Intuitive Surgical, Inc. (NASDAQ:ISRG) Q4 2022 Earnings Call Transcript

Gary Guthart: Why don’t I take that one? That was a little bit about local competition and what kinds of things we’re seeing. First, I think the entry of competitors in China is natural and should be expected. I think in some ways, it’s probably a net positive in terms of how people think about the quota. That’s more people advocating for the value of this in the market, it’s probably a net positive over time, therefore, for market development also. In the near-term, early markets, we’ve seen this everywhere around the world with new systems entering. The very early entry is different than the middle is different than the late. And the early, there tend to be a lot of placements, a lot of things around clinical trials, a lot of things around setting up early capacity that are, in some sense, not indicative of value-based or feature-based competition, and we’re going to see some of that early on.

And then after that wave goes through putting your clinical trial systems out, then it starts to settle down, and you see a little bit more of what the core competitive dynamics look like. So, we’re really, really in the early innings with what we’re seeing in China competitors. I expect them to be active and assertive.

Matt Taylor: Okay, clear. Thank you for the color.

Operator: Next we’ll go to line of Anthony Petrone, representing the Mizuho Group. Please go ahead.

Anthony Petrone: Thanks. One, on overall pricing as it relates to just the update here on the multiport system and then a follow-up on procedure volumes, specifically in the US. On pricing, just trying to understand the dynamics here. We have higher input costs as it relates to R&D, there’s inflation, and there’s a heavy CapEx cycle. So, you can sort of, on the one hand, push that through the higher pricing for NextGen robot. But on the other side, we have, obviously, hospitals somewhat constrained here and Intuitive now has a licensing model. So, when we think about an elongated regulatory cycle, how does that influence the pricing strategy on the next-gen robot? And then just quickly on procedures, the lower BMI threshold, the new guideline, 40 to 35, it seems like a big deal. Is that contemplated in the 12% to 16% procedure guidance? Thanks.

Jamie Samath: Just with respect to pricing, I’ll only comment on current products in the portfolio, as you described. What we’re seeing is core costs in our supply chain, the prices we pay our suppliers, the wage costs we pay our production staff. They have gone up, and that looks sticky. We have a routine process we use to monitor pricing on an ongoing basis. We’ll continue that process. There’s nothing that we would highlight at this point with respect to any specific decisions that we’ve made relative to pricing, but it’s something that we’re monitoring carefully through the existing processes that we have. With respect to your question on bariatrics and the change in BMI guidelines, I think it’s really early to determine what effect, if anything, that might have in terms of the total surgical term for bariatrics