Intuitive Surgical, Inc.

Good day and thank you for standing by. Welcome to the Q4 2024 Intuitive Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today, Brandon Lam, Investor Relations for Intuitive Surgical.

Good afternoon and welcome to Intuitive's fourth quarter earnings conference call. With me today, we have Gary Guthart, our CEO, Jamie Samath, our CFO, Daniel Oh, our Senior Medical Officer. Dave Rosa, our President and regular participant on this call, is away from the office this week on a prior business commitment and will not be joining today. Dr. Daniel Oh, senior medical officer and practicing surgeon, will join us on this call to describe clinical highlights. We would also like to announce that Dan Connolly will be joining Intuitive as our VP and head of investor relations. Dan has worked at a global investment manager for the last 18 years and has actively followed surgical robotics since 2008. We look forward to Dan joining Intuitive in early February. 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 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 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 website. Today's format will consist of providing you with highlights of our full year and fourth quarter results as described in our press release announced earlier today, followed by a question and answer session. Gary will present business and operational highlights. Jamie will provide a review of our financial results and procedure highlights. Dan will present clinical highlights. Then I will provide our financial outlook for 2025. And finally, we will host a question and answer session. With that, I'll turn it over to Gary.

Thank you for joining us today i'll touch on our performance for the full year 2024 and share our perspective going into 2025. 2024 was a strong year for intuitive with robust early adoption of our fifth generation multi port platform da Vinci five. and healthy procedure growth and many of our supported indications in countries, resulting in strong financial performance for the year. Adoption of our ION and DaVinci SP platforms continued with new global clearances and increased utilization. Our teams have been hard at work launching DaVinci 5 and learning from its early experience. We are improving our products across all three of our platforms and helping our customers achieve their programmatic objectives. We started 2024 focused on four main thrusts. First, we expanded indications and launches of our new platforms by region. with a particular focus on our first phase of DaVinci 5 launch. Second, we pursued increased adoption for focus procedures by country through training, commercial activities, and market access efforts. Third, we drove quality and gross margin improvements in our global operations. And finally, we focused on increasing our productivity, particularly in functions that benefit from industrial scale. Taken together, our team made excellent progress against these objectives. Moving to procedures, growth for the full year was 17%. Areas of strength included general surgery in the United States and regional performance in countries including the UK and Ireland, Japan, and Germany. Distribution markets, including Brazil, Spain, and Italy, were also strong in the year. This week, we announced the acquisition from AB Medica of the da Vinci business in Italy, Spain, Portugal, and related territories. We're pleased with their performance, and we look forward to welcoming these new staff to our team. In the US, general surgery procedure growth was led by cholecystectomy, with foregut and appendectomy procedures rising as well. Thoracic procedure growth was also healthy in the year. Bariatric procedures fell modestly for the full year 2024, given the rise in GLP-1 medications. Procedure growth outside the United States continued to diversify beyond urology. with nice growth in categories including general surgery and thoracic surgery. Globally, benign indications grew approximately 200 basis points faster in the year than cancer indications. In flexible robotics, ion procedures showed continued strength with 78% growth for the full year. SP procedure growth accelerated in the year with 72% growth over a full year, a result of healthy growth in Korea, Japan, and Europe, and solid growth in the U.S. On the capital front, we placed 1,430 multiport systems in the full year 2024, compared with 1,313 multiport systems in 2023. ION placements for the full year were 271 versus 213 prior year, and SP placements were 96 for the full year versus 57 systems in the prior year. Globally, placements were strong in the United States, helped by the launch of DaVinci 5. Overall, our system's portfolio of DaVinci 5, DaVinci XI, DaVinci X, DaVinci SP, and ION, combined with our flexible financing options, allows our team to meet our customers' varying needs. Jamie will take you through placement dynamics in more detail later in the call. System utilization remains an important indicator of customer health because it is correlated to patient demand, care team satisfaction, and hospital financial health. Multiport utilization grew 3% in the year, SP utilization grew 12% in the year, and ion utilization grew 13%. Given our different platforms, their procedure mix, and sites of care, teasing apart system utilization by customer segment becomes increasingly important going forward. For example, a midsize community hospital lung program systems utilization can differ from a high volume community hospital general surgery program. As robot-assisted surgery moves to the back half of adoption curves in some procedures, utilization growth rates may differ from prior year trends. Our performance supported revenue of $8.4 billion for the year, of which 84% was recurring and representing 17% growth over 2023. Our operating expenses were at the lower end of our spend guidance. Our spending reflects three initiatives. First, we continue to invest in R&D to support innovation and adoption of our platforms and digital tools globally. Second, we're expanding our manufacturing and commercial footprints. And lastly, we have sought to leverage our enabling functions given our increased scale. Our product margins also started to improve in the year as increased shipment volume allowed for better factory utilization, as well as leverage in our component shipment and other logistics costs. Taken together, our net income grew by 29% in 2024 over 2023. Touching briefly on DaVinci 5, our teams have done a nice job in executing a complex launch. We placed 362 DaVinci 5s in the year and over 2,500 surgeons have performed in total over 32,000 procedures on DaVinci 5 in 2024. DaVinci Five has broad clinical indications and over 40 different procedure types have been performed using DaVinci Five to date. We design our systems to allow for routine sequential upgrades to their capability over time. And DaVinci Five customers will receive hardware and software upgrades going forward starting this year. This year's upgrades will focus on digital features supported by our 10,000 time increase in computing power. We'll share more details on these features as we bring them to market. As we enter 2025, our company priorities are as follows. First, we will focus on the full launch of DaVinci 5, its regional clearances and follow-on feature releases. Second, we'll pursue increased adoption for our focus procedures by country through training, commercial activities, and market access efforts. Third, we'll drive continued progress in building industrial scale, product quality, and manufacturing optimization. And finally, we'll focus on excellence and availability of our digital tools. Jamie? Over to you.