Intuitive Surgical, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the intuitive quarter one 2023 earnings release. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. To ask a question, please press one and then zero on your telephone keypad. If you should require assistance on a call, you can press star and then zero. And as a reminder, this call is being recorded. I'd now like to turn the conference over to our host, head of investor relations, Mr. Brian King. Please go ahead.

Good afternoon, and welcome to Intuitive's first quarter earnings conference call. With me today, we have Gary Guttart, our CEO, and Jamie Sumath, our CFO. Before we begin, I would like to inform you that comments mentioned on today's call may be deemed to contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our security and exchange commission filings including our most recent form, 10-K, filed on February 10, 2023. Our SEC filings can be found through our website or at the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements. Please note that this conference call will be available for audio replay on our website at intuitive.com on the events section under our investor relations page. Today's press release and supplementary financial data tables have been posted to our websites. Today's format will consist of providing you with highlights of our first quarter results, as described in our press release announced earlier today, followed by a question and answer session. Gary will present the quarter's business and operational highlights. Jamie will provide a review of our financial results. Then I will discuss procedure and clinical highlights and provide our updated financial outlook for 2023. And finally, we will host a question and answer session. And with that, I will turn it over to Gary.

Thank you for joining us today. Use of our products grew strongly in the first quarter versus a year ago, helped by positive surgical trends and strong execution by our team. New capital installs were likewise strong as customers built their DaVinci and Ion system capability capacity to meet demand. Revenue grew 14% on the back of this continued adoption. Some manufacturing and supply challenges this quarter negatively impacted our product margins. This is an opportunity for sharper execution going forward. Our R&D and innovation engines are making good progress, with strength in ion adoption, progress in our digital efforts, and indication expansions for ion and SP. Overall, our core business remains strong, with some near-term procedure and product cost dynamics that we'll discuss today. Starting with procedures, we saw surprising strength in the quarter. led by general surgery in the United States and procedure growth beyond urology outside the United States. On a procedure basis, cholecystectomy, bariatric surgery, and hernia repair led the way. All our major regions performed well. Standouts included India, Spain, UK, Japan, Germany, and Italy. U.S. performance was significantly above trend, and China is recovering from lows in Q4, though not yet meeting our expected 2023 run rate. Given the first quarter of the year exceeded our procedure expectations, we're reviewing underlying drivers. The return of patients to healthcare providers and diagnostic pipelines post-pandemic continues, with evidence of both an increased patient census and some diagnostic pipelines running above pre-pandemic levels after several years of lag. We also see a commitment by our hospital customers to work through staffing constraints to maintain surgical volumes. Lastly, customers are expressing confidence in our products as a clinically and economically sustainable path forward for minimally invasive surgery. Taken together, we see continued share gain from open surgery and laparoscopy in several procedures and in several countries as evidence accumulates in our favor. Strong growth in procedures and a capable product portfolio has supported a healthy capital placement quarter. Worldwide, we placed 312 DaVinci systems and 55 Ion systems in Q1, compared with 311 DaVinci systems and 34 Ion systems in Q1 2022. Capital placements were healthy in the United States, our distribution markets, the UK, and in India in the quarter. Our product portfolio and our teams are competing effectively with the offerings of a growing set of competitors, notably in OUS markets, where customers have had more time to evaluate the relative strength of our offerings. Procedures per system per quarter grew 13% during Q1 versus a year ago. Systems are being used more hours per operating day, and customers are increasing the mix of shorter duration procedures. Both trends are good long-term indicators for our business. Customers are finding more value in their systems and are moving more of their procedure volume onto our devices compared to other surgical approaches. Turning to our finances, our revenue growth of 14% reflects the strength of our procedures and capital placements, while average selling prices remain stable. Our margins were pressured primarily by charges taken in our stapling line due to a raw material lot nonconformance that necessitated scrapping instruments. We also experienced lower manufacturing yields during the bring-up of new production lines in our high-volume production facilities to support multi-port accessory and ion catheter growth. Customer availability was briefly impacted for stapling, but has since recovered, and we're working on bringing customer stocking levels back to their par levels. For our ion catheters and our multiport accessories, we're investing in capabilities to increase yield and robustness in the face of rising demand. We've worked through the issues that drove the bulk of these scrap charges in the quarter. Finally, in SG&A and R&D, we're spending roughly to plan while continuing to pursue productivity improvements post-pandemic. Jamie and Brian will take you through our finances and forward outlook in more detail shortly. On new products and indications, we've had a productive quarter. We received our CE mark for ion, and we expect to launch in the UK as our first entry into the European region. As we focus on scaling ion, we initiated our first high-volume production lines in our Mexicali facility, increasing production volume 50% over just the prior quarter. In digital, our simulation subscription install base grew 36% year-over-year as virtual reality training becomes more deeply embedded in the training pathway. Our intuitive hub install base grew 41% year-over-year, and utilization during DaVinci cases grew 80% year-over-year as customers use our intuitive hub computing system to record and analyze procedures more routinely. Turning to SP, we received new indications for SP in the United States through a 510 take 510K clearance in urology, covering simple prostatectomy, removal of a non-cancerous prostate for treatment of advanced benign prostate hyperplasia. We also installed our first DaVinci SP system in Japan, and they completed their first set of cases. For 2023, our priorities are as follows. First, we're focused on increased adoption for our priority procedures in countries through outstanding training, commercial, and market access executions. Second, we're pursuing expanded indications and launches for our new platforms. Third, we're focused on excellence and continuity of supply, product quality, and services provision as we emerge from pandemic stresses. And finally, we're pursuing increased productivity in our functions that benefit from scale. You can see from our first quarter results the relevance of these priorities and our urgency in pursuing them. I'll now turn the time over to Jamie, who will take you through our finances in greater detail. Good afternoon.