Intuitive Surgical, Inc. (ISRG) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 18, 2023 4:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks：

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Intuitive Quarter One 2023 Earnings Release. [Operator Instructions] And as a reminder, today's conference is being recorded.

I'd like now like to turn the conference over to our host, Head of Investor Relations, Mr. Brian King. Please, go ahead.

Brian King

Good afternoon, and welcome to Intuitive's first quarter earnings conference call. With me today, we have Gary Guthart, our CEO; and Jamie Samath, our CFO.

Before we begin, I would like to inform you that comments mentioned on today's call may be deemed to contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our Securities and Exchange Commission filings, including our most recent Form 10-K filed on February 10, 2023. Our SEC filings can be found through our website or at the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements.

Please note that this conference call will be available for audio replay on our website at intuitive.com on the Events section under our Investor Relations page. Today's press release and supplementary financial data tables have been posted to our website.

Today's format will consist of providing you with highlights of our first quarter results, as described in our press release announced earlier today, followed by a question-and-answer session. Gary will present the quarter's business and operational highlights. Jamie will provide a review of our financial results, and I will discuss procedure and clinical highlights and provide our updated financial outlook for 2023. And finally, we will host a question-and-answer session.

And with that, I will turn it over to Gary.

Gary Guthart

Thank you for joining us today. Use of our products grew strongly in the first quarter versus a year ago, helped by positive surgical trends and strong execution by our team. New capital installs were likewise strong as customers built their da Vinci and Ion system capability, capacity to meet demand. Revenue grew 14% on the back of this continued adoption. Some manufacturing and supply challenges this quarter negatively impacted our product margins. This is an opportunity for sharper execution going forward.

Our R&D and innovation engines are making good progress with strength in Ion adoption, progress in our digital efforts and indication expansions for Ion and SP. Overall, our core business remains strong with some near-term procedure and product cost dynamics that we'll discuss today. Starting with procedures, we saw surprising strength in the quarter led by general surgery in the United States and procedure growth beyond urology outside the United States. On a procedure basis, cholecystectomy, bariatric surgery and hernia repair led the way. All our major regions performed well. Standouts included India, Spain, UK, Japan, Germany, and Italy. U.S. performance was significantly above trend, and China is recovering from lows in Q4, though not yet meeting our expected 2023 run rate. Given the first quarter of the year exceeded our procedure expectations, we're reviewing underlying drivers. The return of patients to healthcare providers and diagnostic pipelines post pandemic continues, with evidence of both an increased patient census and some diagnostic pipelines running above pre-pandemic levels after several years of lag. We also see a commitment by our hospital customers to work through staffing constraints to maintain surgical volume.