewhat improved performance, but we still would like to grow at a higher rate than we are right now. And we know we need not just MAKO, but also the CO-PILOT product. So we’re going to go from being behind to being ahead. And CO-PILOT should launch in a similar time frame slightly ahead of MAKO spine.
So you’re now going to have the CO-PILOT product plus MAKO spine, where our competitors will just have their robot. The ones that have robot will just have a robot without CO-PILOT with haptic feedback that can do the laminectomy and discectomy portions of the procedure, which complements the pedicle screw placement. So we’re really going to be in a great position by the time third quarter comes around. Robots do take time, so the scaling will take time, but I think it’ll be certainly much faster than the initial people who came in with robotics, they know, they benefit from it, and they know and they can trust the MAKO brand.
Operator: Our next question will come from the line of Josh Jennings with TD Cowen. Your line is now open. Please go ahead.
Josh Jennings: Hi good evening. Thanks for taking the questions. I wanted to, hopefully, Kevin, ask about just got a temperature check on the health care delivery systems capacity for orthopedic procedure growth. I think heading in to 2023 after experiencing 2022, there were concerns around staffing shortages, et cetera, and potentially be creating a bottleneck for procedure volume growth. That clearly didn’t play out in 2023. It doesn’t sound like from your comments, it’s going to play out. You expect it to play out in 2024. But are there any capacity constraint issues in the U.S. health care delivery system for orthopedic procedure volume growth as we go forward in 2024 and 2025 or is that fully in the rearview mirror?
Kevin Lobo: Yes, I think it’s largely in the rearview mirror. There’s still niggling things here and there, but it’s gotten very quiet. You saw that in Q4. It’s just a boomer of a Q4. And kind of the normal seasonality, I think we now have finally a normalized year for you to compare is, of course, adjusted for selling days, but there is a normalized year finally. And yes, they’ve gotten their staffing issues solved largely, and they do prioritize orthopedics, because orthopedics is a moneymaker for hospitals, right? Cardiovascular and orthopedic procedures are two money makers. And so if they are short staffed, they are going to prioritize staffing for orthopedics. I would say the only area that still has a lot of room to run is ASCs. So every hospital is constructing ASCs, and that’s going to continue to be an engine of future growth.
But I’d say we’re in a very normalized environment. They have the capacity. They can operate additional days, which we saw some of that in Q4 again, which we hadn’t seen for a couple of years. So, I think the hospitals are absolutely ready now, and a lot of that’s behind us.
Josh Jennings: Excellent. Just one follow-up on MAKO. Just with the record system placement quarter. Was hoping to just get some details on where – what you’re seeing in terms of second or even third system purchases by hospitals, hospital systems, any kind of percentage of total systems or – or how big of an opportunity do you see kind of getting that second, third, maybe even fourth system into hospitals? Thanks for taking the questions.
