Intuitive Surgical Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Travis Steed - BofA Global Research - Analyst : First of all, have a question on tariffs. Just the 170 basis point impact in '25. Just curious how to think about that on an annualized basis, any way to kind of break out how much of that is China versus Mexico and how to think about the cadence over 2025, how much of that impacts in kind of Q4 and in Q3 this year?

Question: Travis Steed - BofA Global Research - Analyst : Okay. And then a follow-up on the capital environment. Just it sounds like you kind of called out at the risk, but you're not seeing it yet. Does trying to think about how this compares to like 2022 when you saw it in the funnel versus kind of what you're seeing in the capital environment at this point.

Question: Lawrence Biegelsen - Wells Fargo Securities, LLC - Analyst : Jamie, a follow-up on tariffs. Just on the -- did I hear you say that you're including the European reciprocal tariffs, which I think are 20% in 90 days assumed in that 1.7%. And Jamie, how should we think about your ability to mitigate the tariffs? Just maybe flesh that out a little bit more for us and how quickly you might be able to do that. I had one follow-up.

Question: Lawrence Biegelsen - Wells Fargo Securities, LLC - Analyst : That's helpful. And just for my follow-up, Jamie, on da Vinci 5, it looks like da Vinci 5 placements as a percent of US placements actually was lower in Q1 from Q4. Hopefully, I'm not doing the math wrong. Why would da Vinci 5 placements in the US as a percent decline in Q4? And how should we think about the ramp going forward?

Question: Robert Marcus - JPMorgan - Analyst : Great. Maybe on the first one, the procedure volume was excellent in first quarter, and it's rare to see such a big raise after just one quarter. You touched on it in the prepared remarks, but maybe you could spend a little more time walking through what gave you the confidence to raise this early in the year? Yes, I'll just leave it there, and I have a follow-up question.

Question: Robert Marcus - JPMorgan - Analyst : Great. And sorry to harp on it, but tariffs are a big focus, unfortunately, in everybody's world right now. Just to follow up on Larry's question. It feels like you're taking a worst-case approach here where you're putting all the negatives and there aren't a lot of offsets, or any booked into the guide. You talked about maybe evaluating where you are at the end of the year. What are some of the potential levers you have to offset this? And how meaningful can they be? And when do you think we might be able to see some offsets if you do choose to do that?

Question: Rick Wise - Stifel - Analyst : I thought maybe just to change the focus briefly. OUS growth was particularly robust at 24%. Maybe you can talk about the drivers there, the sustainability of the drivers, the key markets and just what you've assumed in coming up with your new forecast as well?

Question: Rick Wise - Stifel - Analyst : Jamie, just big -- just talking about the OUS growth, the international growth at 24%. It was particularly strong I thought and just drivers there and key drivers and the sustainability of those drivers into the rest of the year and beyond. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 22, 2025 / 8:30PM, ISRG.OQ - Q1 2025 Intuitive Surgical Inc Earnings Call

Question: Rick Wise - Stifel - Analyst : Exactly.

Question: Rick Wise - Stifel - Analyst : Got you. And just a follow-up. You've highlighted recently that increased customer interest in two areas. And it went by too quickly, I missed what you said about after our surgery growth. I just didn't get the number. But after I was surgery and you recently hired a new leader for the cardiac surgery area, can you update us on these two areas? And where are you in sort of pursuing them? What's next? And again, maybe just talk about the growth outlook, if you would.

Question: Adam Maeder - Piper Sandler Companies - Analyst : I'll keep it to one multipart question on force feedback technology. So I guess the first question is, can you just maybe give us a little bit more color around the percentage of DV5 cases that are using force sensing instruments today? Remind us the portfolio, how many instruments have this technology, how can that evolve going forward? And then lastly, I saw there was a post-market study. I think it was 200 patients posted to clinicaltrials.gov, evaluating for feedback instruments. So just maybe flesh out the clinical strategy going forward to validate this exciting technology.

Question: Ryan Zimmerman - BTIG - Analyst : I'll stick to one in the interest of time. There's been a lot of discussion on Medicaid cuts and the impact to patients. I don't know, Dave, if you've quantified this or you're out there, but I'm going to ask anyway, which is if you were to characterize the payer mix, particularly within the Medicaid population, what you could or could not be exposed to? And what potentially that impact would be as the government kind of considers this as option? I'd appreciate your thoughts there.

Question: Ryan Zimmerman - BTIG - Analyst : Yes, that's correct, Gary. Yes. I guess if it were to be amended, what kind of impact would utilization potentially have, particularly for robotics.

Question: David Roman - Goldman Sachs - Analyst : I wanted just to continue along the thread of potential Medicaid cuts to hospitals. And maybe, Gary, you could expand a little bit on the comment you made earlier about Intuitive being potentially part of the solution and not part of the problem. In contrast to kind of the comments that Jamie made or in conjunction with the comments Jamie made about a potentially worsening hospital CapEx environment and some of the factors we need to consider given the external environment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 22, 2025 / 8:30PM, ISRG.OQ - Q1 2025 Intuitive Surgical Inc Earnings Call