Intuitive Surgical, Inc.

Thank you, everyone, for standing by, and welcome to the intuitive Q1 2024 earnings release call. At this time, all participants are on a listen-only mode. If you wish to place yourself in queue for questions at any time, you may push 1 and 0 on your telephone keypad. You may remove yourself from queue at any time by repeating the 1 and 0 command. As a reminder, today's call is being recorded. I will now turn the call over to our host, Head of Investor Relations, for Intuitive Surgical, 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 Smith, 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 annual report on Form 10-K for the fiscal year ended December 31, 2023, and subsequent filings. Our SEC filings can be found through our website or at the SEC's website. Investors are cautioned not to place under-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 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 2024. 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 first quarter of 2024 was a solid one for Intuitive, where core measures of our business remained healthy, including solid procedure growth and capital placements. Furthermore, our teams delivered important milestones across several parts of our intuitive ecosystem, including launching our next-generation multiport platform, DaVinci 5, launching our DaVinci SP platform in Europe, and improving our supply constraints for ion catheters. Some regional challenges existed in the quarter, which we'll describe today. Taken together, we remain enthusiastic about our opportunity, and we'll work through near-term pressures by focusing on what we can control. Starting first with procedures, we experienced solid growth in the quarter of 16% compared with a strong Q1 of 23 that was a result of elevated patient volume from the return of patients post-pandemic. Q1 of 2024, procedure performance was led by broad growth in general surgery in the United States and by procedures beyond urology outside the United States. Globally, cholecystectomy, colon resection, and foregut procedures led the way. Regional performance included strength in China, Germany, and the United Kingdom. In Japan, we saw a moderation of growth in urology as we reached higher levels of penetration, and Q1 2023 benefited from the return of patients and backlog. In Korea, growth was lower than our expectation, primarily due to a physician strike in the country, which began in February and has continued. Turning to capital, we placed 313 da Vinci systems in the quarter, of which 289 were multiport systems, compared with 302 multiport systems in Q1 of 23. SP placements were 24 in the quarter versus 10 systems a year ago, and IOM placements for the quarter were 70 versus 55 a year ago. Capital placements were solid in the United States, our global distribution markets, and in Germany. Placements in China appear to be impacted by delayed tenders, and an apparent increase in provincial preference for domestic robotic competition. We saw some placement weakness in the U.K. as financial pressures in the NHS constrained access to capital. System utilization, defined as procedures per installed system per quarter, grew 1 percent globally year over year for our multiport platform, lower than last quarter and our historical trend, a result of a strong placement year in 2023 in which the multi-port clinical install base grew 14% while customers addressed a COVID-related backlog. For our newer platforms, utilization grew 10% for SP and 14% for ION in the quarter. Utilization is an important indicator of customer health and is a reflection of customers driving value from their systems. Turning to our finances, revenue growth of 11% in the quarter reflects solid procedure performance and capital placements. Average system selling prices declined modestly due to regional and product mix. Product margins were within our expectations, reflecting a higher mix of newer platforms. Operating expenses came in slightly below plan, resulting in pro forma operating profit growth of 18%. Jamie will take you through our finances in greater detail later in the call. In the quarter, we made good progress with our new platforms. In March, we received FDA clearance for our next-generation multiport platform, DaVinci 5. Within the quarter, we placed eight DaVinci 5 systems, and Surgent completed the first cases. As we engage with customers during their activation of DaVinci 5, our customers are noting and appreciating improved precision, improved imaging, improved efficiency for Surgent and staff, improved ergonomics, and they are exploring the potential of force feedback. where early surgeons are excited to test hypothesis about its procedural, clinical, and learning value. Digital analytical capabilities of DaVinci 5 are also drawing positive reviews. In parallel with customer support, we're working hard to optimize our supply chains and manufacturing capabilities for DaVinci 5 components. We will remain in our measured rollout as we stabilize supply and respond to customer input. Turning to Ion, our teams have made meaningful progress on resolving supply challenges for our catheter and Ion's vision probe, although work still remains to be done. Earlier this month, FDA reviewed our set of design and production changes and cleared an increase in an Ion catheter lives from five lives to eight lives, alleviating some supply constraints while improving the economics for us and our customers. Also in March, we received NMPA clearance for ION in China through a special review process for innovative medical devices. While NMPA clearance is only the first step toward commercialization in China, we believe ION can play an important role in helping to address the significant burden of lung cancer in the country. Turning to ASP, we received CE mark in Europe with a broad set of indications in the quarter, and we placed eight systems. First cases in Europe were performed this April, and we're encouraged by early customer interest for SP. In closing for 2024, our priorities are as follows. First, we'll support the measured launch of DaVinci 5 and our other new platforms by region. Second, we're focused on supporting surgeons' adoption of focused procedures. Third, we're focused on improving our product margins and quality. And finally, we're focused on improving productivity in those functions that benefit from global scale. I'll now turn the time over to Jamie, who will take you through our finances in greater detail.