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Intuitive Surgical, Inc. develops, manufactures, and markets advanced surgical systems designed to enable minimally invasive care . The company offers the da Vinci® surgical systems and the Ion® endoluminal system, generating revenue from their sale and lease, as well as from recurring sales of instruments, accessories, and services . Intuitive Surgical also provides a portfolio of learning offerings and digital solutions, although these do not currently generate material revenue .
- da Vinci® Surgical Systems - Comprises a surgeon console, a patient-side cart, and a high-performance vision system, facilitating minimally invasive surgeries.
- Ion® Endoluminal System - Includes a system cart, a controller, a catheter, and a vision probe, designed for minimally invasive endoluminal procedures.
- Instruments and Accessories - Offers a range of instruments and accessories with limited lives that require regular replacement, contributing to recurring revenue.
- Service Contracts - Provides service contracts typically entered into at the time of system sale or lease, ensuring ongoing support and maintenance.
- Learning Offerings and Digital Solutions - Delivers a portfolio of educational and digital solutions, although these currently do not generate significant revenue.
- Given your expectation for gross margins to be lower next year due to significant incremental depreciation from new facilities, how do you plan to mitigate margin pressures while continuing to invest in R&D and maintain top-tier profitability?
- With the da Vinci 5 rollout prioritizing single-system placements and dual console availability delayed, are you concerned that adoption among larger academic centers will be slower, potentially impacting procedure growth in this segment?
- The percentage of systems placed under usage-based arrangements has increased from 12% to 15%, introducing variability in procedure volumes; how does this shift impact your revenue predictability and what measures are you taking to manage the risk of underutilization?
- In international markets, regulatory approvals are staggered with Korea approved but delays in Japan and Europe not expected until the end of next year; how does this affect your global growth strategy and what plans do you have to accelerate market entry in these key regions?
- As innovation shifts toward software with potentially shorter development cycles, how do you plan to continue differentiating your platform given the ease of replication in software, and what role will hardware innovation play in maintaining your competitive advantage?
Competitors mentioned in the company's latest 10K filing.
- Asensus Surgical, Inc.
- Beijing Surgerii Robotics Company Limited
- CMR Surgical Ltd.
- Johnson & Johnson
- Medicaroid Corporation
- Medtronic plc
- meerecompany Inc.
- Noah Medical
- Shandong Weigao Group Medical Polymer Company Ltd.
- Shanghai Microport Medbot (Group) Co., Ltd.
- Shenzhen Edge Medical Co., Ltd.
Recent developments and announcements about ISRG.
Financial Reporting
- Revenue and Profit: ISRG reported a fourth-quarter revenue of $2.41 billion, marking a 25% increase over the previous year. The systems revenue grew by 36% year-over-year, driven by a 19% increase in da Vinci system placements and a higher average selling price (ASP).
- Gross Margin: The pro forma gross margin for Q4 2024 was 69.5%, an improvement from 68% in Q4 2023, attributed to fixed overhead leverage and improvements in freight and logistics costs.
- Net Income: The pro forma net income for Q4 2024 was $805 million, or $2.21 per share, compared to $574 million or $1.60 per share in the same quarter last year.
- 2025 Outlook: ISRG anticipates a full-year procedure growth of 13% to 16% for 2025. The gross profit margin is expected to be between 67% and 68%, reflecting increased depreciation expenses and the impact of a stronger U.S. dollar.
- Capital Expenditures: The company plans capital expenditures between $650 million and $800 million, primarily for facility construction activities.
- Product Launches and Upgrades: ISRG is focusing on the full launch of the da Vinci 5 system, with plans for regional clearances and feature releases. The company is also working on digital features to enhance the da Vinci 5, which could improve outcomes and expand procedural capabilities.
- Manufacturing Expansion: New facilities for da Vinci 5 and Ion system manufacturing are expected to open in California, with additional endoscope manufacturing facilities in Germany and Bulgaria.
- Market Dynamics: The company noted a strong capital equipment environment in the U.S., driven by interest in the da Vinci 5. However, challenges persist in China due to domestic competition and government activities, and in Europe due to budget constraints.
- Analyst Inquiries: Analysts inquired about the impact of competition on selling cycles, the growth potential of Ion and SP platforms, and the implications of new digital features on the da Vinci 5 system.
- Q4 2024 Revenue: Approximately $2.41 billion, a 25% increase compared to $1.93 billion in Q4 2023.
- Full Year 2024 Revenue: Approximately $8.35 billion, a 17% increase compared to $7.12 billion in 2023.
- Instruments and Accessories Revenue: Grew 23% in Q4 2024 to $1.41 billion and 19% for the full year to $5.08 billion, driven by increased procedure volumes.
- Systems Revenue: Increased 36% in Q4 2024 to $655 million and 17% for the full year to $1.97 billion, reflecting higher system placements and average selling prices.
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Procedure Growth:
- Q4 2024: Worldwide da Vinci procedures grew 18% compared to Q4 2023.
- Full Year 2024: Approximately 2,683,000 procedures were performed, a 17% increase from 2023. Growth was driven by 19% growth in U.S. general surgery procedures and 23% growth in international procedures, particularly cancer-related surgeries.
- 2025 Outlook: The company expects procedure growth of 13% to 16%.
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System Placements:
- Q4 2024: 493 da Vinci surgical systems were placed, a 19% increase from 415 in Q4 2023. Of these, 174 were da Vinci 5 systems.
- Full Year 2024: 1,526 systems were placed, an 11% increase from 1,370 in 2023.
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Installed Base: The total installed base of da Vinci systems grew 15% to 9,902 systems by the end of 2024.
- Geographic Performance:
- U.S. system placements grew 36% in Q4 2024, while placements in Europe increased 25%. Asia saw a 13% decline in placements during the same period.
- Adoption of New Models: The da Vinci 5 system saw strong adoption, with 174 units placed in Q4 2024 and 362 units for the full year.
- Recurring Revenue: Recurring revenue accounted for 80% of total revenue in Q4 2024, slightly down from 82% in Q4 2023.
- Intuitive will present at the 2025 J.P. Morgan Healthcare Conference on January 15, 2025, and will host a conference call to discuss detailed Q4 2024 results on January 23, 2025.
Earnings Call
The earnings call transcript for Intuitive Surgical (ISRG) provides a comprehensive overview of the company's financial performance and strategic initiatives for the fourth quarter of 2024 and the outlook for 2025. Here are the key points:
Financial Performance
Management's Forward Guidance
Strategic Initiatives
Market Conditions and Analyst Questions
Overall, ISRG's earnings call highlighted robust financial performance, strategic product launches, and a cautious yet optimistic outlook for 2025, amidst varying market conditions globally.
Earnings Report
Intuitive Surgical, Inc. (Nasdaq: ISRG) has announced its fourth quarter earnings for the period ending December 31, 2024. The company reported a 25% increase in revenue, reaching $2.41 billion compared to $1.93 billion in the same quarter of 2023. This growth was driven by an 18% increase in worldwide da Vinci procedures and a significant rise in the installed base of da Vinci surgical systems, which grew to 9,902 systems, marking a 15% increase from the previous year.
The company placed 493 da Vinci surgical systems in the fourth quarter of 2024, compared to 415 in the fourth quarter of 2023, including 174 da Vinci 5 systems. The GAAP net income for the quarter was $686 million, or $1.88 per diluted share, up from $606 million, or $1.69 per diluted share, in the fourth quarter of 2023. The non-GAAP net income was $805 million, or $2.21 per diluted share, compared to $574 million, or $1.60 per diluted share, in the same period of the previous year.
Significant trends affecting financial performance include a 23% increase in instruments and accessories revenue to $1.41 billion, driven by growth in da Vinci procedure volume and customer buying patterns. Systems revenue also increased to $655 million, reflecting a lower mix of leased systems and higher average selling prices for da Vinci systems.
The company ended the quarter with $8.83 billion in cash, cash equivalents, and investments, an increase of $521 million during the quarter, primarily due to cash generated from operations.
Earnings Report
Intuitive Surgical (ISRG) Preliminary Earnings Results for Q4 and Full Year 2024
On January 15, 2025, Intuitive Surgical, Inc. (Nasdaq: ISRG) released its unaudited preliminary financial results for the fourth quarter and full year 2024. Below are the key highlights:
Financial Performance
Operational Highlights
Key Trends
CEO Commentary
Intuitive CEO Gary Guthart stated, “We are pleased with customer adoption of da Vinci 5, Ion, and SP during the quarter and full year. We remain focused on delivering the goals we share with our customers, centered on improving patient outcomes”.
Upcoming Events
Note
These results are preliminary and unaudited, subject to adjustments following the company’s final closing procedures and independent audit.
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