Stephen MacMillan: What I’ll comment on is the current attachment rate and it’s about 20% to the Panther install base.
Ryan Simon: Yes, and which is growing, but the way we look at it, it doesn’t have to be a 100% because the key is we think about it per customer and so that each customer needs enough fusions to be able to deliver what they need for their products, so we’ve seen very nice growth We’re not necessarily disclosing the exact numbers, but I really like the growth there. Okay, got it. Then, breast, just talk about healthy bookings, elevated backlog, great visibility in the 2024. Just, if you’re going to help us, how much of the 2024 breast revenue expectations are currently covered in your backlog? Or direct visibility via hard orders? Just curious on the coverage rate for the year versus [Multiple Speakers].
Stephen MacMillan : Think about all of it, actually. If you look at it — as you’ll see in the 10-K, that basically we’ve got the orders in place for the year. Now we’re going to continue to add orders to that for further out periods, but we’re in great shape coming into the year.
Operator: We’ll take our next question from Anthony Petrone with Mizuho Group. Please go ahead.
Anthony Petrone: Thanks. Good afternoon. I also send condolences to Karleen and her family. Maybe the first one on Biotheranostics, just up 30% for the full year, and obviously still in the early days, as you mentioned, Steve, in your prepared comments, I’m just wondering when you think about, I guess, the synergy to the breast health business, you have 10,000 gantries out there, and I think there’s two call points really for Biotheranostics, OBGYN and then possibly a little bit in radiology specifically. But how should we be thinking about how many of your breast health install base users are currently using biotherapeutics and how long will it take to sort of extract that entire synergy. And then specifically on margins for Ryan, just when we — that trajectory from high 20s in the first quarter to low 30s, is that linear?
Are there certain inflection points throughout the year? If so, what are they? Is it operating leverage or more in pricing at the gross margin line? Thanks.
Stephen MacMillan: Sure, Anthony. On the first one, it’s a great question and I don’t have the specifics. I think our Biotheranostics sales team has been out there really focusing on a number of key docs. And so as they’re building it up, I do think we back to the early innings, still lots of opportunity to more broaden it with both our breast health as well as even our diagnostics, OBGYN salesforce. So still a lot of opportunity ahead to your point.
Ryan Simon: Yes, and Anthony, on the margins as we’ve stated in the commentary, looking to work up from the high 20s to the low 30s through the course of the year, it should be a relatively consistent trajectory up to that range. As I mentioned on the prior question, breast health recovery is a tailwind to the margins. The farther we get away from the higher-cost chips that are in our gantries as we progress throughout the year, that should be helpful as well. And again, the savings from SSI should be felt in the back half of the year as well.
Operator: We’ll take our next question from Casey Woodring with JP Morgan. Please go ahead.
Casey Woodring: Great. Thank you for taking our questions and my condolences to Karleen and her family. So I just wanted to talk about the surgical business. So growth this year is going to be within the LRP range coming off of 16% organic comp in 2023. Can you just talk about some of the growth drivers there? It sounds like international is a big piece of it. It sounds like pricing drove out performance this year as well. So can you just talk about how that business performed this year and the sustainability into next year? And then just one more quickly on the margins. So I think in 2023 you have baked in something around 200 basis points to 250 basis points of inflationary headwinds outside of that higher semi-chip costs. How should we think about that dynamic here in 2024? Thank you.
Stephen MacMillan: Sure. On the [indiscernible] business, I’d say we had everything working for us in 2023, including the NovaSure V5 launch that did have some pricing associated, really. It showed up more as mixed, but it was a higher priced product. And then I think, frankly, procedures were pretty good. But we fired across all cylinders. NovaSure, MyoSure, Fluent, and then also Boulder and Acessa, and did it both domestically and internationally. I think as we go into next year, MyoSure, Fluent and Boulder and Acessa all continue to look as very good growth. NovaSure will probably be back to flatish to possibly down a touch, but internationally, I think again, we see international being a solid double-digit grower in the year so feeling very good about our positions.
I would tell you one of the biggest surprises to me probably over my almost decade now at Hologic has been the continued growth and the sheer scale of MyoSure as it continues to really grow the category. If we think about TAMs, the total available markets, never realized how big it would be and I think we’re continuing to expand that market. So feeling very, very good about that. I’ll let Ryan take the second part of that. Everybody’s decided I can’t handle margin questions. So I’ll go ahead and let Ryan go ahead and take them.
Ryan Simon: Yeah, so I do want to clarify one comment that we made to Derik’s question earlier. It is actually $50 million in income and $130 million in expense. So I had flip-flopped that in the prior question. And again, with respect to margins, kind of just reiterating the comments that we’ve made here, it is an expectation that we are going from, again, the high 20s to the low 30s. The biggest impacting driver, again, is the breast recovery and moving, again, farther away from the higher price chips.
Stephen MacMillan: Yeah, I think that’s what gives us such confidence in the gross margin expansion to clarify that is, it is looking at the current inventory that’s sitting on our balance sheet that is just going to flow through here on a effectively a first in first out basis so we can see those super high-priced chips that we got early and mid in the chip crisis bleeding through the product lines here in the first quarter. Really, by the first two quarters, most of that will be done. And it gives us great confidence as we continue to work through the year.
Operator: We will take our next question from Navann Ty with BNP Paribas. Please go ahead.
Navann Ty: Hi, good afternoon. I just had a follow up on the M&A. Curious to know whether Hologic came across interesting deals since August, and do you see a healthy amount of sub-1 billion deals? Thank you.
Stephen MacMillan: Thanks, Navann. We continue to scour the landscape. You know, the bankers have been all over the place with lots of ideas. We frankly are in that great position where we can be patient. You know, if I still look at the landscape today, you’ve got a whole bunch of very smaller companies that went public in COVID time that are hemorrhaging cash and in bad shape. And a lot of those still don’t fit our criteria. So then we’re looking at other things that may be a little bit more established but the magic that we have for us right now is given our growth rates, given our profitability, we’ve got a pretty tight hurdle rate that not a lot of things are making it to the top. So I wouldn’t expect anything super imminent as we continue to look at the landscape.
