Mark Hair: Yeah. So, Rich, we’re evaluating all these opportunities to reduce costs and we’re confident that we can definitely manage them. Based on our lower revenue guide, if you take the midpoint or based on the lower guide, there’s a healthy component of the cost reductions that come very naturally from reduced variable expenses related to COGS, commissions, corporate incentives. And then the remaining expenses are discretionary in nature that we know that we can manage and won’t impact our business longer term. So we’re a nimble company. We’re nimble enough that we can operate the P&L effectively without losing sight on our core opportunities. So we feel comfortable with that P&L guidance.
Richard Newitter: Okay. Thanks.
Operator: One moment for our next question. Thank you. Our next question comes from the line of Drew Ranieri of Morgan Stanley. Your line is now open.
Drew Ranieri: Hi, John and Mark. Thanks for taking the questions. Maybe just to again, revisit the competition again. You mentioned you’re at about 3000 surgeons now, so maybe just hone in on this a little bit more and kind of like what you’re seeing in your surgeon base. And I think we’re also all kind of struggling to see or really understand that the 7% to 13% growth guidance that you’re giving now is really de risks for the competition at this point. Like why should we be confident that this is the right range? What are you seeing to maybe help instill that?
John Treace: Yeah. Hi, Drew, it’s John. You know, I think we feel pretty, pretty good about the guide. We’ve definitely got some headwinds, but we also have tailwinds. We are still adding new surgeons, but some of the volume that our surgeons were doing are being taken by some of the competitive trials, some to MIS osteotomy. So we’re just seeing a – we plan to continue to add new surgeons. It’s just that the efficiency we’re getting per surgeon is a little reduced and then there’s some churn there as some may decide to go with a competitive product mid or longer term. So is that – anything else I missed there or Mark or..
Mark Hair: Yeah, and we feel really good. I mentioned it a little bit earlier that the comps are much lighter, excuse me, in Q3 and Q4. So that’s going to – that gives us additional confidence and then having these new product lines that have been, you know, we’ve been working on for a long time here. We’ve developed some great products not by ourselves. We’ve used a great surgeon advisory group to help us build these new MIS products. We’ve got – John also mentioned we have other things that we’ve been talking about for a while coming. We’ve got RedPoint products. We have a new SpeedPlate design that’s coming, and we have other things as well that were always coming in the back half of the year with easier comps. So we feel good about the guide and that it’s been properly de risked.
Drew Ranieri: Okay, got it. And again, just with the surgeons, can you talk about maybe like, what attrition rate you’re maybe seeing in the surgeon base at this point? Compare that maybe to historical levels. And when we do think about the surgeon base, I mean, where in the curve or the adoption curve are you kind of seeing the most impact within the kind of the competition dynamic? I mean, is this happening more to, like, your year one, year two, year three surgeons, or is this getting into even some more of your tenured base?
Mark Hair: Yeah. Great, great question, Drew. So, you know, we’ve talked about that. We said last year that we plan to grow 250 to 300 surgeons this year. We’re well on track with that. We continue to add surgeons. They fuel current and future growth, and so we continue to do that. What we’re seeing is that it’s not so much an attrition rate, it’s more of how often are they going to use our Lapiplasty, this Lapidus solution, in the OR, and to the extent there are competing products, both from an MIS perspective, that’s the osteotomy. It’s a different approach altogether to the bunion correction. Or if there’s other Lapidus type solutions, there’s just a lot more of them. And so we’re seeing that, we continue to add new surgeons. They continue to do what we’re expecting them to do in that first year, but we’re seeing some of our more tenured surgeons who have been using other options rather than Lapiplasty exclusively.
Drew Ranieri: Got it. I’ll hop back in queue. Thanks.
Mark Hair: Thanks.
Operator: [Operator Instructions] Thank you. Our next question comes from the line of Harrison Parsons of Stephens. Your line is now open.
Harrison Parsons: Hi, John and Mark. This is Harrison. I’m for George. Good afternoon, and thanks for taking the questions. I wanted to start on rightsizing the P&L. I was wondering if you could just expand a little bit on cost or areas that you could see costs take out. Is this primarily in the sales and marketing line or are there other areas we could see some leverage in 2024?
Mark Hair: Hey, Harrison, this is Mark. Great question. As I did mention before, that when there is lower revenue, there’s a fair and healthy portion of costs that come out because they’re purely variable in nature. And so – there will be reductions in that sales and marketing line item just because that’s where a lot of the variable expenses come from. But there will also be some overall reductions throughout the P&L. But again, we believe that those are going to be discretionary spending items and that we’re definitely nimble enough that we can operate the P&L effectively and without losing sight on all these commercial initiatives and programs and launches that we’re talking about. So, yes, there will be some that are variable on the sales and marketing line, but it will impact some of the G&A and R&D as well.
Harrison Parsons: Okay. Yeah, sounds good. And then in terms of protecting your IP, I was wondering if – I guess I know there’s been competition for a while. Has there been a new product or is there something specific to go after there? And kind of what’s the game plan in terms of protecting that IP?
John Treace: Yeah, Harrison, John here. You know, we’re really not going to comment much on our IP strategy timing, but as and when things may happen, we will communicate to you as we progress.
Harrison Parsons: Understood. Thanks for taking the questions.
John Treace: Thank you.
Operator: One moment for our next question. Thank you. Our next question comes from the line of Danielle Antalffy of UBS. Your line is now open.
Simon Nigan: Hey, John and Mark. This is Simon Nigan on for Danielle. Thanks for taking the question. When you think about the competition that you’re – when you think about the competition you’re currently facing, is this coming in the form of larger competitive headwind from surgeons not converting over from osteotomy’s or is this purely from the competitive Lapiplasty products? Just want to know how we should think about that.
