Intuitive Surgical ((ISRG)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Intuitive Surgical’s earnings call delivered a generally positive sentiment, highlighting strong financial performance, successful product launches, and substantial procedure growth. Despite these achievements, the company acknowledged competitive pressures in China, a decline in bariatric procedures, and anticipated margin pressures, pointing to areas of concern that could affect future performance.
Strong Financial Performance in 2024
Intuitive Surgical reported a robust financial performance for 2024, achieving a revenue of $8.4 billion, marking a significant 17% increase over the previous year. This growth was complemented by a notable 29% rise in net income compared to 2023, underscoring the company’s successful financial strategies and market positioning.
Procedure Growth
The company witnessed a global procedure growth of 17% for the year, with particular strength in general surgery, thoracic surgery, and flexible robotics Ion procedures, which soared by 78%. This growth trajectory highlights Intuitive Surgical’s expanding influence in various surgical domains.
Successful da Vinci 5 Launch
The launch of the da Vinci 5 system proved to be a success, with 362 systems placed in 2024. Over 2,500 surgeons utilized these advanced systems to perform more than 32,000 procedures, contributing to a rise in system ASP due to the system’s enhanced features.
Increased System Placements
In 2024, Intuitive Surgical placed 1,432 multiport systems, up from 1,313 in the previous year. The company also saw an increase in Ion placements from 213 to 271 and SP placements from 57 to 96, indicating an expanding adoption of its innovative systems.
Challenges in China
Procedure growth in China lagged slightly behind the corporate average, hindered by competitive and environmental dynamics. This presents a challenge as the company navigates these market pressures.
Bariatric Procedure Decline
The full year saw a modest decline in bariatric procedures, influenced by the increasing adoption of GLP-1 medications. This trend signals a shift in the landscape of weight-related medical treatments.
Expected Margin Pressure
Intuitive Surgical anticipates a decline in pro forma gross profit margin to a range of 67% to 68% in 2025, down from 69% in 2024. This is attributed to factors like increased depreciation, product mix, and foreign exchange impacts.
Regulatory and Competitive Pressures
The company faces potential impacts from heightened competition and regulatory approvals, which could influence selling cycles and market dynamics, necessitating strategic adaptations.
Forward-Looking Guidance
Looking ahead, Intuitive Surgical projects a full-year procedure growth of 13% to 16% for 2025, amidst market dynamics in China and CapEx limitations in Europe. The pro forma gross profit margin is expected to be between 67% and 68%, with operating expenses projected to rise by 10% to 15% due to investments in innovation and legal costs. Other income is anticipated to be between $370 million and $400 million, with capital expenditures forecasted at $650 million to $800 million, while maintaining a pro forma income tax rate of 22% to 23%.
In conclusion, the earnings call for Intuitive Surgical painted a picture of robust growth and successful product innovation, albeit with some challenges on the horizon. The company’s strategic initiatives and forward-looking guidance reflect a cautious yet optimistic approach to navigating future market conditions.
