This includes revenue for Palette Life Sciences of $66 million to $68 million, offsetting the year-over-year declines in UroLift. Now in the quarter, Interventional Urology grew 6.1%. Palette came in, in line with our expectations and continues to perform very well. UroLift performance was also within our expectations. And as we expected, UroLift was impacted by the declines in the office side of the service, but also from the cross training. And your insights are correct, Mike. As we go through the year, that cross-training will be more or less completed for those 50 once you get into Q3 and beyond. So feel good about the 7.5% on a full year basis for the Interventional Urology business unit.
Operator: Your next question comes from the line of Craig Bijou from Bank of America. Please go ahead.
Craig Bijou: Good morning guys. Thanks for taking the questions. Liam, I know you are not going to get into the specifics on 2025, but Street expectations for margin expansion of have come down looking at 2025. So maybe if you could just talk about some of the opportunities to expand margins in 2025 and how those might be lining up maybe without actually given specifics, but just kind of talking about where you could see some improvement.
Liam Kelly: Well, I think, Craig, it all starts with the gross margin line. And if you look at this year, at the midpoint, we’re going to expand our gross margins by about 100 basis points. We’ve had a really good start to the year. Gross margins expanded 170 basis points in the first quarter of the year. So God rest my mother. She used to say, good start is half the battle, and we’ve had a really good start on the gross margin line. As you look forward, we have a number of catalysts for the gross margin line to come into being. We continue to have continuous improvement programs within our global supply chain team. We’ll have Palette the MSA will be behind us when we get into 2025. Palette will be continuing to ramp when we get into 2025.
So those two factors will obviously help our gross margins. And I believe we’ll continue to have positive pricing in 2025. So that mix and positive pricing, continuous improvement programs. And then for Palette specifically, you’ll begin to get leverage to the op margin line where it becomes accretive to the op margin and we’re a very disciplined company on our OpEx. So I do believe that it all begins and ends with the gross margin line and we – and it will drop through to operating margin into the future. And I feel good about our prospects to continue to drive both growth and operating margin leverage on a solid 6% top line growth for Teleflex and underlying 10% EPS growth, which is pretty much what we’re delivering this year.
Craig Bijou: Got it. Thanks, Liam. And if I could follow-up on maybe some Standard Bariatrics and Titan, and as you expand the product offering there, maybe you can just give us revisit kind of how to think about the contribution from Titan and Standard Bariatrics in 2024 and going forward? And maybe what the new commercial updates or the new product expansion can do for growth?
Liam Kelly: Yes. Thanks, Craig. So first of all, on the product expansion, having buttress is an important add-on to the Titan product. 60% of surgeons who do – gastric sleeve use buttress. And technically, the Titan product doesn’t need buttress because of the seal pressure and a very high burst pressure. But it’s what they want to use. So we have given them what they want to use, and it’s been very well received by the bariatric community. I will tell you that in Q1, Titan came in, in line with our expectations. So, that was good to start the year out in that regard. And I do still believe that it’s going to be a contributor to growth this year and in future years. Just to give some color on what’s happening with gastric sleeves on a macro level, I think, investors would be interested in that.
So, in the second half of the year, we saw gastric sleeve procedures down 10% to 15%. So, I think what that means for Teleflex is the market we’re growing into is a little bit smaller potentially than the $250 million plus that we outlined to that. But at the end of the day, it’s still a big market to grow into with lots of opportunity for us to penetrate the Titan product into that gastric sleeve market.
Operator: Your next question comes from the line…
Liam Kelly: Sorry, I just want to add one other thing, Craig, we – again, in the quarter, we had a robust fracturing and training of surgeons in the quarter. My apologies to cut you across you, operator.
Operator: Not a problem at all. Your next question comes from the line of Richard Newitter from Truist Securities. Please go ahead.
Unidentified Analyst : Hey guys thanks for the question. It’s actually Sam on for Rich here. Just first one from us on 2Q, I think $760 million to $765 million [ph] a touch below Street there. Some of that’s from FX, some of that’s from the OEM pull forward. But just anything else that you would call out in 2Q sort of explaining the delta between Street and the guidance?
Liam Kelly: No. They are the two big buckets, Sam. There’s about $6 million of FX in Q2 and also there is a few million of OEM products that were originally planned to be shipped in Q2. Just bear in mind that the MSA was slightly higher in Q2, that’s something just to bear in mind. And as we go through the year, you’ve got that dynamic of the MSA, and you also have the dynamic of Palette ramping as you go through the year. So you’ve hit on the two main impacts on Q2. $760 million to $765 million [ph], 3.7%, and we feel good in our ability to deliver that.
Unidentified Analyst : Great. And then just on Palette. I know try to avoid, given the product specific that you given us the 66% to 68%. Just curious what you’d be looking for in the market or end results to take that range up and what could give you confidence there. Thanks for taking the questions.
Liam Kelly: Yes Sam. So it started very well, that’s the first thing I would say. The second thing I would say, there’s a lot of enthusiasm for the product. The third thing I would say, the expanding of the indications is a key strategy for us, not for this year, but in outer years to continue to grow that. And that will be a unique indication that no other spacing technology will be able to address. I think that the product – the fact that you can actually – the product is very visible. The fact that you can mold the product, the fact that you don’t have to rush with the product is landing really well with both the radiation oncology community and the urology community. So we’ll get another quarter or two tucked under our belt, Sam, and then we’ll come back to the investment community with our thoughts on the $66 million to $68 million. But as I sit here today, feel really good about the $66 million to $68 million.
