Stryker (SYK) 1 Nov 222022 Q3 Earnings call transcript

Welcome to the Third Quarter 2022 Stryker Earnings Call. My name is Megan, and I'll be your operator for today's call. [Operator Instructions] This conference call is being recorded for replay purposes.

Before we begin, I would like to remind you that the discussions during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. include financial will discussions the certain measures. non-GAAP Also, on and financial press the measures to current that the be SEC. GAAP directly most report Stryker's to today's Reconciliations can today comparable found an exhibit X-K Form filed is with release in I the turn now over to will Mr. call Officer. and Kevin Lobo, Chair Chief Executive

proceed, sir. You may

Welcome to call. earnings quarter Stryker's third

Joining of Investor President me Beach, Jason Vice are today Glenn and Boehnlein, Stryker's CFO; Relations.

quarter we and opening comments, on followed Jason saw For during equipment. call, trends the our quarterly capital provide I'll provide and the results today's then before additional updates Q&A. regarding with Vocera by will opening the Glenn to call details

Neurocranial. organic from growth Neurotechnology by and For XX% with and led sales our the MedSurg double-digit growth businesses quarter, Medical was Endoscopy,

businesses double-digit continued and and delivered procedures elective Hip reflecting of worldwide growth, Mako Our our recovery Knee momentum. the also

with our growth emerging despite negative performance Lastly, growth Canada we by international and China. double-digit continued Europe, markets organic in strong led

driven $X.XX we quarter, and the For negative foreign partially inflationary share delivered strong currency pressures. EPS of sales performance, offsetting a by adjusted our

moderate these more but pressures continue the for at to of a expect remainder We XXXX. level

and for are shortages, have been including inflationary not which with mostly our would to We higher are if affecting the strong growth, even taking we cost headwinds, pleased sales Instruments. Medical actions with Meanwhile, material deal challenges.

series First, as noted pricing actions of costs, a our in higher across took the QX, given we portfolio. input

renewals lessening pirate these given QX, We effect to negative begun of the but time have from take contracts initiatives, impact timing the will see on the rebates see of impact business contract it the price expiring. our in to and full

plans the target additional discretionary taken of and hiring parts our actions Second, business. restructuring of are items, reduction proceeding we cost, actions around including with in have

imaging new making Mako. we system Q and continue with includes pipelines. good our navigation, the This in development invest Spine. enabling R&D, applications on spine focus Notably, product of are in in launched for Guidance demonstrating investments to navigation R&D technologies, and our continued for including robotics, our We recently progress shoulder

Cardan outlook is on we Mako and pending project in deal customary stopped which business quarter, and will growth focus technology sales the leader This range, in during the closing organic higher Also purchase our deliver to shoulder of year Cerus the an have to Mako to robotic to tech, in frame. growth launches We all agreement of the continue occur to end the time We signed spine expect of conditions. our a X.X% at reflected the expect full the narrowing in and confident hemorrhagic similar is Endovascular, remain spine that a end sales our high energies prior to our med of X%. now segment.

our range However, us shown resiliency, lower worsening continued caused full and to to Overall, have and pressures $X.XX year that to currency pleased adjusted EPS high. engagement team remains per has good employee very I'm share. $X.XX inflationary foreign our

best age workplaces continue to place professions, great across world's of recognized most groups to recently and as one by many gender We be countries, work, the as a Fortune.

turn our high outlook, earnings ahead strong will challenges pricing us actions, and Jason. growth look I to to call to strong year, next growth. we the supply inflationary the customer about growth with the continue As well position return we impact combined now to and to Though pressures chain will exciting optimistic over cost will feel launches. and product with new XXXX, demand

including the Thanks, geographic current capital providing an trends comments the the environment, update today on focus Kevin. during will on quarter. procedural, and My

business. quarter recover in across normalized Procedural to the of and throughout volumes most reach third In continue levels addition, of I'll the provide the beginning we business. an update progress countries, our integration most to are on Vocera

in impact Parts to our seeing expect this reduce quarter ability meaningful be strong Europe of Demand moderate States, United procedural to gradually, are we continue to continued have products the to remained year. continued improved our way. COVID-related we to the Latin These volumes Pacific will America. and division. growth Geographically, from into the double-digit pressures Asia have a resolve will due procedural ongoing hospital as and challenges quarter While volumes for likely capital the in more be during recover, the in a impacts. very volatile steadily backlog tailwind of staffing next seen Medical

stemming the soft realize delays delays did as Specific well we to we variability quarter hospital some Mako, challenges. as environment. installation in hospital scheduling the as were However, from realized for installations

expect order book Mako. our However, for quarter a remains we fourth strong, good and

will update We our January. in Mako key metrics you on

integration key our activities. to Now

continue and technology. be this Vocera pleased growth our integration We of about progress excited the potential remain strong to with platform

the QX model, However, Stryker in elected certain we some with caused legacy some with to force cloud solution as installations to disruption. that resulted XXXX. customers. do shifting to we our on-prem essentially shifting in which QX, were These all acquisitions, to the delay sales from servers we flat delays has are Also, revenues

pipeline and XX% renewals. remains However, strong retention software remains customer the for order at very high

while processes QX these dynamic, procedural to of strong, to our With growth. to that, the are over the ability macroeconomic next revenue year, gives and expect continue positioned for drive be continue after the our us demand strong robust remain growth. products turn which drive we sales confidence will to to volumes Glenn. environment In I'll underlying into call We which summary, remains in improving

will I quarter financial our Today, my third on results comments drivers. related Jason. Thanks, the and focus

release. Our detailed financial results in press have been provided today's

in the Our organic sales X.X% quarter. growth was

selling average X.X%. with unfavorable The from was were quarter impact the third pricing The in XXXX. in line quarter's days

pricing to which in have all quarter. initiatives, MedSurg particularly positive for U.S. see businesses, the the our impact We started positive of had pricing

impact sales. Foreign currency had a X.X% unfavorable on

businesses. our continues the very was that is as markets, our Asia time inconsistent We MedSurg In to be positive Pac shipping XX.X%, This impacting strong. sales organic Nevertheless, our was demand growth Europe, specifically capital emerging continue remained somewhat of to most order availability. supply momentum international by markets, to lingering from products in customers have International book countries. increased lines U.S. the impacts and and disruptions robust costs chain product experience other especially quarter, capital led delivery related Japan by COVID in sales X.X%. across organic growth offset our and sales Canada, impacted to

the Our impact down $X.XX exchange adjusted $X.XX translation to EPS foreign of of from quarter the in currency due was XXXX $X.XX. primarily of

from gross associated higher costs higher offset the with and Additionally, sales by benefit were discipline. cost challenges margin

organic our quarter, U.S. organic sales of with XX.X% MedSurg X.X% growth I'll some highlights Now currency growth which included performance. in of business. growth had our of was organic Instruments From evacuation U.S. provide Steri-Shield. growth sales perspective, X.X% sales by growth led the XX.X% growth. product segment international of by highlighted organic and smoke around constant growth In had and a sales Neurotechnology and of Surgical XX.X%, Technology

chain Prime its Endoscopy U.S. quarter, capital ProCuity had sales products. challenges of by of Instruments fueled sales supply U.S. had and growth growth businesses. growth demand. and primarily structure Endoscopy the Medical Sports by double-digit XX.X% experienced related XX% care businesses growth the Sage and organic our acute by both Medicine core organic highlighted to During in in driven

emergency Medical to experience that care noted, supply continues impact previously products. primarily challenges As chain

both clinic strong comparable organic driven Our included growth by included U.S. strong volumes included growth XXXX, this had our Geographically, hospital U.S. well of businesses. and sales Neurovascular of a disruptions all had markets. in competitive in Trauma international decline growth in currency of which our constant and neurocranial This X% which internationally. emerging MedSurg and growth other an our Max and performances and as double-digit X.X%, Spine in and businesses. XX.X%, sales solid X.X% Internationally, growth had business the double-digit organic organic and and Neuro of in impact The Hip, reflecting business Japan, to of organic staffing China solid due Neurotechnology and organic X.X% Knee growth as sales slower pressures. XX.X%, of growth had Extremities space U.S. in growth the strong products. shortages reflects and Orthopaedics

Hip the growth. and reflecting of Hip Our business Stem grew Hip by procedural continued primary U.S. organically, growth launch XX.X% our recent fueled Insignia strong

Our U.S.

business York position New robotic-assisted grew reflecting procedures. Knee our market-leading XX% in organically, knee

XX.X% in by businesses, BLUEPRINT. all U.S. and products organically by new our and with X Perform business strong growth highlighted led Extremities Our extremities grew Trauma double-digit upper performances across

in volumes in surgery business Our from technology grew Spine sales lower the competitive X% performance enabling business, our environment. somewhat solid U.S. the of offset impact by

organically, U.S. volatility as well by strong and quarter. somewhat which aforementioned momentum Our in X.X% organically the the reflects XX.X% offset and volumes performances as impact COVID-related as ortho Other declined primarily in by in procedural of India, Japan, Canada strong installations by Europe driven improve in delays grew Australia. Internationally, Spine Orthopaedics Mako the the in

in highlights operating the on focus will the quarter. I third Now

inefficiencies unfavorable. business points premium inefficiencies. at the the to steel higher-than-expected from of of third sales. purchases chain including the impact This of margin price operational from the included premium XXXX, other XX the exchange basis from and was from XX.X% pressures, electronic pressures gross as of labor, mix, supply inflationary transportation on XXX adjusted of approximately well Sequentially, prices XXXX, disruption foreign related margin unfavorable primarily points basis components as and and gross unfavorable costs reflecting pricing impact quarter and was Our impact unfavorable QX inflationary and

XXXX. the year adverse throughout We into expect the these impacts of and continue to remainder

provide. X.X% impacted and reflects XXX XXXX to year Adjusted basis adjusted This XXXX. approximately compared that funding now spending our we to to commitment represents from growth was For points. the future basis we'll XX sales, continued the of related a points which expect full R&D XXXX, margin adversely gross be by increase innovation

points Adjusted adjusted discipline. Our discretionary was the increased and was of XXX lower adjusted head resulting our approximately basis favorable by the challenges basis This is decreased OI&E control margin resulting be SG&A summary, points gross driven of by offset the other exchange somewhat operating interest to the for aforementioned In and unfavorable QX lower XXXX. focus reflects third currency translation, of expense was million. was XXXX. This impact XX.X% $XX discipline. income. primarily impact count interest from and which expense margin performance negative XXX quarter approximately primarily quarter, cost from XX.X% than sales, of cost foreign the from We which on to sales, an net XXXX, income and anticipate

adjusted We XX%, at effective an year impact and is than our previously the XX.X%, which geographic reflecting adjusted of of certain expect communicated effective third to our end of had to rate Our tax range items. the of tax quarter lower be slightly discrete rate low XX.X% full XXXX. tax now mix

sheet. the down payments of quarter, to $X.X billion. cash total which $XXX balance and of loan quarter $XX.X the on debt Focusing securities debt ended was paid with Approximately million. and year-to-date the in our term marketable We third billion million brings $XXX of

flow. Turning to cash

by pressures, chain momentum $X.XX to offset be for our earnings in inflationary X%. foreign our capital year-to-date impact to capital Our full the pre-buying X% sales and $X.XX costs current open is is Based partially cash components, $X.X balanced results the other seasonal hold quarter inventory up share now which in year in now book the our $X.XX performance expect year, equipment revised foreign earnings for expect supply year to exchange And with This approximately and to to of be the material reflects the actions continuing the net now range approximately currency, billion. strong of share earnings from in certain impacted adjusted X.X% guidance impacted on our be anticipated additional per sales we in range businesses, strong by levels, per and significantly, electronic third range. adversely will XXXX and increases. and sales certain impact the $X.XX. of be critical to expect implant adjusted by operations adversely of our the future we the order results, organic raw growth full higher inventory earnings, of included call diluted net of rates we Considering near net sales now full for If I and cost-reduction currency and to Q&A. for most

[Operator comes Robbie Instructions] Chase. of with first the question Marcus line Our from JPMorgan

half That here. third for and both currency. to line was first came operating top a for I margins ask do It lower. nice want question in lot on really quarter. And said, a on like Congrats my looks it fourth quarter

transient to I what the fourth of quarter like sequential strong into third to saw is much improvement driving in negative know we I'd And think quarter. was how here? what's what the --

is this Robbie, questions. Good Glenn.

improvement. of the But sort that were kind the and we seeing that we QX of As changed sort looked what what that just the relative quarter improved third from -- at improving at the was improvement we moderate of impact our to outlook. was, saw we to supply we and not rate visibility had specifically, cost and saw of

inflation all manufacturing higher-than-expected process. metals, categories. of we then drove noted, premium transportation. We of that really to I But across other costs. And saw that labor, as sort noticeably So supply our of continue chain and see in just in variability most almost inefficiencies all

And and you stops so had starts, that -- which, of cost. drives we up know, lots just more as

So transient, feel visibility have in confident what good what's it, raise I what's supply think QX, we I about I we and did. if think which enough our sales guidance, is think to to not,

we'll of we'll you to component think contacted a X] going fluid higher minus experience hands electronic some once that little be we'll vendor [N we're would this so another And in environment issue. then see And feel bit still get we around about a to issue, I sort continue that QX. I our one tell from costs. where of

of we're feeling we're through of sort through so supply managing our -- chain as that And issues. sort

where for That as the And focus, year. don't starting X.X into good. go really in the think with issue looks line much think with to we I to Great. is X% XXXX, everybody top the X.X% quarter, there's I

feel Street basis is questions year. see comment I -- points you the looks next P&L down The I there's numbers into Kevin, margin Where strong comfortable my And and growth on think XX year. people north about next mentioned expansion. of EPS EPS. the

on initial and Next particularly love means. year, might on if thoughts that seeing a be any here, have we're hear the given little strong growth XXXX comments high EPS what would you which to trends

this guidance Yes. Thanks, specific did give is an aberration. I as that Robbie. going year in do. But that comment We're January, we opening my in to to always make remarks signal

January. We strong specifics, will But earnings, we'll in absolutely to to get which you get in imply does expansion XXXX. back margin

with Fargo. next Our Lawrence Biegelsen from question Wells comes

think Kevin supply How wanted back Glenn, I these are time? you. you much to expect I on do much follow-up. impacted shortages. know don't about expect they if you comment the in how or And over get are one you sales to had ask you first I to willing be And to impacted QX?

to customers. at We're important. disruptions but some we're clock to I to better specific backlog as suffice pretty work and products are complete we you I the On that on disruptions, supply ship those to that out make numbers would guidance say Larry, Yes. not working get in have a high, those we think can of an order to we on on customers. sure finished and all-time seeing are getting how the are product to them some, very And customers. relative focused products products, visibility. to around terms with give very our significant tell across know bit them hand-to-mouth that that's our componentry that to secure get we we businesses. we getting to We hard little capital

business. going in the lose problems is our Yes. to side MedSurg not MedSurg Larry, And business, are of side the our I'd we're add on what sales. of our

Those Instruments. that we sales we products in plan have problems care same urgent. issues Frankly, materially nickeling this higher were lot impressive have side, been two would to in to lost were would So a of emergency most with to waiting. impact. In are case, those across implant which customers and these divisions but impacted the pretty demand competitors. customers. the had our divisions two of do because the XX-plus those severely QX. numbers, We portfolio, organic, the have if our percent Medical's products be The aren't a have are get at the

really will a year. sales, gives But our any that I those in You'll recovery trajectory see which confidence lose going QX -- expect next of positive sales to -- of me and lot into recovery don't next some into continue. year sales

Glenn, other that in just helpful. is I expect Mako, little see That's QX? can but color with a then Mako rebound line quarter. to in line turn And are bit when the the this not confident positive? the maybe you we softness How know And on more

Glenn, a little as And like relates prepared you to piece, were order But at here Mako. it's want pipeline, Mako, the I'll other we feel I'll then, it it talk about bit comment I to the free. the say, the on start Larry, Jason. my and if is And But in said remarks, look the be, very robust. you soft. if in choice orders continue robotic-assisted to marketplace.

expect prepared like my a we quarter. feel about so And I And we strong remarks, QX. good in said

Yes, thing Larry. don't to QX. of add Mako guide couple I that's where on really The line that item other. only you're in is products you is. yes, there I'd But right, a want are

we of I see about definitely full when will talk sequentially, in terms will positivity, in improvement. January. see we'll think But that we

Yes.

hips is go Hips up, Mako go one the add. a after percent by to -- of very of encouraged cementless up, quarter, percent seeing comment as Hips we're up, as correlate quarter of go as our total after percent Knees and really with I'm What Just cementless to last -- Knees a total total quarter knee percent of Mako Mako. tends well a

So good robots continue to in and had right QX be vectors Yes, heading will and the some will trajectory. all our delays our those we've customers. getting direction. sold positive these But installed are more

Kumar with [Operator comes Our Evercore the of from Instructions] question next ISI. line Vijay

should we some qualitative Again, guidance, Its supply how not thinking comments capital impact right? these specific on my on does be improves 'XX? about for variables. but that did book that Guys, versus dynamics, supply products chain labor in congrats guess, Any on big print think asking line should I here. dynamics, versus I first tailwind capital those impact, this I'm say a new question hear top good maybe situation order Kevin, chain 'XX? how is guys And here 'XX. maybe strong of? you that we

Okay. of But Sure. in the the of this I'll qualitative, tailwind a procedural in stay first, Vijay, we at land demand. year. seeing are time

world, recovering expect in slower modest are the little regions. maybe that our moderate saw, tailwind, Hip in Asia But around into and a or good given think XXXX. with as you even fourth continue and Pac COVID, a procedures Knee growth I XXXX So that we in tailwind pretty throughout quarter what into happened the with business will very and

So tailwind. positive one that's

System the the number a timing But defibrillator, and the it's have camera we year. it the a launches. of products. little launching: when because in And the part part we've the and I products around year; camera XXXX life products. on a kind early We of of but in early middle sorry, within we're of PMA a product launch part less towards those massive of X of call super power new cycle pack a System -- tool know year latter the got product, the then X certain which year; are what big, those the happens of perhaps new important you is MedSurg

Insignia We way Hips which the is of have stem, launched. less XX% the than

launches all but know these years the tremendous sets multiple momentum. implant take field, get into that the You out to

numbers steam Hip forward. that Insignia looked will have because the and our competition good going gain saw You relative of Stem, last to the continue couple of just to quarters

been the a the along gives we've us lot a say care. we we for, in order chips. different mentioned, component. that But demand Orders customers. positives. hit are securing the sometimes those get Glenn are have many And canceled. sometimes of resin, supply small What it's to to to products. willing securing number in not it's a as side, cases, orders wait a miss it's being big, the -- can have especially We sure customers backlog that on and is confidence book That of that We've the are been we emergency know just there. been big So this just of make I'd

So there's getting it's but getting better, It's been spottiness. better slowly. kind of

demand of the new divisions. going momentum and next some way the for just few. But those first our products, mention extra fight will & we'll absence us Ankle. of sorry give a in probably of year. picked of the next sort in new Foot So just the I half my hip, I products into -- tremendous through the didn't shoulder, year. But that

And -- ones, are those so there's the of the of ones. a some lot sort big but of other

of we helpful In balance That's At about what basis think gross basis is percentage maybe for capitalized color, impact, how you. is Glenn, capitalized? of margin 'XX? EPS FX rates, that should points on current the being the Kevin. for impact What one XXX XXX points being sheet?

on took next -- QX, really off guiding the look without Okay, XXXX, in I you QX. happened at but of Vijay. of year, Vijay, if sort in sort overly think what rates rates, the FX for

we look And the in for spot for specifics. I still then future you it so buys, the the pretty making rates inventory, frame. comparable X- materials give have you of materials to a usually of your for are to in won't that And remind impact piece, an that year will as QX, and over you time big extent then utilization capitalized will I I modeling But -- of the QX, is terms next X-month variance raw we put get those sort next think to at year. raw just relates

And will into in of -- So of more to into we're still a into, QX some that -- feel QX well extent that still to of little situation say, next in a year. gets well. the Kevin's XXXX, comment, QX as we'll then bleed that this bit spot-buy-premium

from question with Bank. next Chickering Pito Our Deutsche comes

capital The of orders understand And first new orders. between and there's year one fill strong is orders give backlog and the orders the the this messaging demand. throughout to very a about has canceled consistent that been take because

orders you your can seeing XQ specifically talk on guess, you're I XQ new during against for and expectations? what So

continues you would businesses, capital I be at the it if look to it's you of order Pito, some strong. back jump the point Jason. around here. And I'll book. very commentary to Yes. in our

for Instruments a Kevin fourth the so and said as certainly Medical as quarter expect the similar fourth we to to strong in we comments recovery look around with Medical quarter quarter, well. another Instruments, And the and

their QX, a who orders Endoscopy, quarter. strong even And very in well grew as they the had

quarter QX. strong will also another they have So in

We're So not it's seeing of that which is our I I've mentioned. the really And portfolio know strong. kind heard ordering It's it's orders. seeing not and sort haven't across canceling things We're very we're then that something of tenures slowdown, it. capital just not in customers canceled. demand in some seen I very, having my where other companies -- a our here, out orders

we good position. about feel So very our

have orders They continue slowed Our not down. just grow. to

with Just which enjoy one example, little ProCuity integrated that now really Vocera, our I we've on bed. is

alerts the really the from this. already falls the momentum, for building. which And our getting days, gaining interoperability badge, steam. Medical So the energy bed just to now and that provides this just from customers second early the the customers of year And and kind is actually launch. Vocera, with powered an It's growth of our goes it's wild extra this of bit strong it's quarter, feedback And business. that its to really with to really we're positive but straight ProCuity on showing again,

this enough. a quarter. weaker Fair then follow-up Okay. And a Neurovascular's on touch

how market versus that Just shortages? competition curious, is versus supply

seen -- Thanks. it. sure reduced kind slow aspiration of year Yes. in the a a as been The competitors this number There's most well theories why of slow. probably out of in has those U.S. clinical has Neurovascular, But that's requirements the as there in say requirements stent categories. new are I'd retrievers. in both the market FDA market exactly itself why. not to the We've there different

market a the patients because COVID And the strokes U.S. to But market a exactly It's down of slowed why, the So number been issue part which of hard are had know have players it's in maybe new the of soft. there having mortality these definitely effects has it. would that has are COVID. of of but that stroke not affects some

think portfolio. pressures. probably OUS Neurovascular, reverse bigger is been business in kind also U.S. of one the much has I mind of but that the that the of our rest It's some way. competitive us, our the smaller has business the there that than are that's always portion, in Keep for

noted the for bullish long-term of feel treating So agreement we the just prospects acquisition business. continue tuck-in a remarks, as about And on in space. have in opening this small to an intraocular only people signed we've strokes. my I We're completed that percentage a

Our of next Sandler. question comes with Matthew from Piper the O'Brien line

The going of have something then restructuring other at EPS first that just can pull drive be Is that levers for the that below to line you you to to help you the about. the kind on year? with year, that's growth? specifically And talked next is next to EPS growth are one do on that impactful that help

Well, second round increases. a mentioned, are as to those timing EPS contracts businesses off. growth, fact, their of having on as there'll be roll in combination of really And appear And some taking price price. the I of start

clearly component. are these So restructuring price The is actions is one component. -- very Cost reduction targeted. another

this year. year. that see accelerating We'll see some for next we So that and those We'll anyways share it's in really We're just some of part per it will our next around have things sure were going do of of earnings into impact to to year, improve early processes. our an activities.

we sort to it's loan. pay And of opportunities down -- Matt, below in the line, if you quickly at how term there related are the some an look taxes,

be expect then So And there. although taxes interest given -- pickups of there is expense, would those relative we've any some could the to steady been be as rates. surprises, I minor don't sort

Okay. with the go sorry, on -- And then ahead. new

I say last was one before. comment going to

from the we benefits products launched. mix get new will that We

which So P&L, that see earnings. get helps that -- definitely benefit you through that's but our and one in the thing we'll won't the line, price to

Okay.

having spine then maybe I -- step expected one the you to same coming about pushed shoulder one then, coming think two about for specifically And these like time Day Kevin, that. at And and of following commentary ago, than say indications a a of Analyst bit Spine out, hear you kind year. you next little now appreciate later because the I I back shoulder maybe before? Is didn't X.X is talked Mako think, getting years spine I out this Okay. with the and new Mako X more year these year.

beyond? and something this is like we So should more 'XX expect

Yes.

what, the at of or BLUEPRINT the kind Spine's lines. implants upcoming not its line in pace, expect some in after with moved we is adapt to One ready ahead we're we reason expected know moved year. calls, now. give that, The out same that a the things. had back I it because you there's in marry of now, perhaps the of But and time that January two shoulder a bring time You Mako. to little and next and give software time wouldn't bit will one one you next kind Tornier to they're coming the

we They're certain to time wanted shoulder on Stryker implants. we market-leading the were switch line the implants. a Tornier but to So with implants,

So we But of moved Spine had that has delay been forward. sort to one.

a projects feedback So for the to we as We team is show two Mako. and that. going well we've terrific the has us. pursuing: some answer on are be done the surgeons, to Mako positive that one started as very, received had Cardan We've very job. already

So we're excited.

And you possibly as so hopefully, more again, specifics it. the timing, as I'll January, on early give

on We're one both come for actually other. out FDA. in the projects. had As first proximity be with the more close -- before, to why those first Hard hesitant we've lines which time of lot I'd But confident. until challenges of pretty that good say sort a know on feel you we we're to they'll trajectory me each complicated. you know, a And That's we've meetings robots pretty had to good of very will give are overcome. we that as

Joshua next with Cowen. line from of question Jennings comes Our the

ortho of your as Just there I like of pricing. I just procedures the and pace the terms primarily in better for of but of Any just orthopedic in migration to business, sense bottleneck your on updates Or be just basis joints. well. are ASCs. into sense. to thinking you're pace a is we seems some that robots? in sounds traction a aggressive? wanted think question is turning seeing get also XX just too on the Mako ASCs pricing the And maybe wanted about what just opening, ASCs terms to points of start receptivity better But follow-up that positive? guys headwind overall the Should in price to It be get it's with And initiatives. on wanted XQ. ASCs getting just

take I'll on the Josh, it's one first Glenn. pricing.

that. impact impacting not terms we're Pricing all, the making mostly big educating side. on ortho relative happening of are that That's things what's around of some there's mind, that under and in our not to sure raw big of businesses cost like MedSurg. of going materials as obviously some first too, say think, to to in is initiatives of I most contracts. sort we're having the on customers of us pricing, Keep

those of And up for contracts negotiation, so that those into this with come enter relative pacing a as can lot to of we is customers. sort

seeing we're far, progress. good so think I

But relative to at lift a to premium that bit expect to We us I comment progress may pricing of a reflected are not is you, also out are legacy QX. products call won't tell the products continue released yet of Kevin little new good into And would to things released. that be most year. see price for will the in released give that what next relative are guide a I that price. that the new one made

us a bit well. as uplift little that will give of And so

related to continues expectation. to And our your our -- Okay. on we question ASCs, offense exceed

the prior your our talked ASCs large these mark Mako new themselves gives crossed -- I a a We've to for us of gating joints and we accelerated. a love ASCs. our rate, for trend factor provide another sort a position. life XX% is disposables in more we bundle ASC. done is us are easy and the COVID construction expect really we will hospital ASC of preparing I up, And rapid received. breadth had that has point, But not position. orthopedic system having keeps refurbishment very a as and capital steady includes every But It's in that that time of giant implants a ASCs. the advantage. in It to the to leading but continue. enable started to at to almost Makos, all of now make that are portfolio, And that, it's of for And puts procedures. that well Just included, the Close The going the said, half these climb. deals and just them to win been has we that a

Matt with of Our comes next Miksic Barclays. the from question line

care sort impacted bit covered maybe terms feel wanted I a Vocera that little a a with impact you to maybe, A how much I a too is any early to in had focus have made just to just and exciting. on lot of which made, of getting -- to the and in as had margins for connected of see spot say? quarters. the to purchasing just prices -- of do those purchases high first it just hit And back -- to And bit shoulders then think the some follow-up. interoperability great And you the some margins is quarter in spine Mako what comments -- of color been around Glenn. are get here. buys you that love I comments or better I'd we previous is color and on mentioned But third of whether which easier, or little watermark one around

I Yes, things. I couple -- a think Okay. of Matt, mean

sort even of inefficiency on cost operations. the seeing on then some And other in the sort of that we're we're of sort solidly the that basis rough kind half terms, being grounded spot tempered you the As and inflation paying somewhat half guidance, premiums by is the the within our discipline of really driven points, what about buy side, is by of purchases. think those in XXX

supply. was what On better that saying we visibility to I buys, the our to ability spot is I now acquire think have

to are. not terms as as think into costs those much seeing were moderation, as what in we hoping We QX we although see, are of I some entered

situation, we're difficult customers. commodity get a having expedite our So through freight, not use can cost supply prices do chain to that are to manufacture that this the just we're lot to in quick in versus QX on a in down we side, them paying. as ocean significantly materials increases they're spot a wanted that so then down lot more I we that to Because inflation coming expect which is increases of we're in things as coming lot out And come airfreight flowing either. raw of, labor, and nor -- say, purchases will in

feeling that type are And in the so are those inflationary that of number. that things we're

particular, And headwind -- then Maybe highlight of maybe if just QX. one QX, dynamics, which the mentioned improvement. or ways That's in to in not your are some Got could you it. it QX like a that, hospitals everyone of QX was around you in if the a for than of improve you companies. seeing helpful. is of And sort that some of seeing you seems bit the product QX. mix challenges in to that some look businesses in better expect a from staffing And other

think color you and getting its happening, needs different how wondering and help priorities unevenly that you're just exactly what versus understand that in different you're So of procedures. procedures seeing what maybe it's happening how folks would kind about what's other is Any settings? of and affecting

Okay.

saw me might and of we QX how we in play in the relative to that question part first that take think what Let and mix out QX.

fairly Instruments bit a little look and profitable mix. of proxy business and where that's was at we down, a us. down, NV too highly sort sort us. growth was of can a for you think profitable as of for felt highly is sales the also a for business pain that I

sort so proportion at somewhat a us line. not the being margin hurt of of And those normal our sales really

visibility to Instruments NV, as supply performance little out so I it's we a that I we'll see do moving think year. expect and up the a wrap of Instruments good into good has QX, of bit procedural-based. know capital quotas. of sort a different. their on there's It's very NV the backlog is not very I is hitting focused NV out and year But and not that orders. finishing

NV improvement we'll see out think And of so well. as some I

Yes.

on point mix. last Just

Stryker. is expect and hit the for build, seeing a it's start by I a stronger and that think well. highly started. been they they've markets business big, as already -- of And delays, one big that's profitable and do COVID We're to Australia

needs. -- improve and the talking I'm your in QX but of about to I normally recovery we're are going they're and U.K. We're robust are element the very starting seeing off you QX. sure versus physicians which in that's how And it, bit other seeing who different There's we're get those not than more. question, think clearly then and procedures got mix would, summer COVID I more big recovery. the the took in So another totally were coming busy operate -- a see to now, maybe little lists, time given off some took waiting they and

challenged, they're them, operate. been more but for available And the still is gradually a staffing bit staff is little going much it's As to improving.

kind much growth I be next to bit more has of don't see into honest. down the needs year. there, we choppy, as Spine little robust it as So And did. think a went going been

little Omicron the you more spine everything If look that at -- a were resilient. and variant procedures still bit

Knee. comments could portion I I I seeing similar that with related that so patient there impacting And market the might the comorbidities, to in these quite Neurovascular saw in TAVR And be soft. where as wonder that little of that's all market that bit be we market. if talked about the and the extent at stroke not U.S. pop something profile being mentioned our a that the Hip already ischemic and some is -- we're one the the soft, And same are

answered part -- question. of that's hopefully So your that

Our next from comes Wise question of line the Rick Stifel. with

me. for questions two Kevin,

a on little Asia be the China continuing growth we've end Pacific First, about you pressures and -- touched bit, and but to -- those it 'XX. that volatile of continuing negative talked being through

your things thoughts going to at Just, you at as Just assuming setup high in there? look general, you for next that landscape the what's you are better? a -- Are high-level again, level, get are the year?

had a a certainly QX. COVID pick expect high up And of impact We're At a Japan to delayed Sure. nice really Sure. will quarter Asia in Pacific. get in has Australia it. had seeing lot we a quarter. level, already this better.

Some of are countries ASEAN the improving.

So be Asia Pacific year in next I better year. overall than do to this expect outlook the

we, emerging business. negative. Our at India the pretty really side Neurotechnology But finally, double-digit past. driving to next emerging really camera. of negative growth well It year. and China our that of had of going robust many year as with least had this And momentum America side Even really in share year. driven started know, challenges being you the in our orthopedic performance Europe, markets tremendous strong after as terrific -- growth the continue volume-based spite build in by Mako in slightly tremendous as was year. into well we're had by in the has business as this think procurement good as Africa, years, gaining on That's Latin MedSurg where our and a we've really momentum XXXX driven should of really really I And

for to click. So international story starting is Stryker I say would the

XXXX, not international expect since years the as going the growth organic should As you cement first do frankly, forward. CEO. outpaced COVID and happen did in my that seven to I really U.S., saw tailwind has our continue. And that that And

sort question, great of I Great. usually perspectives on big-picture other one stuff. you have of And mean this Kevin. kind

around particularly going do or this what Stryker? Is hear you it to can toughest just some can answer does the to past this of take the boring thinking still to that. the is you topic? does you curious take industry steps about wait? resolve to you're for you are supply how, industry. But I'd are thinking it resolved? get how to get for what stop to questions And these where how of just get when, so you have resolved? Or chain me it needs are Appreciate One When be -- tangible for that issues, there it that chips,

where, Yes. Look, points XXX. to misestimated. on, early been to we is had XXX pressure. this it's honest, extremely Glenn And We it's be year would now you has question. thought of I were XXX saying going frustrating unlike I've basis great have any we year a tell to

did we something predict. that's been not to It's difficult call. So

you new-generation trips. of think is move so to one supply which XXXX, as quite the products, we're is I new chips. System as using the to X high kind And we we move really actually availability move we're steps to taking, of for as new-generation that is exciting, and

so to can our actually products, new supply. ability it secure And migrate have we to the helps faster

teams chips. is a pushing pressured, that's are our through products, hard frankly, really chips. emergency we these older-generation so we those goes whole shift It products chip regime, are being so the older-generation to why out. And the Because care PMA defibrillators R&D emergency newer to able challenge their And regulatory swap just primarily. care because our is, and to can't be

with availability. So have kind we've with that our the faster we new like faster been problem can a migrate chips we of another a secures supplier, resins. It's moving to And chip products, the target one as new even secured supplier. things

And really it's better, and as so that it's because problem. Rick. us get very And chips healthy but getting year, products, aren't tough slowly a we the been will new unusual launch new

electronics. go clear. crystal through you still that's what, couple this of choppy, a moderately they'll don't I total problem qualify be frankly, I the Our it's been better we were right it's but and in And to now, And year. stable. products. really But they going then not to to start getting new know been this were right the probably is the of be really the credit old because getting -- growth, the camera I But for little good will how of actually of able quarters a year. that lot it think they get that haven't sort a I Really, year. that's looks we're know our business, it's think by scramble. And drive just And able as but things that middle some the team we're a ball, guys P&A, another give soup to we Endoscopy hopeful

with Stanley. Next question Drew Ranieri comes from Morgan

and gaining ProCuity, it's there on about Glenn, and Kevin, of your the your just momentum comments launch, maybe, launch. second Kevin in you're bed year

really, you Should Just update are acceleration meaningful into the then is now an replacement should us launch could if progressing. you have ProCuity what cycle. into you the a kind that ProCuity have of launch? And bed? market share, expect how Vocera integrated of where we curious that the give on terms in And

didn't and We've Vocera product, or but orders. already strong, Vocera strong them the is strong, I'm strong gotten were wasn't a been And in presenting say, and Vocera. a bullish or and on where ProCuity of fantastic system. big showing Vocera, we beds itself. we've It's have ProCuity. Yes. very That very was integrated Conversely, cross-sell let's cross-sell as with capability some we position. this opportunity front bed some already accounts, we're with

third had right which high-class And so I'm now, fast bullish. as as a problem. a It We're to them can we trying quarter. terrific make is

a and going I add so think good just see you're fire. bed, It's the very winning gas to to for to results And is going Vocera ProCuity.

necessarily for that growth thinking cash Kevin's give maybe growth one to should you just about guidance you next next or know you, on for But and I working all. cash contextualize 'XX you're maybe strong as comments Glenn, we And but year about want EPS at what free help us see don't flow free for capital can year, flow improvements?

Yes.

year given kind throw all think to on just free the conversion. flow we're I for now, hate I'd of a in right and variability where out focused cash we finishing are, just up. this number

loan be from I will our be allocate would far mind, to to repayment. rest safe for capital land we still other averages, focus next And probably in our debt historical that for would Keep wouldn't assume we'll and that's term away the think pay next M&A. be year, where it before year. down of we that it

with comes Company. question Our Saxon & next from Needham David

extremities. on start to Maybe

second any you you in I'll the and better launch than seeing NASS. the Guidance procedures is you're or talk how feedback what that can about upfront foot the launch And wondering here. ask on touch Q pricing perform Maybe Just from question early Did And you going? then market. System, ankle and my worse got strategy, can maybe others?

Yes.

but had & entente launches terrific up, procedures did Ankle had of pandemic that had launches. number that growth. market midfoot, had out you in our know, category as picking foot are kind the the So We somewhat, they really The ankle QX. X-foot good of back a of But slow a very Ankle for new highest total have starting a even is clear coming a & where growth Foot we leadership with Foot though within QX. double-digit

much going yes. really strong an feedback in in QX very was provides Very, the U.S. And especially Extremities States, technology had to actually to competition about contributed contributed -- to year. very will performance. because also we're But strong and in to the the feeling well. that So camera, suggestions which contributed faster screws feedback. enabling forward. as novel Trauma really We see Guidance, that the that's positive a growth what good internally that -- the about to than using. That fast Q it the the in be use had and developed be the that future, we will workflow. -- incredibly Mako it's you so simplifies camera second It United the it double-digit very for that terrific Oh, ported that

of sales and the very So picking Q in a good we that's number into System had of QX, Guidance up QX.

is the show we great drills at project providing called exist really doesn't were CoPilot. have That's that the code to get launch. want so to feedback of which some And we able to still surgeons that of in which another far the So, Mako. around and haptic some so to today. market good NASS on because we also kind name, Obviously, internal the feedback,

but portfolio Q without well offer them change requiring comprehensive bring take workflow. speed going additional for have was some and because time very their these So we we the the a pretty enabling us especially Guidance It's that of in technology received, products market, to to to efficiency to Spine.

from Lichtman comes question Steven Next with Oppenheimer.

and on both in follow-ups. Glenn. specifically when of variability we the I a due you're remarks, you more and Medical provide comments Can a And supply. variability? prepared But talk Jason, scheduling just delays one the little challenges. you hospital those the to lot capital, installation about you And related about talked for in couple were environment then seeing A in traditional to about this evening quick color have what a that Mako? and talked

we're capital of a back. show to here our Mako, do things. like and some They'll we of sometimes what But is about I really, talk But up is canceled. just People install. think our have things is you go seeing about to people business, get as Yes. and you comm think have right talking when you'll staffing They'll we're what larger different that think nurses about scheduled challenges, about an if installations. couple even come those right? think I'd beyond Obviously, capital. say to about

variability revenue in and to that installs, the second of that's so piece? delays And and out. sometimes pushed that I'm referring Glenn, terms ultimately, gets

yet. didn't He ask

Yes.

year the -- FX. my for for follow-up wanted just just I Glenn, to So next about one ask Glenn, you variable is

where impact last next rates on about be some the -- based mean talked would about I are you I seeing based year where today the the what rates are of sitting year, mean, versus but you're qualitatively the impact same this So -- year today? as about on versus next this

Yes.

the We'll point. in doing the look to or I that's having a next January, but be roughly be it's, same. math think I if starting at without rates, more yes, other good just year, precise going in basis pretty any

Zimmerman from comes BTIG. question Ryan with next Our

Happy Halloween.

you question, of from of the dovetails past years, been how disruption get just assessment Kevin, you upon my you with with the having in together. disruptions me. Vocera What disruptions. come from you KX the Vocera Just the couple that's past acquisition. how and disruption that Spine of did into which your has terms given a KX the few feel in through these kind what business Vocera? kind wanted where what next maybe have few I learn to of expecting for And a years QX? in are you And we're went and performance And you some is improve

Yes.

That's overlap destruction. That's our Vocera overlap of is hardest learned Frankly, first KXM than integrate. then is sales a me where same selling disruption extremities, Foot an analogous deal say the not kind we reps. Medical is upper reps an gone KXM let an or the different of products. the deal. you where Ankle deal, is Wright that has integration, very overlapping same So kinds have have to the more the extremely which put we lot Vocera you example from well. into & KXM

be going did to to easier So Physio-Control. We is through. thing lot that the a get with same one

that sales And then the disruption you our force. the merged of If ambulances that care, pretty we got in costs the a with we we we got had some defibrillators, emergency we trajectory power growth through remember, thereafter. for first And torrid into year fast. double-digit merged kind and

of not long also on-premise. sales force, we'd move business better versus more will of So for a because of the us but because disruption. the being just for little like have customers to our term will to Vocera the which and bit It's better be cloud,

the a so from offense that quarter two. without This an integration easier to And thereafter, is having to bit should little next to you in we record a the mind lot sing. don't pain be -- It's taking standpoint. have expect just of reps able for or running competing. But this

best were okay frankly rates for alternatives time. distribution a done with next problem us with have a sort compared going of into had dogfight a below-market market. future. expandable of Guidance, the market we good of I one it bit It's bit of spring be think deal Spine. excited It's some growing most expensive technology of that looked got actually And able that to of a about but our grow tough would around Spine, As the going with new to it's Life hasn't Spine a the on in obviously competitive continue to very acquisition at was we very be end deal. we step, able 'XX, KXM to been play It's to been It deal. a to hang now in. we a not I'm kind the road have the solved deals, Q we been We where innovation. map, not in but market our already through rates pretty year, about a we've enabling our

as little starting bit we're momentum, a launch feel of to new Monterey well. So our

help do Spine long we're committed have but So Mako And to term. robot a as starting we But having of will a problem. are solve to We this problem. feel that a with not bit project momentum, it's that start certainly the roughly QX, then to is most growth Vocera challenging market for zoom probably that. for should -- after expect all. to flat But don't it have of clearly, and year-over-year you Vocera me, will sales QX,

just That's more in very if quick. squeeze helpful. And could then one I real

of is XX about of quantify But this. total, of think mean? to order don't -- you strong, does extension delivery, normal the and supply days about chain. still are Glenn, extending because the XXX product be few to XX after? talked I book, dynamics want maybe of I order of if quarter. a know us today Just it terms delivery? some mean guys, from that it capital under these which what if understand guys the just the months you terms we pulling of now days cycle days circumstances, this Is beyond In and tends you of mean a kind the of it just I to or the the as And receipt, some upon delays orders in through order quantitatively were takes to you help

or being for what is I to time, first it's Ryan, of product I'll type point it terms vary to cycle, moderate my right, a right? off, cycle, product how prepared it's And back delivery this candidly, the longer of by here. in is. in much In of the is, some say terms remarks jump you would tailwind Jason. that I'd going

to but impact quantify vary. And it going in does certainly there, not the of certainly so we're terms

next with Matt question from Our comes Taylor Jefferies.

I I'll about taking just ask comments that and perhaps kind time off in was to burn interested your your really the book. guess. order addition a follow-up theme, backlog procedural of to on I in some

procedural XXXX greater backlog, are that over us this your are back you lesser those that or more than predict come areas about where I think the and as, guess, could just up see help a, how to you just time? at take to things And So there you royalty see is of into portfolio XXXX? actually runoff looking could what

Yes.

are Knees I Stryker the not think a thing. think and where Hip areas I it's just

momentum on to think you are -- I big surgery multiple can think have market available they going competitors, their business the kind tailwind surgeons aren't of you're and why favor. be just These But spike be I to need that to see see that will to staffs a be kind these I those our population it And doesn't don't going That's for improve be going I share It's I osteoarthritis return will weekends, -- demographics think think to sustained are normal. itself. that robust. and operating then talk volumes. to would on think of to the and I procedures. think going patients just to a going gradual tailwind. play positive Aging it's in and our the a certainly, more not -- that's you're quarters. And

Our Richard with next question comes Newitter Truist. from

team. This the is Sam on for

just Just both ears -- upfront. ask I'll

Just on it, XQ, for is X% And on to R&D. how here. there XQ question year? room with points directionally restructuring, should improve to XXX-ish into think think the being mean, SG&A about basis that And I in continue we improvement into Should about, similar right call about that XQ? think 'XX? sustainable in the 'XX? level then the we being And that then full should we for about that

only that really On there. Glenn. variable commissions I is is Yes. that significantly just becomes Sam, through SG&A, thing generally, this flows think sales the

put relative So discretionary of continue we the of in and we terms should that control, that procedures controls cost into to kind see place in QX.

proxy. probably And And so then good a several on quarters. been that's honestly, pretty at we've level, R&D, hovering that for

And might is approximate. little But run a down in larger rate variability do the might R&D. be only I QX, think in are that actually so which a good bit little go that that, the a percentage sales make

the For full year.

year. the full For

Is basis? a dollar that on

basis. percentage a On

Percentage.

in full X%, a seasonally our number year. X% good sales that's Keep for roughly, of pretty a QX mind, is strongest.

much going the are in X QX. you quarters than last higher op you've see certainly to seen margin in So

James. comes Our Jayson with next Bedford from question Raymond

the on do China, just the subside I'll be But when expect in deep VBP to anniversary call. quick realizing or dynamics for you? here, we're just you

This is one. take I'll Jason. this

at an are into actually not a going into the kind this next to as we fairly relative So more get is of are NV. sales impact to X%, be But impact, that year right, that China next to about less VBP reminder, less point, the hear there Obviously, And of we're will just go X% than than sales. as but around you'll so exposed guide we next overall year. as immaterial. our

Or does see you impact start quarter? in Jason, here And fourth that in any the will 'XX?

talk timing It will will when start we it we'll but closer, more in 'XX. be get about 'XX. Again,

question next Jeff comes with from Our Baird. Johnson

just Jason, being your follow-up. clarification. Mako installs in quick talked remarks, a Really prepared Just a you delayed the during about quarter.

orders for I Biegelsen's being a question, follow-up you Mako Larry soft. talked think about to in

was installs? the the more happened color exactly on is maybe was a what fourth. in the confidence it little in quarter what And orders, recovering just Just that and third the

absolutely comments my relative installs. definitely were No, to quarter. the do a may strong expect strong comment is made to which Yes. specific case, book, and a a I have order we fourth

There are no more waiting. questions

pass will Lobo Kevin conference closing back for I the to remarks. over So

to sharing for and full well forward all We look our thank in call. joining as results fourth XXXX year-end guidance you our Thank with our you. January. Well, quarter XXXX you as

you That call. participation. concludes Thank your for today's

now You disconnect your may lines.