Both gynecology and urology procedure annualized growth strengthened in the quarter, as pandemic pressures eased in the U.S. But as you heard in our prepared comments, a significant increase in hospitalization is not reflected in the guidance range. The fourth quarter 2022 system placements included 154systems placed under operating lease and usage-based arrangements, compared with 143 systems in thefourth quarter of 2021. Second-quarter system placements of 328 systems increased 84%, compared with 178 systems for the second quarter of 2020, and increased 10%, compared with 298 systems last quarter. Contact Information. For full-year 2021, Intuitive Surgical revenues are estimated to be north of $5.7 billion, reflecting a 30% y-o-y growth, while the growth rate is expected to slow to low teens next year . China procedure growth remains strong and broad-based as a result of continued expansion of the installed base under the current quota. With an initial focus on BPH, the company's AquaBeam Robotic System delivering Aquablation therapy, is the first FDA-cleared, automated surgical robot for the treatment of lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia (BPH). So here's kind of where we stand with the backlog. China growth in the second quarter continued to be far higher than our other regions, primarily reflecting the 40% system installation growth over the past year. Feb 2021 - Jun 2021 5 months Advised and supported life science entrepreneurs through market validation, regulatory, reimbursement, intellectual property, investor narrative, and talent . COVID-19 has had, and may continue to have, an adverse impact on the Companys procedure volumes. Based on market data, we believe that diagnostic pipelines in the U.S. began to recover from the impact of the pandemic in March, with a lag in the recovery of associated procedures. The supply issues we called out in the first quarter did not impact Ion placements and procedures in this quarter. The da Vinci surgical systems are designed to help surgeons perform minimally invasive surgery. So from a core demand point of view or disease state, that's clearly out there and accumulating, and it has to get processed through. Intuitive Surgical, Inc. (NASDAQ:NASDAQ:ISRG) JPMorgan 40th Annual Healthcare Conference January 12, 2022 3:45 PM ETCompany ParticipantsGary Guthart - CEOJamie Samath - CFOBrian King -. Second-quarter spending was below our expectations due to activities restricted by COVID, including clinical development, marketing events, and travel costs. The compound annual growth rate between the fourth quarter of 2019 and the fourth quarter of 2021 was 6%. During the quarter, a group from the Shenzhen Hospital Naval Medical University in China, published a meta-analysis in BMC cancer comparing robotic-assisted thoracic surgery versus video-assisted thoracic surgery, or VATs, for lung lobectomy or segmentectomy in patients with nonsmall cell lung cancer. any time, re-enter your e-mail address and click Submit, then adjust your form entries. Travel and associated costs in support of our field have also not recovered to pre-pandemic levels. We think about digital as enabling and accelerating a lot of different parts of the ecosystem. How close we are to maybe seeing something that you can monetize? What we've seen, though, is that what happens in the PowerPoints and what happens a year later is different. The call will be webcast by Nasdaq OMX and can be accessed on Intuitives website at www.intuitive.com or by dialing (877) 692-8955 using the access code 5830756. You may automatically receive Intuitive Surgical financial information by e-mail. We anticipate iterating our approach as we learn and the year progresses. To change your e-mail options at With respect to operating expenses, on our last call, we forecast to grow full-year pro forma 2021 operating expenses between 18% and 22% above 2020 levels. Fourth quarter 2021 instruments and accessories revenue increased by 13% to $843million, compared with $747million in the fourth quarter of 2020, primarily driven by approximately 19% growth in da Vinci procedure volume, partially offset by stocking orders in the prior year associated with the Companys launch of Extended Use Instruments. Montreal, Quebec, Canada. The stock movement pushed Intuitive . 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 intangible asset charges, re-measurement of contingent consideration, 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. And there's a lot of opportunities for OR efficiencies and standardization, controlling operating costs, controlling consumables costs. Gross profit, income from operations, net income attributable to Intuitive Surgical, Inc., net income per diluted share attributable to Intuitive Surgical, Inc., and diluted shares are reported on a GAAP and non-GAAP* basis. My Intuitive allows surgeons and care team members to access their data, to manage their profile, their learning, and otherwise interact with Intuitive through an easy-to-use mobile app in the palm of their hand. We expect spending on activities restricted by COVID to increase as the impacts of the pandemic decline. The pandemic is not behind us, and additional infection growth may again strain hospital resources and impact our results in the future. Or is it too early, and you're just saying that might happen in the future? Let me start with why I think it's adopting, and I'm going to turn to Jamie as to where -- what inning of the baseball game are we in, I'll let Jamie take that. . In the quarter, strong trade-ins of older-generation systems for our fourth-generation products and strength in multi-system deals continue to support our thesis that customers that know us best continue to invest with us going forward. Jamie, I'll let you take it from there. your options for e-mail notification, please enter your e-mail address below and click Taken together, this combination of a recovery in procedures and healthy utilization supports our solid capital placement trends and rounds out a healthy commercial recovery year to date. Sales increased 17% to $1.55 billion, just ahead of ISRG stock analysts' projections for . Rick Wise -- Stifel Financial Corp. -- Analyst. ISRG stock analysts called for adjusted profit of $13.40 per share and $5.33 billion in sales. It doesn't seem like the backlog would be exhausted just after one quarter. As customers continue to upgrade to fourth-generation capabilities, the population of installed SIs is decreasing, particularly in the U.S. were 110 trade-ins were completed in the second quarter, leaving an installed base of SIs of approximately 500 systems. Larry Biegelsen -- Wells Fargo Securities -- Analyst. INTUITIVE at 43rd Annual Goldman Sachs Global Healthcare Conference. . Additional supplemental financial and procedure information has been posted to the Investor Relations section of the Intuitive website at https://isrg.gcs-web.com/. Second, disciplined execution of our launches, including our advanced instruments, SP, Ion, and digital efforts. Fourth quarter 2021 revenue was$1.55 billion, an increase of 17%compared with$1.33 billion in thefourth quarter of 2020. We're taking a first-principles approach to return-to-office environments with our team, bringing back face-to-face interactions for those tasks best completed in person while enabling hybrid work environments for tasks that are well accomplished by distributed teams. In the United States, procedure growth was strong in the quarter, driven by growth in bariatric surgery, hernia repair, and cholecystectomy. 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. Buy These 2 Stocks in 2023 and Hold for the Next Decade, 2 Growth Stocks to Buy Before the Big Bull Rally, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. So we're making those investments to move that forward. This presentation contains forward-looking statements. Listen to Webcast. Thanks for taking the question. User Experience for digital health innovations:<br>I work with startups and corporations and design user-centered products, services, and digital business models. But can you maybe just talk through the thought process there and how you're thinking about any potential risks in the back half of the year from the variant cases? So it's not a scientific study, just my view. Ion system placements and procedures are excluded from our overall system and procedure counts. And sequential growth in what they can do with the system remains our focus on SP for now. We also note the increasing number of COVID-19 cases in certain geographies associated with the Delta variant. Yes, Tycho. Procedure growth in the U.S. was led by bariatric cholecystectomy and hernia procedures. Frankly, the lack of precision in that estimate is such that it's probably not useful for us to share. Intuitive(Nasdaq: ISRG), headquartered in Sunnyvale, California, is a global technology leader in minimally invasive care and the pioneer of robotic-assisted surgery. Intuitive has managed multiple ways of working for many years. Fourth quarter 2022 GAAP income from operations also included litigation charges of $21million. We also find that our economic offerings with da Vinci X and EUP, we have choices that we ourselves can offer our customers. Intangible asset charges consist of non-cash charges, such as the amortization of intangible assets as well as in-process R&D charges. . I'll now turn the time over to Marshall to take you through our financial performance in greater detail. I think what we're seeing is that the longer diagnostic pipelines have had this kind of double effect from the pandemic. Recovery in the U.K. was healthy in the quarter as NHS increased access to surgeries broadly. Fourth quarter 2021 non-GAAP* net income attributable to Intuitive Surgical, Inc. was $477 million, or $1.30 per diluted share, compared with $434 million, or $1.19 per diluted share, in the fourth quarter of 2020. With regard to income tax, we expect the range of our second-half 2021 pro forma tax rate to be between 21% and 22% of pre-tax income, slightly higher than the range we provided on the last call, reflecting a higher mix of U.S. income. However, as the installed base of older-generation product declines, the number of trade-ins will decline over time. Lastly, we continue to digitally enhance our ecosystem. OK, great. The authors concluded, "The results revealed that robotic-assisted thoracic surgery is a feasible and safe technique compared with VATs in terms of short-term and long-term outcomes." We work closely and collaboratively . The Company defines non-GAAP EPS as non-GAAP net income attributable to Intuitive Surgical, Inc. divided by non-GAAP diluted shares, which are calculated as GAAP weighted-average outstanding shares plus dilutive potential shares outstanding during the period. Presentation: Operator. And just, you know, on competition, it does seem like the noise is increasing. These forward-looking statements should, therefore, be considered in light of various important factors, including, but not limited to, the following: the risk that the COVID-19 pandemic could lead to further material delays and cancellations of, or reduced demand for, procedures; curtailed or delayed capital spending by hospitals; disruption to our supply chain, including increased difficulties in obtaining a sufficient amount of materials in the semiconductor and other markets; closures of our facilities; delays in surgeon training; delays in gathering clinical evidence; delays in obtaining new product approvals or clearances from the U.S. Food and Drug Administration (FDA) due to the effects of the COVID-19 pandemic; the evaluation of the risks of robotic-assisted surgery in the presence of infectious diseases; diversion of management and other resources to respond to the COVID-19 outbreaks; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that the COVID-19 pandemic continues to disrupt local economies and causes economies in our key markets to enter prolonged recessions; the risk of our inability to comply with complex FDA and other regulations, which may result in significant enforcement actions; 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 our joint venture with Shanghai Fosun Pharmaceutical (Group) Co., Ltd.; our completion of and ability to successfully integrate acquisitions, including Orpheus Medical; procedures counts; regulatory approvals, clearances, and restrictions or any dispute that may occur with any regulatory body; guidelines and recommendations in the healthcare and patient communities; intellectual property positions and litigation; competition in the medical device industry and in the specific markets in which we operate; risks associated with our operations outside of the U.S.; unanticipated manufacturing disruptions or the inability to meet demand for products; our reliance on sole and single source suppliers; the results of legal proceedings to which we are or may become a party; product liability and other litigation claims; adverse publicity regarding us and the safety of our products and adequacy of training; our ability to expand into foreign markets; the impact of changes to tax legislation, guidance, and interpretations; changes in tariffs, trade barriers, and regulatory requirements; and other risk factors. your options for e-mail notification, please enter your e-mail address below and click First cases in our SP colorectal IDE trial were completed in the quarter as we seek to bring SP capability to additional procedures. Yes. The Motley Fool recommends the following options: long January 2022 $580 calls on Intuitive Surgical and short January 2022 $600 calls on Intuitive Surgical. We are now slightly increasing our forecast and expect full-year gross profit margin to be between 70.5% and 71.5% of revenue. After all, the newsletter theyhave run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. 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 Companys business. Phone: 408-523 . While the percentage of systems placed under operating leases fluctuates quarter to quarter, we believe leasing will increase as a percentage of sales over time, which will result in the deferral of otherwise current revenue into future periods. 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. Yeah. The authors concluded in part, "When compared to open, the robotic-assisted surgery group is associated with a comparable operative time, shorter length of stay and lower reoperation rate through 30 days. The higherfourth quarter revenue was driven by growth in da Vinci procedure volume, partially offset by a decline in system placements and foreign currency impacts. I think they are ecosystem enablers and can result in very high customer satisfaction when done well. It's the impact on hospitalizations. Additionally, constant currency revenue growth is reported on a non-GAAP* basis. And we also see, I think, increased patient confidence is a function of the improving vaccination rates. [Inaudible] on a nice quarter. Before we begin, I would like to inform you that comments mentioned on today's call may be deemed to contain forward-looking statements. Where are we going with this one? Last quarter, we forecast 2021 procedure growth of 22% to 26%. Finally, we expect to continue to invest in expanding and accelerating our ecosystem of products and capabilities. Customer appreciation and recurring use of our products has been growing nicely. Intuitive brings more than two decades of leadership in robotic-assisted surgical technology and solutions to its offerings and develops, manufactures, and markets the da Vinci Surgical System and the Ion endoluminal system. INTUITIVE at 2022 Wells Fargo Healthcare Conference. To change your e-mail options at Thirty-eight percent of systems placed in the second quarter involved trade-ins, which is lower than the 40% last year and the 44% last quarter. See www.intuitive.com/trademarks. Minimum 15 minutes delayed. And we think that the extended use instruments lowers barriers for purchases of systems. any time, re-enter your e-mail address and click Submit, then adjust your form entries. Philip Kim, our head of investor relations, will not be joining on today's call as he's currently on paternity leave following the birth of his daughter. Later we will have a question-and-answer session. Finally, our team is making good progress in scaling our operations. Fourth quarter 2022 revenue was$1.66 billion, an increase of 7%compared with$1.55 billion in thefourth quarter of 2021. However, that charge generated -- that change generated a long-term benefit of $66 million that is recognized currently in GAAP income and will be recognized ratably over approximately 10 years in pro forma income. (6) Diluted net income per share includes the effect of the following items: Gains (losses) on strategic investments, net of tax, Less: net income attributable to noncontrolling interest in joint venture. I'll maybe start with Marshall on the first one and then go to Gary for the second one. Jamie Samath Senior Vice President Finance. You may automatically receive Intuitive Surgical financial information by e-mail. Plan to attend GIANT 2022. Our SEC filings can be found through our website or at the SEC's website. Thanks. Shifting to the extended use program, you know, you've been out for around six months, smaller rollout in Europe in the fourth quarter. COVID has delayed some work in R&D and clinical trials, leading to some underspend in programs, prototypes, and some delay in hiring. So it's hard to time it out, and it doesn't time out over one or two quarters, it times out over years. Third, we are launching and refining our flexible diagnostic platform, Ion, by working with early customers to help establish high-performing sites and by improving our technology and supply chain capabilities. The compounded annual utilization growth rate between the second quarters of 2019 and 2021 was 6%. Customer adjustment of buying patterns will reduce I&A revenue per procedure. Intuitive Surgical, Inc. is the global technology leader in robotic-assisted minimally invasive surgery (MIS). The instrumentation updates, there are other things, imaging updates and software updates that are really all focused around right instruments, right features for the right extension or right expansion. Please go ahead, sir. Turning to gross profit. Based in Sunnyvale, California. Copyright 2023 Intuitive Surgical. Given the stronger recovery of procedures we have experienced so far, particularly in the U.S., and strength in U.S. general surgery, we are now increasing our forecast and expect full-year 2021 procedure growth of 27% to 30%. The Motley Fool owns shares of and recommends Intuitive Surgical. Gotcha. These awards were modified in the fourth quarter of 2021 and are now valued based on certain key performance metrics. Thank you for your support on this extraordinary journey. In the U.S. and Europe, extended use instruments were nearly fully adopted in the second quarter. Leasing and alternative financing arrangements enable customer access to capital. The impact of the COVID-19 pandemic on the Companys business has, and continues to, differ by geography and region. 06/14/22 - 1:20 PM PDT. It's a highly penetrated laparoscopic indication in the United States. And I have one follow-up. your options for e-mail notification, please enter your e-mail address below and click These forward-looking statements include, but are not limited to, statements related to the expected impacts of the COVID-19 pandemic on the Companys business, financial condition, and results of operations, future results of operations, future financial position, the Companys financing plans and future capital requirements, the Companys potential tax assets or liabilities, and statements based on current expectations, estimates, forecasts, and projections about the economies and markets in which the Company operates and the Companys beliefs and assumptions regarding these economies and markets.