Welcome, everyone. I'm Robbie Marcus, the MedTech Analyst at JPMorgan. Very happy to introduce our next session. We'll have Geoff Martha, Chairman and CEO of Medtronic, present, and then we'll be joined up on stage for some Q&A. Geoff?
All right. Thanks, Robbie. All right. Good morning, everybody, and thank you for joining us today. Before I begin, I would like to remind you that today's discussion will include forward-looking statements that are subject to risks and uncertainties, and so we encourage you to please reference our SEC disclosures. Well, I'll start with saying, look, it's an exciting time for Medtronic. For the last several years, we've been working diligently towards this moment through engineering rigor, manufacturing expertise, and regulatory know-how. And now we're in the fortuitous position to accelerate our revenue growth and our earnings growth. Today, we're going to talk about four key areas, accelerating on both what we call our generational growth drivers like PFA, Symplicity, AltaViva, Hugo, and through our continuous pipeline of new technologies in areas like thrombectomy, carotid, spinal navigation, spinal navigation and robotics, MMAE, or in our case, Onyx, and many more.
And we're focused and hyper-focused on expanding margins, which will help us drive increased R&D to fuel the future growth as well as our EPS leverage. And finally, we're executing on strategic portfolio management and capital allocation. But let's first take a step back, and I'd like to remind everybody of Medtronic's key businesses today. Medtronic is an innovation-driven global MedTech leader, and our focus is on high growth, high-margin opportunities to improve patient lives. We have a diversified portfolio in cardiovascular, neuroscience, and medical-surgical. And you also see our nearly $3 billion revenue diabetes business on the page here, which, as announced last May, we intend to separate by the end of the calendar year via an IPO. So in total, our three focus areas represent a $100 billion market opportunity, and we are well-positioned to execute within these critical areas.
Now, this slide has an important message I want to make sure we bring home. Over the last several years, we've been putting the people, the processes, and the tools in place to form what we call the Medtronic Performance System. It's changed the way we execute, enabling us to deliver on our promises commercially, operationally, and, of course, financially. We've addressed things that have historically held us back, held our performance back. We've transformed our quality function to yield even greater safety outcomes. We've optimized global operations and supply chain, for example, consistently achieving now 5% gross cost COGS improvement, and our backorder levels are at all-time lows. We've built the foundation to make all of this sustainable as well, and you'll see this start to flow through in the coming quarters.
We've made the hard yet purposeful decisions around portfolio management to drive even greater focus within the organization. Today, as we sit here today, we are focused on growth and innovation. In the last 12 months, we've unlocked four new multi-billion dollar opportunities while accelerating our revenue growth. We're on track to deliver well above $2 billion in revenue for CAS in fiscal year 2027, which we'll talk about a little bit later here. To follow, we have a strong pipeline across the enterprise. With the top line coming into place, we're now relentlessly pursuing margin expansion. You put all this together, we're driving greater effectiveness across the entire organization to fully realize the benefits of these big new opportunities.
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Okay. All right. Great. All right. So getting back into groove here. So we're delivering this slide. So now we're in a position to execute on these four areas. So we'll discuss the details of each of these four areas in a moment, but all of these are devices that are approved in the early innings of launch, and each represent a $1 billion+ revenue opportunity for the company. And this is going to fuel our growth for years to come, and these are core markets for Medtronic. So like I said, it's a pivotal time for the company, and our teams have anticipated this moment for years, and we're well-positioned to execute. Now I'm going to dive deeper into each one of these unique opportunities.
We're going to start with electrophysiology, and specifically atrial fibrillation, which remains one of the highest growth areas in MedTech. Our cardiac ablation solutions business, or CAS, as we call it, represents over a $13 billion market opportunity, growing annually at 25%. We are winning share here in this fast-growing space with our comprehensive portfolio of PFA catheters. We started to see an acceleration of PFA revenue roughly 12 months ago, and now we are on track to reach $2 billion of trailing revenue in total CAS revenue by the first half of fiscal 2027. With the top 30% of the centers performing 70% of the total AF volumes, our teams are really focused on going deeper into these accounts to increase catheter utilization, roll out our next-gen software, and add mappers for greater account coverage.
In this space, we have a versatile platform of catheters and will service multiple clinical needs and differing geographies. So let's start with Sphere-9, which is our all-in-one, really our workhorse catheter. It's a versatile, first-of-its-kind dual-energy catheter with integrated mapping that delivers superior safety and durability. PulseSelect, which is our first PFA catheter, offers a leading safety profile and is a strong option for price-sensitive customers and those that lack access to general anesthesia. So as we look ahead, we're going to continue to innovate and we're going to continue to expand. So adding to our international business, we're excited to bring Sphere-9 to Japan in the first half of calendar 2026, and we're pursuing expanded indication into VT in the first half of calendar 2026 as well. And we're really excited about our next-gen single-shot Sphere-360 catheter.
The EU trial demonstrated strong durability, safety, speed, and clinical efficacy, and it's a very highly anticipated solution by physicians. Our U.S. study was approved last month and will begin enrolling in the trial in the coming weeks. So this is only the beginning for us in PFA, and we look forward to continuing our market-leading growth rate as we march towards market leadership. Let's switch to hypertension. So like PFA, renal denervation is a huge potential market. However, unlike PFA, Symplicity is a new market that we are pioneering and developing. Today, hypertension affects one in two adult Americans, but despite decades of access to numerous medications, hypertension continues to be a problem, causing 50% of heart disease and stroke-related deaths globally. Over 75% of hypertension patients do not have their blood pressure under control, and 50% stop taking their medications in one year.
Now here comes Symplicity. It's a one-time safe and durable treatment that has consistently demonstrated material blood pressure reductions. As I just described, the unmet need is very clear. With over 10 years of clinical data and over 30,000 patients treated globally, Symplicity is one of the most researched therapies in cardiovascular. More than 18 million U.S. patients with uncontrolled hypertension are eligible for Symplicity, and just a 1% penetration into this market represents yet another multi-billion-dollar revenue opportunity for the company. We're building therapy awareness with patients, we're training physicians, creating referral pathways, and activating new sites every day. Looking ahead, we're also innovating. We're already working towards a transradial approach, which we plan to launch in the second half of FY 2027, and we're investigating combined denervation of both renal and hepatic arteries for even greater efficacy.
So beyond improving the current procedure and increasing efficacy, our plan is to make Symplicity synonymous, the Symplicity brand synonymous with the treatment of hypertension. So we're first to market. We've put in the investment, we've put in the work, we've certainly put in the time, and now we plan to capture and lead this space for the long term. Next up, AltaViva. AltaViva delivers neuromodulation via a small device positioned just above the tibial nerve, providing a simple same-day therapy activation for patients suffering from urge urinary incontinence or UUI. The AltaViva device has an expected 15-year battery life, is MRI ready, and does not require sedation or imaging. These are key attributes that make AltaViva a differentiated solution for patients and for the providers. Today, here, there are 16 million patients in the U.S. alone suffering from UUI, so it's a big patient pool.
5 million of these individuals are eligible and actively seeking treatment, and again, roughly a 1% penetration of this 5 million patient pool represents another $1 billion revenue opportunity for the company, so here, education and awareness are the focus. We're seeing significant engagement and interest. Just four months post-approval, over 500 physicians have been trained in just those four months, and this is a meaningful commitment of their time because it's an in-person training, not virtual, and often in a different city, most cases in a different city from where they practice, which shows their interest and just as a good leading indicator about the future potential of AltaViva. We're launching also a direct-to-consumer awareness to reach the 5 million patients I just spoke of, as well as the balance of the 16 million who just aren't quite ready, aren't quite comfortable seeking care. This will come.
The stigma is breaking down. Now let's shift to Hugo, a robotic-assisted surgery. But before I jump into Hugo itself, I want to take a step back and talk about surgery. We have an incredible history in surgery. With over 100 years in the OR as a category creator and leader in numerous product areas, we have earned the trust of generations of surgeons. Further, we're the only company to offer solutions across all surgical modalities: open, laparoscopic, and now robotic-assisted. Our broad capabilities position us to give our customers choice. And this does two things. First, it provides customers with the choice in robotics, a competitive choice in robotics that they've been waiting for, practically begging for. Second, it enables customers to get back to their comfort zone, contracting with a true partner for their diverse surgical needs. So now let's get back to Hugo specifically.
Last month, we announced FDA clearance for Hugo with the urology indication. Outside the U.S., we've learned tremendously from our prior experience in over 35 countries and across 50 different procedure types. And we're thrilled to be launching Hugo in the U.S. and bring this experience with that. We're getting a lot of good feedback from customers on Hugo's differentiation in five areas: modularity for arm range of motion and portability between ORs, open console for improved situational awareness, ergonomics, and collaboration in the OR, trusted instrumentation from a surgical leader, for our Touch Surgery digital ecosystem. And this is a key one. It's unique to Medtronic. Digital is a force multiplier for robotics and laparoscopic surgery as it brings actionable data, analytics, and AI into the OR. And finally, partnership.
Partnership across all modalities: open, lab, and RAS, which is critical to customers as they build and expand their surgical practice. So our purposeful U.S. launch of Hugo is now underway, and we're ensuring successful first experience for our physicians and their teams. Our teams are also working diligently to expand into additional indications with hernia and gynecology and add advanced instrumentation like LigaSure. Okay. So beyond those four generational growth drivers, as exciting as they are, we are delivering innovation across the balance of the portfolio as well. This slide here represents products that were approved and launched in the last two years alone. So products like Inceptiv for SCS or Percept for DBS, NextGen Micra Leadless Pacing, our AiBLE surgical suite for cranial and spinal procedures, Carotid and Onyx for MMA for peripheral vascular and neurovascular. This is just to name a few.
It's not just the depth of the innovation, those big four drivers, but it's the breadth of the innovation across virtually all corners of the company that gives us confidence in our ability to drive durable revenue acceleration. Moving beyond innovation, we're also working on accelerating our earnings leverage. As mentioned earlier, we've made enhancements to drive consistent execution, and now we are starting to see the benefits. We've highlighted our four generational growth drivers, and we've talked about innovation across the entire portfolio, and we are starting to see the growth accelerate. Again, with the top line coming into place, we're relentlessly pursuing margin expansion, which will improve with volume and mix shifts over time. All of this enables us to increase investment into the future. You've seen this in the last two quarters as our R&D growth has outpaced adjusted revenue growth.
And to supplement these organic opportunities, we're going on the offense with strategic M&A, where we're focused on tuck-in high-growth areas that are close to commercialization. So taken together, this creates a flywheel that we've depicted on the page, which will begin to spin even faster as we continue to deliver on this algorithm and execute against our goals. So we talked a lot about the depth and the breadth of our innovation. We talked about the flywheel and ensuring this is durable. We also talked about our enhanced capabilities to ensure consistent execution. And this is combined with our Medtronic mission and our world-class reputation with physicians, with health system executives, with governments, and most importantly, with patients. Look, Medtronic's a pioneer and a trusted partner. So I'll end where I started. It's just an exciting time to be at Medtronic. So thank you.
All right. For those who can't see, we brought up Thierry, the CFO. Thierry , welcome to your first JPMorgan Healthcare Conference. Geoff, between the diabetes spin, which I believe you can't comment on given it's an open SEC filing, but the new operating committees, a lot of the new product launches, there's been a lot of transformation at Medtronic over the past few years. How do you feel about where the business is today, the state of the portfolio, and maybe versus a few years ago, how do you feel about the company's competitive positioning and success in some of these new product launches that are driving the top line?
Look, the short answer is I feel a lot better. I feel really good about it. I mean, I just went through those big new markets that really just unlocked in the last 12 months. I mean, of those four, CASS is well on its way, but still in its early innings with PFA, and we've got a lot of opportunity in those other three that I mentioned. It's not just those, right? I talked about innovation across the portfolio. We can go business by business because it's important. Whether it be neurovascular or peripheral vascular, you're going to see growth acceleration here. Underneath it all, I like the operating rigor that we've put in place.
I talked about the Medtronic Performance System and how we're operating the company and how we're measuring things and tracking these measurements all the way up to the board. So I feel good about it, and I feel like it's durable.
You did put in these two committees that you're running. One of them is, I believe, a growth committee, and one of them is an operations committee. Any early findings you could discuss from them? What are you focused on, and what should we expect in 2026?
The operations committee is really more focused on the margin expansion plans as well as that Medtronic Performance System. It's both. The one that's been the bigger, I think, enhancement has been the growth committee because we are going on the offensive on M&A. It's very focused on tuck-in M&A in and around the spaces that we're in. You need to bring the board, needs to be brought along in that journey, be part of it. That committee is set up with the expectation of focused on portfolio, M&A included. There's frequent touch points, way more frequent than our board meetings. It allows us to move with speed and agility. I think as we're leaning into tuck-in M&A and playing offense there, this is helping a lot.
I don't know, Thierry, if you want to mention anything on the operations committee or anything else there?
I just think when we introduced those two committees, we took an opportunity to eliminate some others, so drive some simplicity in the way the board has operated. I think the one big benefit that I see is these two committees align with the strategic objectives of the company, and they align with the way we run the company on a day-to-day basis, right? So if you look at the operating mechanisms we've got, they're really focused on one side, on growth, and on the other side, on the margin improvement. So having that direct link and that direct synchronization between sort of internal operating mechanisms and the way the board is run, I think is helpful. It's helping us make decisions faster, and I think it was a good move.
Thierry, it's been almost a year. I think you started March last year since you've been at Medtronic. Now that you've had some time to get yourself into the business, you came from an autos industry, very different from MedTech, but you did enact a lot of change at your former company. What are some of the things that you see as the strongest components of Medtronic here, maybe from the CFO perspective, and some of the things that you're spending your time addressing?
Look, so first of all, I want to say that I'm thrilled to have joined Medtronic, right? I think it's a fantastic franchise. It's a great team, and it's a privilege to be able to join the company and try to contribute. Look, when you take an opportunity like this, you do the due diligence kind of on what to expect, and so we had talked about the growth opportunities and the ones that Geoff just went through, and so I knew they were there. I underestimated how impactful they would be, the magnitude of these opportunities, and how transformational they could be for the future of the company, in particular in our ability to use part of that growth and reinvest in the future. The second thing is we had talked a lot about the mission.
And one of the reasons I came back to healthcare, because I had been in healthcare a long time ago, was that the mission side of the business. And I knew it was going to be there. I didn't anticipate to what extent, how deep-rooted it is in the company, and how it drives the behavior towards the customers and towards the patients. To stay on innovation, we had talked about the four big opportunities during the interview process. What I had underestimated is the magnitude and the number of innovations we've got across the portfolio. In the business I come from, you do a couple of launches a year, and it's good here. Geoff just went through all the different opportunities that we've got in spine with AiBLE and neuromodulation with DBS and carotid, etc. It's across the portfolio.
And for me, it's super exciting to see that level of activity and to see the opportunities that it brings ahead of us. One of the reasons I was brought in was to drive margin expansion, right? Because I come from an industry that's super, super cost competitive with very, very thin margins where every dollar counts. And look, I saw that the team has made a lot of progress, that the operations are pretty stable and run sustainably, but that we still have a lot of opportunity ahead of us. And I'm excited about what we could do there. And Geoff talked about driving margin expansion to continue to fuel innovation in the future. And I'm super excited about contributing to that.
Maybe to that point, one of the things that you've announced since you've started is you're committing to investing more in R&D as a percentage of sales over the coming years. I think it's 200 basis points over some in a definite time period, but the coming years. MedTech is a very innovation-driven, top-line-focused growth sector. So as you think about spending more, Medtronic's already in some of these fastest growth end markets. They're also some of the most expensive end markets to be in. How are you thinking about prioritizing these R&D dollars? Where they're going? Is it to existing markets, new markets? And how should we think about the timeframe for contribution of the increased spend?
Yeah. So look, if you look at our R&D spend today, at the end of the second quarter, it was about 8.5% of our revenue. And I think the goal that we've set to ourselves is to get gradually to about 10%. So it's quite a significant improvement also because today diabetes is above average in the portfolio. So when we deconsolidate diabetes, it's going to make the ratio go down a little bit. So it'll give us the opportunity to invest more. So we've started to increase the spend in the first couple of quarters of the year. You've seen it in the first quarter and the second quarter, we've grown R&D faster than we've grown revenue. So the percentage is starting to go up. So from a prioritization perspective, there's, I would say, almost three layers.
The first one is making sure that we capitalize on these generational growth opportunities that are ahead of us, right? So the first block is continue to capture the opportunity in cardiac ablation, in Ardian, in Tibial, and in Hugo. So the first four big blocks. Then we've got a set of businesses that are really high-growth opportunities for us, such as structural heart, such as neuromodulation, for example. And we take these and we're going to invest more in those relative to other parts of the business. But we also have large franchises that contribute significantly to our profit and to our cash generation. So the third priority is where we can invest in R&D to continue to drive leadership in those franchises. And it's mostly CRM, I would say, and CST in particular.
So continue to invest in CRM with the next-generation Micra, for example, and continue to invest in spine to solidify the ecosystem that we've created. So I would say those are the three kind of layers that we use for prioritization. And what we do is we basically rack and stack all the demands that we've got from a funding perspective. And we look at the opportunity that's ahead of us, the payback that we expect. And that's where we're going to put the funds. If you look at what we're doing with diabetes separation, look, diabetes is a great business. It's got great opportunities ahead of us. But the reality is we could get a better payback and a better return if we invest in some of the other franchises we've got in the portfolio.
So the spin of diabetes, that's what it's about. It's about making that business successful on its own, but it's also simplifying our organization and being able to redirect capital to places where we're just simply going to have a better return.
You talked about, you called it four-generational product launches, and I imagine everybody here has heard about them, and we've talked about it for a long time. So I don't want to jump into each of those just right yet, but I do want to ask. The way I think of it is renal denervation is well underway. That's clearly a very successful launch Geoff talked about, in $2 billion in the first half of, I think, fiscal 2016.
Cardiac ablation.
Cardiac ablation.
Yeah.
What did I say?
Renal denervation.
Pulsed field ablation, sorry.
That would be great, though. We take that.
Hopefully, we get there soon. So when I think about pulsed field ablation, that one is clearly ramped up. And that one, maybe some of the investment is already out there, and maybe we start to see the margin benefit come through. When I think about renal denervation, when I think about Tibial, when I think about Hugo and surgical robotics, to me at least, those seem like opportunities that need heavy investment from Medtronic to be able to realize that success. So I guess the question is, is that the right way to think about these four opportunities? And if not, how would you characterize sort of the investment and return potentials?
Yeah. Look, they're at different stages of their development. To your point, CAS is starting to be an established franchise now. However, it's still in the early innings. So we still see accelerated growth. That business grew 50% in Q1. It grew 70% in Q2. And that growth rate's going to continue to accelerate. But we're going to continue to invest in it. The next generation, Geoff mentioned with Sphere-360 for us is really important. And as that business grow, the margin's going to continue to improve. And it'll be an opportunity to have more funds to reinvest in the other franchises. Ardian is very early on in the development. And it's clear that we're positioned ahead of a lot of our competitors there. In fact, we're clearly leading in this field. But we want to keep it that way.
And so we're already fueling investment to do radial access, to improve the performance, to look at other indications that we could expand to the portfolio. And I think Hugo is the same. It's very early on in the development. We just got the indication on urology, but we want to expand that, hernia, gynecology, etc. And for sure, we're going to differentiatedly invest in those areas to capture the maximum of growth. But we can't stop investment in the rest of the franchises. As I said, those are not the only growth drivers we've got in the portfolio. And we have to secure the leadership positions that we've acquired in some other large cash-generating businesses in the portfolio.
Geoff, I think it was this conference last year you first started ramping up your mentioning of tuck-in M&A and being more aggressive with that. You now have the growth committee at Medtronic, as you just talked about, looking more at tuck-in M&A. How do you see tuck-in M&A as part of your overall growth strategy? Is it supplemental to internal innovation? Is it stuff you can't get to? How are you thinking about balancing internal where there is a good amount of innovation already versus external? When do you think we can start to see some of that tuck-in M&A flow through?
Look, I think we've got a pretty robust pipeline right now. So I don't think it'll be. I can't predict the timing of these things, but it's not way out there, right? It's pretty tangible inside the company right now. So a lot going on, and I do think it's everything you said, it's supplemental, right, and we've got some real strengths around our commercial go-to-market and real presence. And we've got to feed that beast. And some of it comes from organic, and more of it needs to come from inorganic things come over the last couple of years. And so that's how we're seeing it, but we're focused on these areas, a couple of themes. One is in these high-growth areas that we talked about.
And some of these are such must-win competitive areas that you might have an organic program and go after an inorganic program and see which one wins or have two organic bets. And venture investing is a big part of this too, right? So we've got a number of venture investments that are in two companies that one of them, by definition, both won't be successful, right? They're both looking at the same thing. So much more aggressive earlier on the venture, multiple shots on goal, focused on the high-growth areas. And also the other theme I'd say is around these procedures. So enabling technology around a procedure like CAS, like ablation, or even around surgical robotics technology around the procedures, I think those are some of the themes.
Great. And when you think about tuck-in M&A, I would generally think something for a company in Medtronic size, something like low- to mid-single-digit billion dollars. Is that how you would characterize tuck-in M&A?
Sure.
Yeah. Maybe to stick on capital allocation further along. So you have internal innovation. You have tuck-in M&A. You have the dividend that you pay out. Going forward, from today on, how would you prioritize your free cash flow dollars? And are there any changes that we should expect moving forward versus what you've had in the past?
Sure. So look, we talked about funding organic R&D first, right? And so again, we've given clear signs of the direction that we're taking in that area. Second priority is the tuck-in M&A that we just went through. Look, we've got significant firepower with the balance sheet that we've got today to be able to carry out a meaningful number of meaningful acquisitions without any problem. And the dividend's not getting in the way of that, right? So there's no change in the dividend policy. It's what a lot of our investors expect us to do. And we're going to keep doing that. But I think clearly what's changing versus the last few years is coming back to doing more M&A. I think we went through a period that Geoff mentioned around solidifying the operations and improving operations on a day-to-day basis. And now we're there.
So we've earned the right to do these acquisitions. And we've got the capacity. So we're going to step up in that area.
Geoff, it was a year ago exactly today that you got the NCD for renal denervation. It got approved. I think it got finalized with the government shutdown in November.
Right.
And so now it's been, let's call it, two months since the NCD went into effect. Any early comments you could give us on how the launch is progressing? Obviously, we'll wait till February to see.
Yeah, sure. Look, the leading indicators are good, right? You've got, I'd say first, there's the clinical results, I think, are very positive. I'd say are surprising docs to the upside, right? In many cases, we're looking at the trial data and not really equating it to the real world. Because what they're seeing in the real world is people that are pretty sick and not taking their meds. And then what happens with this procedure is it's simple, it's fast, it's very tolerable for patients, and they get a pretty quick drop in blood pressure, and it sustains. So the impact on patients' lives and their ability to come off the meds, I think, are very strong and better than expected from a physician standpoint.
The other thing we've learned is that hospitals were cautious about, really, the docs are very excited about it, but hospitals were cautious because of the economics. They've been burned before, and they wanted to see not just the NCD come into place, but they wanted to see a few reps. So they'd say, "Okay, now that it's in place, okay, I'll give you 15, 20 cases to the doc. And then I want to pause and see if I get paid." And so we've had to work with them to make sure they're coding it right and all that. But that is cranking through now, and even just last week, we got more positive news on the NCD, and that went up a couple thousand dollars. Those signs are all positive.
What's happening now is the sites that had the systems that had hypertension programs. They're moving through, and others that didn't have to build those hypertension programs.
Medicare is half the market, I believe, roughly commercial is the other half. What's the latest progress on commercial coverage for Spyral?
I think we have an update. Our last earnings call, we said another 30. We're up to 30 million patients now, so the commercial coverage is happening probably a little faster than I would have thought. I thought they would have pushed back a little longer, but there's just such a strong patient pool here that I think it's going to move the coverage faster.
Do you think this is something that could ramp kind of on par with what we saw in pulsed field ablation?
No, because that was a shift. I mean, that was a shift from one established procedure, a shift from one technology to the other. Here, we're building a new. So I mean, we believe it's going to get that big, right? But the ramp's going to take longer than that.
If only every product launch could be as fast and successful as that, it'd be good. Maybe with the last few minutes, we could shift over to surgical robotics. Hugo just got approval in the FDA for urology. How are you thinking about the rollout here? We saw your competitor take about a year and a half in a limited launch with their new system. We have general surgery approval coming from you in the future. How are you thinking about limited launch versus full launch and the uptake there?
Look, we're starting with a purposeful launch here. I don't know if you want to call it limited launch, purposeful launch. But we're very focused on the first impressions of the physicians and make sure we get this right. We've come a long way. We've invested a lot. And with Hugo, like I said in the prepared remarks, you've got one, it's the first, in our opinion, the first real competitive offering to Intuitive here in the U.S. And so that's one. But two, I think what's underappreciated is our ability to contract across the whole surgical suite, open, lap, and robotic, right? In today's day and age with the economics, the hospitals, the challenges they're facing, the ability to do that efficiently is a big deal.
And remember, one of the key features of Hugo is that the tower that is used for it can also be used for laparoscopic. You don't need a separate room. There's a number of features also that plays into the economics. And then from a clinical perspective, physicians are telling us they really like the way it shines in certain procedures, right? Where they want a little more access to the patient so you can move the arms around. They want to come in at a different angle. Like hernia, it really shines in hernia, for example. So there's some real economic advantages, and then there's some clinical advantages. And we feel good about over time building a nice market position here globally and here in the U.S.
Great. Unfortunately, we're out of time. Thanks for a great discussion. Thanks, everybody, for coming.
Thank you.