Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intuitive Surgical Inc (ISRG, Financial) reported strong procedure growth of 17% in the first quarter, with notable strength in general surgery in the US and regional performance in India, Korea, and the UK.
- The company placed 367 da Vinci systems in the quarter, including 147 da Vinci 5 systems, indicating robust demand for their latest technology.
- Revenue grew by 19% year-over-year, driven by solid procedure growth and capital performance.
- The rollout of da Vinci 5 is progressing well, with 147 systems placed and over 32,000 procedures performed, showcasing successful adoption.
- Intuitive Surgical Inc (ISRG) increased its full-year 2025 procedure growth forecast to a range of 15% to 17%, reflecting confidence in continued strong performance.
Negative Points
- The company faces potential challenges from tariffs, with an expected impact of approximately 1.7% of revenue in 2025, which could increase costs.
- Capital placements outside the US showed mixed performance, with stresses in key markets like Germany, the UK, and Japan due to financial pressures and healthcare spending constraints.
- The trade environment, particularly US-China tariffs, poses risks to future capital sales and may impact the ability to win tenders in China.
- Operating expenses increased by 12% year-over-year, driven by higher headcount and facilities-related costs, which could pressure margins.
- The company is supply-constrained on force-sensing instruments, limiting the ability to meet demand for this technology.
Q & A Highlights
Q: Can you break down the 1.7% tariff impact on revenue for 2025 and how it will affect the quarters?
A: Jamie Samath, CFO, explained that roughly half of the tariff impact is due to US-China trade, with about 40% from imports into the US from other regions. The tariff impact will increase each quarter, with a higher exit rate in Q4. The company is waiting for tariffs to stabilize before assessing long-term impacts.
Q: How does the current capital environment compare to 2022, and are you seeing any risks?
A: Jamie Samath noted strong customer response to da Vinci 5 in the US, with leasing arrangements helping bypass capital budget constraints. Outside the US, government budget constraints are affecting some markets. The company is focusing on increasing utilization and expanding leasing arrangements to mitigate risks.
Q: Are European reciprocal tariffs included in the 1.7% impact, and how can you mitigate tariffs?
A: Jamie Samath confirmed that European tariffs are included in the 1.7% estimate. Mitigation efforts will focus on stabilizing operations and evaluating potential changes without disrupting partners or employees. The company will consider investments and operational adjustments over time.
Q: Why did da Vinci 5 placements in the US decline as a percentage in Q1 compared to Q4?
A: Jamie Samath clarified that da Vinci 5 placements as a percentage of total US placements were actually higher in Q1 than in Q4. The supply for da Vinci 5 met expectations, and the placement performance was consistent with normal seasonality.
Q: What drove the decision to raise the procedure growth forecast for 2025 so early in the year?
A: Jamie Samath stated that the day-adjusted Q1 procedure growth of 18.5% provided momentum for the year. The revised forecast range of 15% to 17% reflects a bottoms-up process, considering macroeconomic factors and customer feedback.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
