By the numbers
Q2 revenue: $2.01 billion
14.5% increase year over year
Net income: $526.9 million
25.2% increase year over year
A faster-than-expected rollout of the new da Vinci 5 robotic surgery system helped propel sales growth for Intuitive Surgical in the second quarter, company executives said Thursday, as they provided early feedback from doctors using the new system.
Intuitive placed 70 da Vinci 5 units with customers, up from eight in the first quarter, executives said on the quarterly earnings call.
The stepped-up pace of placements exceeded analysts’ forecasts, which were tempered because the new system is in a limited launch. The company expects the measured rollout to continue through the first half of 2025, as it builds supply.
Still, da Vinci 5 made up 47% of U.S. placements in the quarter, said William Blair analyst Brandon Vazquez. “Frankly, this was well ahead of our expectations,” Vazquez wrote in a research note. “Despite supply constraints and upcoming system upgrades, management expects sequential growth in da Vinci 5 placements through 2024, which we think demonstrates the end-market demand for this system.”
With da Vinci 5 not expected to enter Europe until 2026, “we view this as a multiyear tailwind, especially if it can help grow procedures,” the analyst wrote.
So far, customer feedback on da Vinci 5 suggests surgeons have found improvements in precision, imaging and ergonomics are supporting better efficiency in the operating room overall, Intuitive President Dave Rosa told analysts on the call.
The system also introduces force feedback sensing and new analytics capabilities.
“We are encouraged by early insights these capabilities are presenting and are working hard to improve production and supply for force feedback instruments and smooth our computational pipelines and workflows for Case Insights,” Rosa said.
In total, Intuitive placed 341 da Vinci systems in the second quarter, and worldwide procedures using the platform rose 17% compared with the year-ago period. The company’s installed base of da Vinci robots increased 14% to 9,203 systems.
General surgeries led procedure growth in the U.S., while procedures other than urology drove growth outside the U.S., executives said.
Bariatric procedures slow
Strength in procedures such as cholecystectomy, colon and lung resection, foregut and thoracic helped offset pressure from weaker bariatric procedures and softer demand in Asia, Intuitive said. The popularity of new GLP-1 drugs used for weight loss has dampened interest in bariatric surgery in recent quarters.
Overseas, prolonged physician strikes in Korea and delayed tenders coupled with emerging domestic competition in China are affecting capital placements and Intuitive’s procedure growth, the company said.
As a result, Intuitive said the low end of its full-year 2024 procedure growth forecast reflects further softening in bariatric surgeries and continued challenges in China and Korea, while the high end of the range assumes those pressures stabilize.