Operator: We’ll take our next question from Larry Biegelsen with Wells Fargo.
Larry Biegelsen: Thanks for taking the question. And I’ll echo Robbie’s congratulations on a very impressive quarter here. So Kevin, I wanted to start on MedSurg, the new products. Just talk about how the new camera in endoscopy might have impacted Q2? And what you expect the impact to be from that in ‘23 and ‘24? And Medical growing 27% organically after Vocera anniversaried. What drove that? And how did Vocera do in the second quarter? And what’s the outlook? And I had one follow-up.
Kevin Lobo: Okay. You got a few in there already, and you got a follow-up. But okay, that’s fine. Listen, we’re really excited about the performance of our MedSurg business, continues to be really a great segment of our company. What I’d tell you on the endo side is the camera had really no impact. It was a limited launch, really just making sure that the product is performing as we thought. And the test cases have gone extremely well. And really, the full launch hasn’t started. That will start in the back half of the Q3. So you’ll start to see some impact in Q3, and that will accelerate in Q4 and that will even accelerate more next year. As you know, you’ve seen these launches in the past. So it really picks up year one, sometimes even year two, be even higher than year one.
So, we’re going to see a lot of impact next year. There’ll be some impact in Q3, but — in Q4, but really, it will start to ramp. So it’s really no impact in Q3 on endoscopy. And that’s why endoscopy is a little bit softer, had a big comp from last year, too, but at the end of these camera launches, you do see it start to slow down and then it really picks up with the new product. Medical had an absolutely stellar quarter, another 25-plus percent growth, and we had that in the fourth quarter, if you recall, as well. And Medical has really over the past six years, become a large, consistent high-growth division. It does move around a little bit from quarter-to-quarter. But overall, if you look at a rolling 4 quarters, rolling 8 quarters, this is a real high-growth business.
Now I think it’s probably one of the most misunderstood businesses, honestly, or I would say, underestimated business in our portfolio. You’ve got the integration of Sage, Physio-Control, Vocera, which you referenced. But you’ve got new launches, Power-PRO 2 as a new ambulance cot at the beginning of last year. ProCuity bed frame still gaining steam. Sage has PrimoFit. You have Xpedition’s stair chair that I mentioned. And then there’s also a lot more awareness on safety. So our AED portfolio, there’s a lot more awareness. So I would say new demand for AEDs based on all the safety, the LUCAS automatic chest compression product and really a fantastic management team in Medical. So, will I expect 25% again next quarter? Probably not.
But I do expect that Medical will continue to be a very high-growth business for a long time to come. And then specifically related to Vocera, it — both sales and orders ramped in the quarter as we expected. So you remember, we sort of talked to you about Q3 — Q3, Q4 and Q1 of this year kind of being flat after we sort of went through the integration and we said it’s going to pick up meaningfully, both picked up meaningfully in Q2, both sales as well as orders. And so they are also a contributor, but really strength across the entire portfolio.
Larry Biegelsen: Thank you. And just I’ll keep my follow-up really brief. Glenn, the comps are very different in Q3 and Q4. Should we be thinking about stronger growth in Q3 relative to Q4? Just the cadence for the rest of the year? Thank you.
Glenn Boehnlein: Yes. I mean, a couple of things. Q3 seasonally is usually not a super strong quarter, but I think if you focus on Q4 and you look at the comp that we’re up against, that probably plays into how much we’re going to grow against that comp. The big number last year, it was $5.2 billion in the quarter, which is a big number. So, I think what you’ll see is you’ll see slightly higher growth in Q3, and then that that will come down a little bit because of the comp, but I think we’ll end the year nicely, well within our guidance.
Operator: We’ll take our next question from Pito Chickering with Deutsche Bank.
Pito Chickering: Very nice quarter. A follow-up on the Medical. Can you talk about the CapEx environment? How much has changed in the last sort of 90 days or so and possible increase in CapEx as the revenues and costs are looking pretty good for hospitals? And on the backlog, did you guys reduce the backlog in the quarter? And was that a bolus for 2Q and should that be normalizing in the back half of the year? And then also on Microchips, is that should we view that getting better as a gross margin improvement from lower costs or increasing revenues as you reduce that backlog?
