Intuitive Surgical, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Intuitive Q2 2023 Earnings Release. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session. To place yourself in queue for questions, you may depress 1 then 0 at any time on your telephone keypad. You may remove yourself from that queue by also repeating the 1 then 0 command. As a reminder, today's call is being recorded. I will now turn the call over to your host, Head of Investor Relations, Brian King. Please go ahead, sir.

Thank you. Good afternoon, and welcome to Intuitive's second 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 Securities and Exchange Commission filings, including our most recent Form 10-K filed on February 10, 2023, and Form 10-Q filed on April 20, 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 event section under our investor relations page. Today's press release and supplementary financial data tables have been posted to our website. Today's format will consist of providing you with highlights of our second 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. The fundamentals of our business were healthy in the second quarter with strong procedure and utilization growth and strong capital placements. Our product operations teams continued to build capacity and deliver in a dynamic supply chain environment, as customers increasingly rely upon us for routine use. Our research and development efforts continued to build momentum in the quarter, including positive development milestones for our intuitive ecosystem, including systems, instruments, accessories, digital tools, and new indications. Turning first to procedures, growth in the quarter was 22%. Areas of strength included general surgery and gynecology for benign conditions, particularly in the United States. General surgery procedure growth was led by cholecystectomy and hernia repair. Colon and rectal procedure growth was healthy. Global procedure growth was also strong in the quarter, led by a recovery in China and continued strength in Japan, Germany, and the UK. ION procedures showed continued strength, with 145% growth in Q2 of 23. SP procedure growth was accretive, with 40% global growth in the quarter, driven by accelerating growth in the United States. On the capital front, we placed 331 systems in Q2, compared with 279 systems in Q2 of last year. Our clinical installed base now stands at 7,900 multiport da Vinci systems, 435 ion systems, and 142 single-port da Vinci systems. Overall, our capital placement trends reflected demand for additional capacity in multiport, strong interest in our ion system, and stable demand for SP as we build our SP indications. System utilization, defined as procedures per installed clinical system per quarter, grew 9% globally year-over-year, reaching a new high as customers adopt a broad mix of procedures on our systems. We believe real-world evidence of improvements across the quadruple lanes from better patient outcomes to surgeon satisfaction and lower total cost to treat per patient episode, underpin this increasing utilization. Turning to our finances, our revenue grew 15% in the quarter. Our capital and operating expenses were within our spend guidance, reflecting continued investments in R&D to support growth of our platforms and digital tools, expansion of our manufacturing and commercial footprints, and capital amortization. We will continue investing in R&D, manufacturing, and commercial operations to serve our global markets at industrial scale. These investments are likely to be lumpy over the next couple of years as significant operations expansions and other projects complete. Taking a step back, we have found that the quadruple aim is the right north star for us, focusing on demonstrable improvements to outcomes across specific procedures and patient populations, increasing patient and care team satisfaction, and lowering the total cost to treat per patient episode. As electronic medical records have been adopted, we have partnered with our customers to analyze this data, building real-world evidence and big data approaches to measure quadruple aim improvements within countries, regions, and health systems. Paired with our ecosystem investments in training services and products, and powered by digital tools that can generate actionable intelligence from surgical data, we can help our customers analyze their programs, recommend and support actions to improve performance and lower total costs. This integrated business system is catalyzing our customers' goal of strong MIS programs by surfacing actionable and measurable steps. Our approach is scalable for us, too, working for our DaVinci platforms and for ION and opening the door to future opportunities. Turning to our ecosystem investments, We're making solid progress extending our offerings to new clinical domains and new regions. For DaVinci MultiPort, we recently obtained NMPA registration for XI local production in China. This means our DaVinci XI will be able to compete for the locally sourced tender subset of the recently released updated national quota. Our DaVinci SP team achieved several milestones recently. We completed patient enrollment for our colorectal and our thoracic IDE trials, continued our first phase of launch of SP in Japan, and submitted our CE-MARC dossier for SP in Europe. Turning to ION, our team installed their first ION system in the UK and initiated first cases. For our digital tools, we have initiated our phase one launch of Case Insights, our name for our computational observer. Case Insights is a tool that works with the da Vinci system and hospital data to build AI models that find correlations between surgical technique, patient populations, and surgical outcomes. Our first phase of launch builds on work over the past few years with our clinical research partners to refine objective performance indicators and link them to actionable changes to improve outcomes, shorten training times, and improve surgical program efficiency. We think these computational tools can make a significant impact using real-world and real-time data to improve skills and outcomes and to inform future product and automation opportunities. That said, features can be built quickly, but long-term validation is arduous. We're a science-driven organization and we'll work through validation pathways in pursuit of long-term success. We do not expect material revenue from Case Insights for the next several quarters. In closing, our core business has momentum. We see a significant long-term opportunity to improve the quadruple aim using our integrated ecosystem powered by analytics, and we are pacing our investments to catalyze that opportunity. I'll now turn the time over to Jamie, who will take you through our finances in greater detail. Good afternoon.