Intuitive Surgical ((ISRG)) has held its Q1 earnings call. Read on for the main highlights of the call.
Intuitive Surgical’s recent earnings call painted a picture of robust growth and strategic expansion, despite some challenges. The company reported strong performance in procedure and revenue growth, particularly highlighting achievements in system placements and international expansion. While concerns were raised regarding the impact of tariffs and challenges in international markets, the overall sentiment remained positive, supported by the company’s strategic focus and strong performance metrics.
Strong Procedure Growth
Intuitive Surgical reported a 17% growth in Da Vinci procedures during the quarter, with significant contributions from general surgery in the U.S. and regional markets such as India, Korea, and the U.K. This growth underscores the increasing adoption and success of the Da Vinci system in various surgical fields and geographies.
Record System Placements
The company achieved a record number of system placements, with 367 Da Vinci systems installed in Q1 2025. This represents a 17% increase from the previous year, with notable performance in the U.S. market, indicating strong demand and acceptance of the company’s surgical systems.
Revenue Increase
Intuitive Surgical reported a first-quarter revenue of $2.25 billion, marking a 19% increase over the previous year. This substantial revenue growth reflects the company’s successful strategies in expanding its market presence and enhancing its product offerings.
Ion and SP Segment Growth
The Ion and SP segments showed remarkable growth, with Ion procedures increasing by 58% and SP procedures by 94%. This demonstrates strong adoption and confidence in these newer segments, contributing significantly to the company’s overall growth.
Expansion and New Facilities
To support its growth trajectory, Intuitive Surgical opened two new facilities in Sunnyvale, dedicated to manufacturing and R&D for the Da Vinci and Ion systems. These facilities are expected to bolster the company’s capabilities in innovation and production.
Tariff Impact
The company acknowledged that tariffs are expected to impact the income statement for 2025 by approximately 1.7% of revenue, with potential increases each quarter. This highlights the ongoing challenges posed by trade policies on the company’s financial performance.
Challenges in Key International Markets
Intuitive Surgical faced mixed performance in capital placements outside the U.S., with financial pressures affecting markets in Germany, the U.K., and Japan. These challenges underscore the complexities of operating in diverse international markets.
Potential Impact of U.S.-China Tariffs
The company expressed concerns over Chinese tariffs of 125% on imports, which could adversely affect its ability to win future tenders in China. This potential impact highlights the geopolitical risks that could influence the company’s future growth in the region.
Forward-Looking Guidance
Looking ahead, Intuitive Surgical provided guidance for fiscal year 2025, raising its full-year procedure growth forecast to a range of 15% to 17%, up from the previous estimate of 13% to 16%. The company expects pro forma gross margins to range between 65% and 66.5% of revenue, despite potential tariff impacts and increased depreciation from new facilities. Operating expenses are projected to grow between 10% and 14% as the company continues to invest in growth and innovation initiatives.
In conclusion, Intuitive Surgical’s earnings call highlighted a strong performance with significant growth in procedures, system placements, and revenue. Despite facing challenges from tariffs and international market pressures, the company’s strategic focus and robust metrics provide a positive outlook for the future.