Intuitive Surgical, Inc. (NASDAQ:ISRG) Q1 2024 Earnings Call Transcript

We have IDE trials ongoing. So we have some national experiments to see what occurs. We know the experiment in Korea has worked out well. We’re in process in Japan and now we’re in the early experience for broad indications in Europe. That should help us generate data and accelerate additional indications over time in the U.S. And I have to say, I think It remains a build for SP, but I’m encouraged by the build.

Drew Ranieri: Thank you. And maybe this is more for Jamie, but Jamie, could you talk about the commentary about lower pricing in China for the quarter? Just talk about that a little bit more and maybe put that into context on if this is temporary, if it’s permanent or more to come and just the overall competitive situation in China would be great. Thank you.

Jamie Samath: Yes, it’s primarily a function of the competitive environment we’ve described with the domestic robotic players. What we actually have now given last year, we qualified a domestically manufactured Xi is actually some segmentation between the domestically manufactured product and an imported product. And the domestic product gives us the opportunity to both participate in tenders that require a locally produced system, but also allows us to segment on price. But the primary impact on China pricing is really competition. And you kind of see that theme broadly with other MedTech players in terms of the impact of VBP. It doesn’t apply in this case, but kind of the macro theme of pricing pressure does.

Operator: And we’ll go to the next line. And that will be Matt Miksic, Barclays. Please go ahead.

Matt Miksic: Hey, Thanks so much for taking the questions and congrats on a really strong quarter against [Indiscernible]. So a couple of follow-ups, if I could on a couple of things that you mentioned, Gary, in your last answer around force feedback and sort of the clinical impacts of optimizing or reducing the force used during surgery, which is kind of buzzing around here at SAGES quite a bit this year in the sessions? And I’m wondering, you know, appreciate always the data that you talk about during the prepared remarks and recent clinical data. I’m wondering, you know, how far out are we going to see, you know, clinical reference like that to studies around the use of force feedback versus not, and also maybe efficiencies driven by a lot of the docs you’re talking about, smoother operating arms and being able to get through cases faster.

You know, is that a year out, are we six months, are we two years out for dV 5 research like that? And again, appreciate you taking the question.

Gary Guthart: Yes, it’s a good question, Thank you. This is approximate, not specific, so take it with some error bars. But, you know, I think what you’re going to see in force feedback study is going to be a progression. You’ll see narrow series, single institution studies come out first that are kind of directional. They talk about what they’re seeing in their own, and then you’ll see a little bit, and that should be the kind of thing that comes out in the next 12 months. And then over the next period after that, over the next couple of years, you’ll see multiple center trials that are comparing in a little more structured way. So I think you can predict the path of the journey, but I think this is something that you’re going to see from narrower input to start to broader input in the next year to prospective studies that start to report over the next year after that.

So I think it’s a build, but I think it’s going to be a powerful build in the end. I think with regard to efficiencies, we’re hearing anecdotal reports already that the surge in autonomy features that are in da Vinci, the ability for them to control their own field and to control the equipment, the Hansler equipment in the room has been really positive and they’re reporting efficiencies already. I think real-world evidence is going to be powerful on the efficiency side. I think that’s the kind of thing that people can benchmark their own cases. We also our data collection capabilities between Intuitive Hub and the My Intuitive app allow them to measure that very quickly. So I think you’ll see the real-world evidence of that build and it will be in the coming months and quarters and that will be exciting for us.

Matt Miksic: That’s great. Thank you.

Operator: And we will go to the next line. Let’s go to the line, Brandon Vazquez, William Blair. Please go ahead.

Brandon Vazquez: Thanks for taking the question. I want to focus on Ion real quick. You had a nice rebound in the quarter there after some supply last quarter? Just curious, do you see a little bit of catch up there or not? And then even as these numbers are getting bigger, you’re still putting up some really strong growth? So, curious where you’re seeing the most growth there, new accounts or existing utilization and how sustainable you think it is?

Gary Guthart: Jamie, why don’t you take that one?

Jamie Samath: Yes, I’d say it was a partial recovery in the quarter — we haven’t completely resolved both catheter supply and the vision probe. We still have a little bit of backlog in terms of number of systems that’s pending, kind of, stabilization of that supply. With respect to where are we placing those systems, it’s actually a blend between existing accounts and new accounts. We still have a number of opportunities for what I call green field accounts. So both are a focus for the sales team.

Brandon Vazquez: Okay, and one quick follow-up maybe on the surgical side. The 1% utilization growth, I appreciate it, off of a tough comp and we’re kind of normalizing. But I think we kind of, we usually use utilization growth as an indication for system placements and then it implies a certain procedure growth as well. Just talk to us a little bit about what you kind of think a below historical average utilization growth in the quarter might mean for those key moving pieces in the next couple of quarters. Thanks.

Jamie Samath: Yes, I mean — go ahead, Gary.