Intuitive Surgical hosted its earnings call for the third quarter of 2024, moderated by Brandon Lamm from Investor Relations. Present were CEO Gary Guthart, President Dave Rosa, and CFO Jamie Samath. The call began with Lamm noting Brian King’s departure and acknowledging his contributions over the past nine years. The discussion emphasized that forward-looking statements could vary due to market risks, as highlighted in their recent SEC filings. The call’s replay, along with related materials, is accessible on Intuitive’s website.
Gary Guthart opened with an overview, mentioning robust procedure growth, stable capital placements, and operational success amid dynamic global conditions. The company has installed approximately 9,300 multiport systems worldwide, boasting a five-year procedure compound annual growth rate (CAGR) of 17%. The da Vinci 5, their latest multiport system, launched in March, saw 188 installations and over 12,000 procedures in six months, showcasing features aimed at improving patient outcomes.
Discussing the endoluminal system, Gary highlighted Ion, introduced in Q3 2019. With a current installed base of 736 systems, over 150,000 lung biopsies have been performed using the platform, emphasizing its safety and accuracy. The company plans to expand its reach beyond the U.S. and continue innovating to boost system utilization.
Dave Rosa detailed the quarter’s business performance, noting that da Vinci procedures grew by 18%. The focus was on general surgery in the U.S., with global growth contributions from countries such as Japan, Germany, and France. Despite positive trends, Europe and China faced capital pressures, affecting system placements. Revenue increased by 17%, aligning with expectations. The da Vinci 5 continues its rollout, with 110 systems placed in Q3, showcasing promising efficiency improvements.
In R&D, instrument updates included the 510(k) clearance for the eight-millimeter SureForm 30 stapler. Additionally, the Ion platform saw growth, with new placements in China and Europe. The da Vinci SP platform achieved clearance in Taiwan and progressed in European commercialization. Rosa also cited studies reaffirming the technological benefits and potential of Intuitive’s platforms, underscoring a commitment to advancing minimally invasive surgery.
Jamie Samath highlighted financial performance, focusing on a non-GAAP basis. The key metrics remained strong, with procedure growth at 18% and installations increasing by 15%. While the U.S. saw procedure growth driven by benign general surgery, other markets like Japan and the U.K. reflected high growth rates. Leasing trends indicated a higher preference in the U.S., impacting system average selling prices positively.
Ion procedures grew by 73%, with increased installations both domestically and internationally. Regarding operating expenses, these rose by 13% year-over-year due to higher staffing and legal costs. Samath affirmed expectations for 2024’s full-year procedure growth to range between 16% and 17%, raising the lower end of previous forecasts.
Operational leverage continues, with strong system performance both in placements and doctor interest towards the da Vinci 5. While Europe and China present challenges due to capital spending pressures, the U.S. market remains stable, bolstered by Intuitive’s innovative platforms. The company anticipates expanding facility integrations, which may impact future depreciation expenses. They continue to navigate the global landscape, reinforcing their technological foundations and pursuing new market opportunities.
