“Looking ahead to 2025, we anticipate pro forma operating margins in 2025 to be lower than Q4 due to several dynamics.”

In context

“cash generated from operating activities, partially offset by capital expenditures of $312 million. With respect to the plans we announced on Tuesday to go direct in Italy, Spain, Portugal and associated territories, the base purchase price is EUR290 million with an earn-out of up to an additional EUR31 million based on 2025 procedure volumes. While our primary motivation is to develop closer relationships with customers serving a combined population of approximately 118 million people, we do expect this transaction, which we estimate to close in the first half of 2026, to be slightly accretive to pro forma EPS. Before I turn it over to Dan to discuss clinical highlights, let me address the outlook for pro forma operating margins for 2025. Q4 performance of 38% was above our expectations. Looking ahead to 2025, we anticipate pro forma operating margins in 2025 to be lower than Q4 due to several dynamics. First, as previously stated, leasing rates are expected to be higher than Q4, which results in revenue and profits for related system placements to be recorded over multiple years versus in the quarter of placement. Second, we anticipate significantly higher depreciation expense given recent capital expenditures. And finally, we expect a higher mix of da Vinci 5, Ion and SP revenue, which carry product margins below the corporate average. In addition, from a modeling perspective, I would also highlight a couple of additional considerations. First, revenue denominated in non-USD currencies represents approximately 25% of our total revenue. On a revenue-weighted basis, using current exchange rates, the US dollar is approximately 4% stronger than rates realized in Q4. Second, as we move into”