Yahoo Finance Intuitive Surgical Inc (ISRG) Q1 2024 Earnings Call Transcript Highlights: Robust Growth and ...
Revenue Growth: 11% increase in Q1 2024.
Pro Forma Operating Profit Growth: 18% increase.
Procedure Growth: 16% increase year-over-year.
System Placements: 313 da Vinci systems placed in Q1 2024.
System Utilization: 1% growth globally year-over-year for multiport platform.
Installed Base: Grew 14% to 8,887 systems.
Pro Forma Net Income: $544 million in Q1 2024.
Earnings Per Share (EPS): Pro forma $1.50 per share in Q1 2024.
Ion Procedures: 19,500 procedures, a 90% increase from last year.
Ion System Placements: 70 systems in Q1 2024.
SP System Placements: 24 systems in Q1 2024.
First Quarter Revenue: $1.89 billion.
System Average Selling Prices (ASP): $1.39 million, down from $1.47 million last year.
Pro Forma Gross Margin: 67.6% in Q1 2024.
Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Congrats on a very nice quarter. I was hoping you could touch on what surprised me the most was the procedure volume off a really difficult quarter here, 16%. Could you walk us through your view of what's driving it? Obviously, you gave color on some of the procedures, but it's a really strong number. And what gives you the confidence that it's sustainable with the raised guidance through the rest of the year? A: Jamie E. Samath - Intuitive Surgical, Inc. - Senior VP & CFO: Yes, where we saw particular strength regionally was in the U.S. and the U.K. in particular. What you also see in OUS markets, as Brian described, is this continuing growth in procedures beyond geology. That first is focused on cancer procedures, colorectal, thoracic, hysterectomy some early-stage growth in benign in our international markets. So the combination of those things, I think, were behind the performance in Q1. And as you kind of look at then the inputs from the teams as we get feedback from our customers, I think then we kind of reflect that in the rest of the year guidance. Obviously, the guidance is only up a point at the low end -- the high end of the range. So it's something we're watching carefully.
Q: Maybe just as a quick follow-up at the SAGES conference now, and the doctor feedback is phenomenal on da Vinci 5 from our end and the doctors we spoke to. I was hoping you could just give us some early feedback on what you've heard across the field. Doctors' willingness and hospitals' willingness to not just add new systems, but upgrade the fleet and just what you've been hearing. A: Gary S. Guthart - Intuitive Surgical, Inc. - CEO & Director: Yes. In terms of early feedback we're hearing, I think what we were hoping for in terms of our design intent, they're appreciating the improvements to precision and imaging to workflow and the team's efforts on human factors design and user interface, strong commentary on ergonomics. And I think Force Feedback is something that is new and will create opportunities to really understand the clinical implications of force application during surgery. I think that will be exciting and powerful over time. I think it's really hard for us sitting where we are today to predict the depth and timing of a replacement cycle. We're excited. I think that folks are excited about what's the potential of the product. That said, Xi is great. Xi has a lot of clinical indications. And we're going to have some supply constraints here as we work through our launch.
Q: I'll echo Robbie's congratulations on a nice quarter here. Just 2 on da Vinci 5 for me. Maybe starting with Gary, the supply constraints. When do you expect those to be resolved? How long into 2025 will the limited launch last? And what will trigger the full launch? A: Gary S. Guthart - Intuitive Surgical, Inc. - CEO & Director: Yes. Thanks, Larry, there's 3 things that are going on for us. One of them is optimizing the supply chain, making sure that we have the quality that we want, that will, for sure, go through all of '24 in some part of the early part of '25. So that's one. The second thing is we want to incorporate feedback from our customers. We want to make sure that we're adjusting the things that we need to adjust to make sure they're highly satisfied. And then the last thing is we have additional feature content and hardware improvements and other things that are planned that our design teams are going to execute on, whether it's software or other updates or some of the things we can do in imaging, that we want to do as we bring it through. So it's kind of a 3-part set of activities. And we think it's pretty well planned out. I wouldn't expect big changes from our plan. And if there are changes in the future, then we'll be sure to talk about them.
Q: That's helpful. And Gary, you haven't been specific about new indications that da Vinci 5 could open, but can you help us understand what the features are of da Vinci 5 that could allow physicians to do new procedures and why? A: Gary S. Guthart - Intuitive Surgical, Inc. - CEO & Director: Yes. Our first thought here and bringing the system to the market has been to allow surgeons to go deeper into the existing indications we have already. So the indications for da Vinci 5 largely mirror the Xi -- indications that we had already. But we do think that it will invite new surgeons and care teams into robotic-assisted surgery. I think it allows us to deepen our relationship with that customer base, and we're excited about it. In terms of core capabilities, da Vinci 5 has some really cool things. Better imaging that right now today is better and will get better over time, precision and high performance and tracking performance allows for really subtle and fine surgical motions. And we think that's really powerful, and it's a core capability. Faster workflow opens new opportunities for people too. So we do think there are additional clinical indications we can pursue. We are evaluating them. We have not finalized on everything yet, and likely, they will require conversations with FDA. So we're not prepared at this time to tell you what they might be. But as we get a little closer and work through it, then we'll describe it once we've settled our approach.
Q: I wanted to ask a little bit more color on the strong Xi placements and the capital environment even ahead of the dV5 launch. And it sounded like the message changed on system placements in 2023. I think or 2024, I think before it was system placements could be lower in '24 and now it's just choppy. So does that mean there's a chance that system placements are up in 2024? A: Gary S. Guthart - Intuitive Surgical, Inc. - CEO & Director: Jamie, go ahead and take it. Apologies.
Q: Great. And, maybe, Gary, if you could spend some time just kind of a bigger picture question on dV5 and the capabilities it brings to training, being able to practice some of the edge cases helping with proctoring. I'm just curious how you see the impact on robotic surgery adoption and driving better outcomes from some of these dV5 training capabilities that's going to roll out? And how long some of this stuff actually is going to take? A: Gary S. Guthart - Intuitive Surgical, Inc. - CEO & Director: In terms of raw capability, I think that it will help care teams acquire skills more quickly, and it also helps them in the case. You can kind of think of that as context sensitive help
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
