Intuitive Announces Fourth Quarter Earnings

SUNNYVALE, Calif., Jan. 23, 2024 (GLOBE NEWSWIRE) -- Intuitive (the “Company”) (Nasdaq: ISRG), a global technology leader in minimally invasive care and the pioneer of robotic-assisted surgery, today announced financial results for the quarter ended December 31, 2023.

Q4 Highlights

• Worldwide da Vinci procedures grew approximately 21% compared with the fourth quarter of 2022.
• The Company placed 415 da Vinci surgical systems, compared with 369 in the fourth quarter of 2022.
• The Company grew its da Vinci surgical system installed base to 8,606 systems as of December 31, 2023, an increase of 14% compared with 7,544 as of the end of the fourth quarter of 2022.
• Fourth quarter 2023 revenue of $1.93 billion increased 17% compared with $1.66 billion in the fourth quarter of 2022.
• Fourth quarter 2023 GAAP net income attributable to Intuitive was $606 million, or $1.69 per diluted share, compared with $325 million, or $0.91 per diluted share, in the fourth quarter of 2022.
• Fourth quarter 2023 non-GAAP* net income attributable to Intuitive was $574 million, or $1.60 per diluted share, compared with $439 million, or $1.23 per diluted share, in the fourth quarter of 2022.
• Fourth quarter 2023 expenses included a $40 million contribution to the Intuitive Foundation.
• In January 2024, the Company obtained CE mark certification for the da Vinci single-port (SP) surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, and breast surgical procedures. The Company plans to commercialize the SP system in select major European countries throughout 2024 as part of a measured rollout strategy.

Q4 Financial Summary

Gross profit, income from operations, net income attributable to Intuitive Surgical, Inc., and net income per diluted share attributable to Intuitive Surgical, Inc. are reported on a GAAP and non-GAAP* basis. The non-GAAP* measures are described below and are reconciled to the corresponding GAAP measures at the end of this release.

Fourth quarter 2023 revenue was $1.93 billion, an increase of 17% compared with $1.66 billion in the fourth quarter of 2022. The higher fourth quarter revenue was driven by growth in da Vinci procedure volume and an increase in the installed base of systems.

Fourth quarter 2023 instruments and accessories revenue increased by 22% to $1.14 billion, compared with $0.94 billion in the fourth quarter of 2022. The increase in instruments and accessories revenue was primarily driven by approximately 21% growth in da Vinci procedure volume and higher pricing, partially offset by customer buying patterns.

Fourth quarter 2023 systems revenue was $480 million, compared with $451 million in the fourth quarter of 2022. The Company placed 415 da Vinci surgical systems in the fourth quarter of 2023, compared with 369 systems in the fourth quarter of 2022. The fourth quarter 2023 da Vinci surgical system placements included 201 systems placed under operating lease arrangements, of which 109 systems were placed under usage-based operating lease arrangements, compared with 154 systems placed under operating lease arrangements, of which 70 systems were placed under usage-based operating lease arrangements in the fourth quarter of 2022.

Fourth quarter 2023 GAAP income from operations increased to $450 million, compared with $373 million in the fourth quarter of 2022. Fourth quarter 2023 GAAP income from operations included share-based compensation expense of $152 million, compared with $129 million in the fourth quarter of 2022. Fourth quarter 2023 non-GAAP* income from operations increased to $621 million, compared with $530 million in the fourth quarter of 2022.

Fourth quarter 2023 GAAP net income attributable to Intuitive Surgical, Inc. was $606 million, or $1.69 per diluted share, compared with $325 million, or $0.91 per diluted share, in the fourth quarter of 2022. Fourth quarter 2023 GAAP net income attributable to Intuitive Surgical, Inc. included excess tax benefits of $22 million, or $0.06 per diluted share, compared with $18 million, or $0.05 per diluted share, in the fourth quarter of 2022. Fourth quarter 2023 GAAP net income attributable to Intuitive Surgical, Inc. also included income tax benefits arising from the re-measurement of our Swiss deferred tax assets of $67 million, or $0.19 per diluted share, and the receipt of certain tax assets by our Swiss entity of $92 million, or $0.26 per diluted share. These benefits are excluded from non-GAAP net income.

Fourth quarter 2023 non-GAAP* net income attributable to Intuitive Surgical, Inc. was $574 million, or $1.60 per diluted share, compared with $439 million, or $1.23 per diluted share, in the fourth quarter of 2022. Fourth quarter 2023 GAAP and non-GAAP* net income included a discrete tax benefit of $23 million, or $0.06 per diluted share, arising from the release of unrecognized tax benefits due to statute expiration in various jurisdictions.

The Company ended the fourth quarter of 2023 with $7.34 billion in cash, cash equivalents, and investments, a decrease of $177 million during the quarter, primarily driven by capital expenditures, partially offset by cash generated from operations.

Impact of COVID-19 Pandemic

The fourth quarter of 2023 did not reflect any significant disruptions from COVID-19. During the fourth quarter of 2022, the Company saw COVID-19 resurgences impact da Vinci procedure volumes in China. COVID-19 has had in the past, and could have in the future, an adverse impact on the Company’s procedure volumes.

Additional supplemental financial and procedure information has been posted to the Investor Relations section of the Intuitive website at https://isrg.gcs-web.com/.

Webcast and Conference Call Information

Intuitive will hold a teleconference at 1:30 p.m. PST today to discuss the fourth quarter 2023 financial results. The call will be webcast by Nasdaq OMX and can be accessed on Intuitive’s website at www.intuitive.com or by dialing (844) 867-6169 using the access code 6678899. The webcast replay of the call will be made available on our website at www.intuitive.com within 24 hours after the end of the live teleconference and will be accessible for at least 30 days.

About Intuitive

Intuitive (Nasdaq: ISRG), headquartered in Sunnyvale, California, is a global leader in minimally invasive care and the pioneer of robotic surgery. Our technologies include the da Vinci surgical system and the Ion endoluminal system. By uniting advanced systems, progressive learning, and value-enhancing services, we help physicians and their teams optimize care delivery to support the best outcomes possible. At Intuitive, we envision a future of care that is less invasive and profoundly better, where diseases are identified early and treated quickly, so patients can get back to what matters most.

Product and brand names/logos are trademarks or registered trademarks of Intuitive or their respective owner. See www.intuitive.com/trademarks.

For more information, please visit the Company’s website at www.intuitive.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations concerning matters that are not historical facts. Statements using words such as “estimates,” “projects,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “may,” “will,” “could,” “should,” “would,” “targeted,” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are necessarily estimates reflecting the judgment of the Company’s management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements include, but are not limited to, statements related to future results of operations, future financial position, and the expected impacts of COVID-19 on the Company’s business, financial condition, and results of operations. These forward-looking statements should be considered in light of various important factors, including, but not limited to, the following: the overall macroeconomic environment, including the levels of inflation and interest rates, the conflict in Ukraine, the conflict between Israel and Hamas, disruption to the Company’s supply chain, including increased difficulties in obtaining a sufficient supply of materials in the semiconductor and other markets; curtailed or delayed capital spending by hospitals; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that COVID-19 could lead to material delays and cancellations of, or reduced demand for, procedures; delays in surgeon training; delays in gathering clinical evidence; delays in obtaining new product approvals, clearances, or certifications from the U.S. Food and Drug Administration (“FDA”), comparable regulatory authorities, or notified bodies; the risk of the Company’s inability to comply with complex FDA and other regulations, which may result in significant enforcement actions; regulatory approvals, clearances, certifications, and restrictions or any dispute that may occur with any regulatory body; guidelines and recommendations in the healthcare and patient communities; healthcare reform legislation in the U.S. and its impact on hospital spending, reimbursement, and fees levied on certain medical device revenues; changes in hospital admissions and actions by payers to limit or manage surgical procedures; the timing and success of product development and market acceptance of developed products; the results of any collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships, including the joint venture with Shanghai Fosun Pharmaceutical (Group) Co., Ltd.; the Company’s completion of and ability to successfully integrate acquisitions; intellectual property positions and litigation; competition in the medical device industry and in the specific markets of surgery in which the Company operates; risks associated with the Company’s operations and any expansion outside of the United States; unanticipated manufacturing disruptions or the inability to meet demand for products; the Company’s reliance on sole-sourced and single-sourced suppliers; the results of legal proceedings to which the Company is or may become a party, including but not limited to product liability claims; adverse publicity regarding the Company and the safety of the Company’s products and adequacy of training; the impact of changes to tax legislation, guidance, and interpretations; changes in tariffs, trade barriers, and regulatory requirements; and other risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release and which are based on current expectations and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those risk factors identified under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, as updated by the Company’s other filings with the Securities and Exchange Commission. The Company’s actual results may differ materially and adversely from those expressed in any forward-looking statement, and the Company undertakes no obligation to publicly update or release any revisions to these forward-looking statements, except as required by law.

*About Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income attributable to Intuitive Surgical, Inc., and non-GAAP net income per diluted share attributable to Intuitive Surgical, Inc. (“EPS”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

The Company uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding items such as amortization of intangible assets, share-based compensation (“SBC”) and long-term incentive plan expenses, and other special items. Long-term incentive plan expense relates to phantom share awards granted in China by the Company’s Intuitive-Fosun joint venture to its employees that vest over four years and can remain outstanding for seven to ten years. These awards are valued based on certain key performance metrics. Accordingly, they are subject to significant volatility based on the performance of these metrics and are not tied to performance of the Company’s business within the period. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to its historical performance. The Company believes these non-GAAP financial measures are useful to investors, because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and (2) they are used by institutional investors and the analyst community to help them analyze the performance of the Company’s business.

Non-GAAP gross profit. The Company defines non-GAAP gross profit as gross profit, excluding amortization of intangible assets and SBC and long-term incentive plan expenses.

Non-GAAP income from operations. The Company defines non-GAAP income from operations as income from operations, excluding amortization of intangible assets, SBC and long-term incentive plan expenses, a facilities asset abandonment charge, litigation charges and recoveries, and a gain on the sale of a business.

Non-GAAP net income attributable to Intuitive Surgical, Inc. and EPS. The Company defines non-GAAP net income as net income attributable to Intuitive Surgical, Inc., excluding amortization of intangible assets, SBC and long-term incentive plan expenses, a facilities asset abandonment charge, litigation charges and recoveries, a gain on the sale of a business, gains (losses) on strategic investments, adjustments attributable to noncontrolling interest in joint venture, net of the related tax effects, and tax adjustments, including the excess tax benefits or deficiencies associated with SBC arrangements, a one-time tax benefit from re-measurement of Swiss deferred tax assets, a one-time tax benefit from receipt of certain tax assets by our Swiss entity, and the net tax effects related to intra-entity transfers of non-inventory assets. The Company excludes the excess tax benefits or deficiencies associated with SBC arrangements as well as the tax effects associated with non-cash amortization of deferred tax assets related to intra-entity non-inventory transfers, because the Company does not believe these items correlate with the on-going results of its core operations. The tax effects of the non-GAAP items are determined by applying a calculated non-GAAP effective tax rate, which is commonly referred to as the with-and-without method. Without excluding these tax effects, investors would only see the gross effect that these non-GAAP adjustments had on the Company’s operating results. The Company’s calculated non-GAAP effective tax rate is generally higher than its GAAP effective tax rate. The Company defines non-GAAP EPS as non-GAAP net income attributable to Intuitive Surgical, Inc. divided by diluted shares outstanding, which are calculated as GAAP weighted-average outstanding shares plus dilutive potential shares outstanding during the period.

There are a number of limitations related to the use of non-GAAP measures versus measures calculated in accordance with GAAP. Non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income attributable to Intuitive Surgical, Inc., and non-GAAP EPS exclude items such as amortization of intangible assets, SBC and long-term incentive plan expenses, excess tax benefits or deficiencies associated with SBC arrangements, and non-cash amortization of deferred tax assets related to intra-entity transfer of non-inventory assets, which are primarily recurring items. SBC expense has been, and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business. In addition, the components of the costs that the Company excludes in its calculation of non-GAAP net income attributable to Intuitive Surgical, Inc. and non-GAAP EPS may differ from the components that its peer companies exclude when they report their results of operations. Management addresses these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income attributable to Intuitive Surgical, Inc. and non-GAAP EPS and evaluating non-GAAP net income attributable to Intuitive Surgical, Inc. and non-GAAP EPS together with net income attributable to Intuitive Surgical, Inc. and net income per share attributable to Intuitive Surgical, Inc. calculated in accordance with GAAP.

Contact: Investor Relations
(408) 523-2161