Intuitive Surgical Inc Q3 2024 Earnings Call Transcript

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

Question: Travis Steed - Bank of America - Analyst : Sure. Maybe just a little more on thinking about the dV5 ramp between now and the mid-2025 broad launch. Do you expect to make any more upgrades or ad software? And I'd love to dig in a little bit on the customer actions to some of the contribution margin benefits, contribution margin benefits of dV5 kind of on the early data and the hospital CFOs are resonating with some of that fairly profitable data with dV5?

Question: Larry Biegelsen - Wells Fargo. - Analyst : Thanks for taking the questions. One on international for me, one on procedures, if I may. The Korean approval, I think, came earlier than people expected. Do you have supply to launch that right away? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2024 / 8:30PM, ISRG.OQ - Q3 2024 Intuitive Surgical Inc Earnings Call And just what's the update on Japan timing? I heard the back and forth in the prepared remarks. And how long are you expecting the review process in Europe to take? And I have one follow-up.

Question: Larry Biegelsen - Wells Fargo. - Analyst : Got it. That's helpful. And for Dave or Gary, we've heard you and key opinion leaders recently started talking about new procedures such as appendectomy, foregut, hepatobiliary, and emergent procedures. Could you please tell us where you are in addressing these from a clinical, regulatory, and commercial standpoint? And how would you size some of these new procedures? Thanks.

Question: Robbie Marcus - JPMorgan - Analyst : Congrats on a great quarter. Two for me, might both be for Jamie, I'll let you decide. Maybe first, the margins were once again really impressive, both gross margin and operating margin. Really, the question is how much more room do you feel like there is to go? We're just starting to see da Vinci 5 flow through. And I know there is definitely some depreciation benefit flowing through this year that probably wanes into next year. And we're coming off a very heavy investment period. So I guess the question is, as we move forward, how should we think about the margin progression as you have these new products flowing through and the mix starts to evolve? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2024 / 8:30PM, ISRG.OQ - Q3 2024 Intuitive Surgical Inc Earnings Call

Question: Robbie Marcus - JPMorgan - Analyst : Great. Appreciate that. And then as a follow-up, as we move into next year and you talked about expect more of the trade-ins coming from da Vinci 5 as you move into full launch. There's an opportunity, obviously, to repurpose and resell some of the refurbished is that you get traded in. Just maybe speak to the opportunity there, how we should think about that? And any immediate plans you can talk about? Thanks a lot.

Question: David Roman - Goldman Sachs - Analyst : Thank you and good afternoon, everybody. Maybe we can start on Ion. I think if you look in a variety of public forums, there's been a considerable amount of promotional activity, both in the US and Europe, as you've launched in new markets. Maybe you could help us think about where we are in the Ion launch and adoption curve in each of the target geographies and how we should think about growth in that segment on a go-forward basis? And then I have one P&L follow-up.

Question: Rick Wise - Stifel - Analyst : Gary, Dave everybody, we continue to have a lot of conversations with surgeons who are interested or potentially interested in da Vinci 5. And I'm not saying this is an accurate sample, but just it's our sample. I get to see some of the larger hospitals, the academic centers that they're more waiting, they're waiting for dual console availability. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2024 / 8:30PM, ISRG.OQ - Q3 2024 Intuitive Surgical Inc Earnings Call And they're saying to me, as our smaller hospitals that you're more focused right now on, I'll call it, mid- to smaller institutions, non-academic. They're making decisions faster. They're less dependent on dual console. Is that right? Is that what's going on? And I wonder what -- a couple of things, whether procedure growth implications are affected positively or negative by that. And when dual console is more available middle of next year when you're full launch, I assume do we see an acceleration in sort of multisystem, bigger hospital decision making?

Question: Rick Wise - Stifel - Analyst : Got it, sir. And a quick follow-up, if I could, on Hub. I think it was exciting to hear our in over 2,000 ORs, just help us think through the early experience there and maybe the implications for both da Vinci 5 and again, procedures. Thank you.

Question: Adam Maeder - Piper Sandler - Analyst : Hi, good afternoon. Congrats on the quarter and thank you for taking the questions. I wanted to ask for some additional color around the capital environment and how you're thinking about hospital budgets and appetite for larger piece of the capital heading into the end of the year in 2025? And I heard the commentary around Europe and China, it sounds like there's continued pressure there. Just curious, is that kind of status quo versus the first half of the year? Is it getting worse? And kind of how do you expect that to evolve going forward? And then I have a follow-up. Thanks.

Question: Brandon Vazquez - William Blair - Analyst : Thanks for taking the question. You have a good amount of da Vinci 5 systems out there. I was just curious if you could compare and contrast. Are there any kind of unique insights that you have in that da Vinci 5 installed base, whether it's what types of procedures they're doing or utilization within those accounts are those systems relative to the rest of the Xi base? And then maybe just one quick follow-up, I'll throw here now. Can you talk a little bit -- it sounds like innovation on a go-forward basis is really going to be coming a lot from software. Can you kind of compare and contrast the innovation cycle the speed at which you can launch new features on the software side versus what has historically been, I would guess, a little bit of a longer cycle in hardware? Thank you.

Question: Matt Miksic - Barclays - Analyst : Matt Miksic, squeezing in. Hey. Maybe just a big picture kind of a follow-on question. I get some version of this question often from investors, talking about growth drivers, opportunities in procedure growth. And so maybe if you're looking at the US market and the rate that you're growing now, obviously, where penetration is and where it could go over time, do you expect maybe in the next couple of years or three years to be driven more by driving deeper into existing procedures and categories? Or do you see any sort of new large segments, important segments that you expect to help drive that growth would you say the mix looks like or any color you'd be able to add would be super helpful? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2024 / 8:30PM, ISRG.OQ - Q3 2024 Intuitive Surgical Inc Earnings Call