After use of its surgical robotics systems all but ground to a halt at the height of the COVID-19 pandemic, Intuitive Surgical has seen its fortunes reverse in recent months as hospital procedures steadily return to pre-pandemic levels.
Earlier this year, while celebrating on a first-quarter earnings call the “surprising strength” of the number of procedures using the company’s flagship da Vinci systems, CEO Gary Guthart warned that the period’s 26% growth rate may have been a one-off. Three months later, however, Intuitive’s second-quarter results have a familiar ring to them, with worldwide da Vinci procedures growing by 22% year over year.
And the heightened procedure rate isn’t only an improvement over COVID-stricken 2022. It also represents an increase of 17% compared to the second quarter of 2019, according to Thursday’s earnings report.
The increase was led by gynecological procedures for benign conditions and a variety of general surgeries, particularly cholecystectomy and hernia repair, Guthart said on a call with investors Thursday afternoon.
With its procedure count ticking upward throughout the first half of the year, Intuitive has upped its full-year forecasts. It now expects procedure growth for all of 2023 to land between 20% and 22%, up from previous estimates of 18% to 21%, Brian King, the company’s treasurer and head of investor relations, said on the call.
“The low end of the range reflects uncertainty around the duration of elevated procedure volumes with patients returning to healthcare, continued slowing of bariatric growth rates in the U.S. and macroeconomic challenges that could impact hospitals and patient spending,” he said, adding, “The range does not reflect significant material supply chain disruptions or hospital capacity constraints.”
Overall, Intuitive brought in revenues of $1.76 billion, up 15% from the same period last year and also an improvement over the first quarter of this year, when it roped in $1.7 billion.
The company also placed even more of the robotic surgery systems during the second quarter: 331, compared to 312 last quarter and 279 during the same period last year. Together, the first half’s additions have brought the total number of installed da Vinci systems to more than 8,000 around the world, 13% higher than where they stood a year ago.
But those new installations aren’t the sole driver of Intuitive’s growing procedure rate. As Guthart noted on the investor call, “System utilization, defined as procedures per installed clinical system per quarter, grew 9% globally year over year, reaching a new high as customers adopt a broad mix of procedures on our systems.”
Despite those seemingly sunny results, however, shareholders were in a somewhat stormy mood. Intuitive released the second-quarter earnings report just after the formal close of the stock market Thursday, but that didn’t keep its shares from taking a dip in after-hours trading: They fell nearly 6% throughout the evening, from a closing price of $347.66 to around $328.
The stock slip may have occurred because Intuitive’s impressive results hadn’t impressed analysts quite enough, according to George Congdon, a senior analyst at Third Bridge.
“Intuitive Surgical’s recent earnings report, while smashing last year’s revenue figures, did not meet analysts’ earnings expectations. While stronger procedural utilization buoyed Intuitive’s top-line revenues, the company reported $1.18 per share in net income compared to $1.33 Wall Street estimates,” Congdon said in a statement sent to Fierce Medtech.
By Friday morning, however, shareholders appeared to have shaken off the slight disappointment, as the stock price had already climbed back above the $340 mark by midmorning.