Intuitive Surgical, Inc.

Thank you, everyone, for standing by. Welcome to the Intuitive Surgical Q3 2023 earnings release. Now, at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If you wish to place yourself in queue for questions at any time, please press 1 then 0 on your telephone keypad. To remove yourself from that queue, you may repeat the 1 then 0 command. I will now turn the conference over to your host, Head of Investor Relations, Intuitive Surgical, Brian King. Please go ahead.

Good afternoon, and welcome to Intuitive's third quarter earnings conference call. With me today, we have Gary Guttart, our CEO, Jamie Samath, our CFO, and Dr. Miriam Currett, our Chief Medical Officer. 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 July 24, 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 third 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. Miriam will present clinical highlights. And I will discuss procedure details and provide our updated financial outlook for 2023. And finally, we will host a question and answer session. With that, I will turn it over to Gary.

Thank you for joining us today. In this third quarter, we saw strong growth in procedures performed by our customers, solid new system placements, and healthy growth in utilization amid market conditions that remain largely consistent with Q2. Our new platforms continue to gain ground, with ION installs and procedure growth continuing, SP installs and procedure growth modestly accelerating, and healthy growth in customer use of our digital tools. Turning first to procedures, DaVinci procedure growth in the quarter was 19%. Areas of strength included general surgery for benign conditions, particularly in the United States, and broad regional growth with Germany, Japan, the U.K., and India as standouts. China procedure growth was in line with our global average in the quarter. U.S. general surgery procedure growth was led by cholecystectomy and colon resection. ION procedures showed continued strength with 125% growth in the quarter. As P procedure growth accelerated, with 54% global growth in the quarter, driven by strength in the United States. On the capital front, we placed 312 systems in Q3, compared with 305 systems in Q3 of last year. Our clinical install base now stands at 8,127 multiport da Vinci systems, 490 ion systems, and 158 single-port da Vinci systems. Overall, our capital placement trends reflect demand for additional capacity in multiport, continued greenfield interest in our ION system, and a modest acceleration for placements of SP. The proportion of leases for new capital placements accelerated in the quarter, with the U.S. using the highest leasing rates. We think the acceleration in leasing reflects the convenience of our leasing program and the maturity of our Generation IV multiport systems. While leasing reduces in-quarter revenue relative to capital purchase, total economics are healthy for our customer and for us. Leasing allows our customers to build clinical capacity when and where they need it and provides predefined pathways for our new technology as it enters the market. The growth rate in system utilization, defined as procedures per installed system per quarter, was 6%, down from 9% last quarter, while still above historical growth rates. Strong procedure growth and an increased proportion of use in benign indications shortens average procedure times and eases scheduling. Higher utilization increases our customers' return on invested capital and is economically healthy for us. Turning to our finances, our revenue grew 12% in the quarter, and our operating expenses were within our spend guidance. Our spending reflects continued investments in research and development to support the growth of our platforms and digital tools, expansion of our manufacturing and commercial footprints, and capital amortization. Looking at the broader picture, Our fourth-generation DaVinci platform is operating at global scale and embedded in a robust ecosystem of instruments, accessories, training, and services. Customer acceptance of our IAM platform is strong. Acceptance of our DaVinci SP is accelerating with new indications in the pipeline, and our digital tools are building momentum through their early stages. We welcome Dr. Miriam Puret, Intuitive's Chief Medical Officer, to this call. and she will take us through our clinical perspective and some of the work we're doing to expand indications. Our operations teams did a fantastic job supporting our customers through the supply chain shocks of the past several years. This unavoidable effort diverted resources away from product cost reduction, and as supply chain stresses ease, we're now pivoting our attention to once again lowering our product costs. Areas of opportunity include our ION program, our SP Accessories portfolio and our multi-port accessories and advanced instrument lines. Given the timing of facilities completion, manufacturing efficiency improvements for new products, and other complex projects, we expect variability in gross margin over the coming quarters as we work through these programs. Turning to our digital offerings, common use of our digital tools and channels is growing nicely. Our SimNow surgical simulators are installed at the majority of our customer sites, and subscription renewal rates are outstanding. Routine use of MyIntuitive app by over 10,000 da Vinci surgeons grew by 140% year-over-year and is receiving strong net promoter scores that continue improving over time. Our intuitive hub media management and telepresence system installations grew 58% in the quarter, and hub-captured surgical cases grew 61%. In closing, core demand is healthy. We're focused on extending our ecosystem internationally and driving our product costs down, particularly for our newer platforms. We are dogged in pursuit of 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.