Kevin Lobo: Yes, sure. So as it relates to soft tissue robotics, listen, it’s a very interesting space. As you know, there’s a very large and very successful company that kind of dominates the space. We certainly don’t have a problem selling Endoscopy, if you look at our numbers. Certainly, for our 1788 and our cameras we’re doing extremely well. We still have huge room for growth outside of being in soft tissue robotics. It’s an area that we’re certainly interested in, but very respectful of the large incumbent. And I’m not sure that we’d want to try to take them head on, just like anybody trying to come and take us head on in our space wouldn’t be so easy. But it is an area that we like, there are loads and loads of companies, start-ups in the space, and we’re looking at them.
And it’s not inconceivable that we would make a move at some point. But again, not expecting to come out and launch something that would go head-to-head with the Goliath and try to take them down. So, but it is a space we’re pursuing, we’re interested. We’re looking at companies, and it’s not impossible that we would make a move at some point in the future. It’s just not an easy space. As you know, robots are hard. And we’re going to be very thoughtful and very careful. But we don’t see this kind of – at this point anyways, as a major threat to our Endoscopy business at all.
Operator: Our next question will come from Matt Taylor with Jefferies. Your line is now open. Please go ahead.
Matt Taylor: Hi. Thanks for taking the question. I wanted to ask one about the sprint of margins here and ask you, you do produce some upside on the top line and the margins over the course of this year and next year. How do you think about delivering that to the bottom line versus reinvesting in above that goal to get back to your pre-COVID margins?
Kevin Lobo: I mean, first of all, it’s heavily dependent on sort of the mix that we get if we over deliver on sales in terms of how much margin we can get to. I would say that 200 basis points expansion is the absolute goal, and that will be the target. And we get there a little sooner, so be it. But we won’t take our – our eye off of making sure that we’re doing what’s right in the business so that we can deliver that 200 basis points.
Matt Taylor: And that – I wanted to ask another one on Vocera. You talked a lot about it on this call, and it’s obviously doing well. Can you talk a little bit about how that’s expanding its tentacles kind of throughout your organization? And anything else we should expect from it in the future as it connects some of the different technologies and provide you some cross-selling opportunities?
Kevin Lobo: Yes. Great. Listen, I – integrations are challenging. In this one, we had some challenges with the cloud. We had to restructure the sales force. We are already seeing terrific integration with both beds and now more recently with our wireless stretcher. We had – they had a list before we bought the company, and we’ve expanded that list of connecting products and those products that we’re going to connect to the ecosystem are not just Stryker products. So there are third-party companies that are coming to us and asking to be connected to our ecosystem. So we want to be a vital resource within hospitals. We’re even looking at emergency departments that don’t have really well automated workflow that actually do the documentation that take cognitive load off of nurses.
So the potential every day, it just keeps expanding and expanding it. So it’s wildly exciting. And the team now – the new sales team is really, really pick up in a big way. And so we’re super excited. We’re not ready – ready to talk about which products we’ll be integrating. We’d rather do the integration and tell you about it. And we’d like to sort of give you a full year update. So a year from now, I expect we’ll give you kind of a wholesome update and include more of those products that will be attached to the ecosystem. But we are really, really excited about this acquisition. It’s a platform. So I’d say after MAKO, this is the second platform acquisition that I’ve done during my tenure. The other deals we’ve done, none of them were platforms.
And that means it has wild upside potential over time. Now it’s not going to happen overnight. It’s going to take time. But this is – for us is – it will be very sticky in hospitals. It will just be a renewal, recurring revenue. And then as you add more and more to the ecosystem; it becomes something that hospitals can’t live without. So that’s our dream, and we’re pretty optimistic given where we are right now, given the momentum that we have, given the interest that we have, both from parts of Stryker as well as third-party companies wanting to integrate to the system.
Matt Taylor: Great. Thanks, Kevin. Thanks, Glenn.
Operator: Our final question will come from Richard Newitter with Truist Securities. Your line is now open. Please go ahead.
Richard Newitter: Hi, thanks for taking the question. I’ll just ask one here, and by the way, congrats again on a fantastic quarter, solid end to the year. So just clearly, you guys – since your Analyst Day, in particular, have been conveying how committed you are to margin expansion. You’re kind of putting a stake in the ground, really strong guidance here for 2024. I guess I’m just going to ask, how should we think about that margin guidance relative to the potential and willingness to take on margin dilution as you get more aggressive on the M&A front? Should we think of that as something that already had contemplated the potential to need to absorb some dilution? Is there – are you more focused on top line accretion and more sensitive to kind of margin accretion faster than historically?
I would just love your thoughts there and how we should think about kind of this margin trajectory and sprinting back to pre-COVID with respect to deals and how that will fit in the P&L.
Kevin Lobo: Yes. Thanks, Rich. Thanks for the question. Look, I think back to 2017, 2018, 2019, we were expanding margins before some dilution. We have around 80 basis points. And we were not growing at this kind of growth rate, right? We were growing in the 6s and 7s organically, not double-digit growth organically or high single-digit growth organically. So with that higher growth, this is not a crazy level of margin expansion that we think we could do. But doing small deals. And if they’re small tuck-in varieties, there’s some dilution that will come with that. We expect we’re going to eat that and be able to deliver the 200 basis points. If a deal came along, let’s say, something like a MAKO, which, as you know, occurs once a decade, maybe.
It’s not an everyday occurrence. That had dilution, but we felt it was just so great for the company that we had to do it. We would go ahead and do it. And then we would look at our numbers and say, is this something we can absorb or isn’t it? Our going-in assumption is that that’s not a likely occurrence. It’s not impossible though. And I never want to rule anything out when it comes to M&A. If something really delicious appears and we think that this is going to be great for our future, we’re going to go ahead and do it, and then we’ll do our math and figure out can we get there with the 200 basis points. But in the normal cadence of operations of Stryker – and that means doing a number of deals that have a little bit of dilution here or there – we’re going to eat it and we’ll deliver our 200 basis points.
