Intuitive Surgical, Inc. (NASDAQ:ISRG) Q3 2023 Earnings Call Transcript

Brandon Vazquez: Hi, everyone. Thanks for taking the question. Maybe my first one, I wanted to talk a little bit about general surgery, that’s obviously been a nice growth path for you here in the U.S. My understanding is it’s a little less penetrated international. What do you think needs to happen in the international markets to kind of get on that steep part of the adoption curve for general surgery as well? Are they kind of seeing time lines and catalysts in the U.S?

Gary Guthart: Sure. Thank you for the question. On — one way to think about it is that general surgery comprises both procedures that are done where cancer is the underlying cause and others that are benign indication. On the cancer as an underlying cause, we’re seeing nice early growth in several OUS markets. So there, I think that’s healthy, and we’re enthused. I think reimbursements are generally in place in many of the places that we are operating. I think that’s what good in clinical data coming out has been supportive. I think that as you think about benign indications, we’re seeing some of the beginnings of benign indications in some markets, there may be reimbursement work or education of insurers that has to be done for those to progress further. So in that setting, we’ll have additional work to do as it plays out.

Brandon Vazquez: Great. And then maybe last one from me as a follow-up, I think last quarter, you guys were talking a little bit about launching, I believe it was called Case Insight, kind of the software AI platform. Any kind of updates on that end? How are things going so far? And maybe what’s in the future for that program? Thanks.

Gary Guthart: Yes. Thank you for the reference. So Case Insights is our machine learning AI program that looks at surgical science. We have our first installs and first case is going that we had talked about it with you last quarter. So far, early feedback, and it’s super early. We’re really in the early innings here is very good. Case Insights builds on some prior research that we had done with academic centers on something that we have described as a computational observer. So we have some pretty good scientific underpinnings for it. We expect over time that, that program will feed insights into different parts of the hospital’s analytic system from giving specific guidance to learning surgeons and care teams about where they might improve their technique and skills to giving suggestions to programmatics, about efficiency and total cost management, to giving other insights for the company about how to improve procedures in the OR.

So, we think it’s a long-term set of investments around really the science of surgery. We remain extremely excited about it. While we do have some revenue for it, we don’t expect it to be a serious revenue driver. We think it is an ecosystem complementary. And we look forward to describing it more to you as time goes on.

Brandon Vazquez: Great. Thanks a lot.

Operator: We’ll go next to Matt Miksic, Barclays. Please go ahead.

Matthew Miksic: Hi, thanks so much for taking the questions. So, I had one question on – follow-up on kind of the bariatric trends and one on sort of the system leasing effect on pricing. So bariatric, if you could maybe talk about – you mentioned the global percentage of procedures that bariatric represent maybe – just the growth trajectory of that business in the second quarter and the third quarter. And whether that’s something you expect to grow at a similar trajectory or bottom out in your comments on folks getting on the drug for getting off saying a year or two to kind of suggest maybe a longer path to stabilization in that business line within. And then I’ll just follow-up briefly with the question on ASPs, if I could? Thank you.

Gary Guthart: Yes. Jamie, you might speak to kind of what the size or percentage of that business is for us. A little bit of the acceleration or deceleration trend.