Intuitive(ISRG) - 2025 Q1 - Quarterly Report

Surgical Systems and Regulatory Approvals - As of March 31, 2025, the installed base of da Vinci SP surgical systems is 291, with FDA clearance for multiple procedures[110]. - The da Vinci 5 surgical system has an installed base of 509 as of March 31, 2025, and received FDA clearance for all surgical specialties except cardiac and pediatric[112]. - The company has commercialized various da Vinci surgical systems since 1999, with the latest being the da Vinci 5 surgical system launched in 2024[109]. - The Ion endoluminal system, launched in 2019, has received FDA clearance and various OUS regulatory approvals, expanding the company's offerings into diagnostic procedures[115]. - The company aims to expand the regulatory approvals for the da Vinci SP surgical system in international markets over time[111]. - The company plans to seek additional clearances and approvals for its Ion endoluminal system in OUS markets over time[115]. - The company obtained FDA clearance for the SP SureForm 45 stapler in March 2025, which is useful in thoracic and colorectal surgical procedures[149]. - The company received regulatory clearance for the da Vinci 5 surgical system in March 2024, which is expected to extend over several quarters for a phased launch[153]. - The Japanese Ministry of Health granted reimbursement for five additional da Vinci procedures in April 2024, including lobectomy for benign conditions[155]. - The company anticipates extended timelines for the introduction of new products due to increasingly stringent regulations[148]. - The company has obtained regulatory clearances for various products, including the E-200 generator and redesigned staplers, enhancing its product offerings[153]. Financial Performance and Revenue - Recurring revenue increased to $7.04 billion, representing 84% of total revenue in 2024, up from$ 5.94 billion (83%) in 2023 and $4.92 billion (79%) in 2022[129]. - Instruments and accessories revenue grew to$ 5.08 billion in 2024, compared to $4.28 billion in 2023 and$ 3.52 billion in 2022, reflecting continued procedure adoption[130]. - Service revenue reached $1.31 billion in 2024, an increase from$ 1.17 billion in 2023 and $1.02 billion in 2022, driven by a 15% growth in the installed base of da Vinci surgical systems[131]. - Systems revenue increased by 17% to$ 1.97 billion in 2024, following a flat performance of $1.68 billion in 2023[141]. - Total revenue for the three months ended March 31, 2025, increased by 19% to$ 2.25 billion compared to $1.89 billion for the same period in 2024[184]. - Product revenue rose by 20% to$ 1.89 billion for the three months ended March 31, 2025, compared to $1.58 billion for the same period in 2024[190]. - Service revenue increased by 16% to$ 363 million for the three months ended March 31, 2025, compared to $314 million for the same period in 2024[199]. - Operating income for Q1 2025 increased by 23% to$ 578 million compared to $469 million in Q1 2024[184]. - Net income attributable to Intuitive Surgical, Inc. was$ 698.4 million for the three months ended March 31, 2025, compared to $544.9 million for the same period in 2024, reflecting a 28% increase[185]. - The U.S. accounted for 68% of total revenue in the three months ended March 31, 2025, up from 66% in the same period in 2024[188]. Installed Base and Procedure Volume - The installed base of da Vinci surgical systems grew to approximately 9,902 as of December 31, 2024, compared to 8,606 in 2023 and 7,544 in 2022, indicating strong market adoption[131]. - The installed base of da Vinci surgical systems reached approximately 10,189 systems as of March 31, 2025, a 15% increase from 8,887 systems in Q1 2024[184]. - In 2024, approximately 2,683,000 surgical procedures were performed with da Vinci surgical systems, a 17% increase from 2023's 2,286,000 procedures[163]. - U.S. da Vinci procedures grew to approximately 1,757,000 in 2024, up 15% from 2023's 1,532,000 procedures, with general surgery being the largest specialty[164]. - OUS da Vinci procedures increased to approximately 926,000 in 2024, a 23% rise from 2023's 754,000 procedures, driven by urology and general surgery[165]. - Approximately 732,000 da Vinci procedures were performed in Q1 2025, a 17% increase from approximately 627,000 procedures in Q1 2024[184]. Tariffs and Trade Impact - The U.S. imposed a 25% tariff on imports from Mexico and Canada on February 1, 2025, but the impact on the company was not material due to USMCA certifications[117]. - A 10% universal tariff on imports not subject to USMCA was announced on April 2, 2025, affecting some raw materials and finished goods[118]. - The U.S. imposed tariffs up to 145% on imports from China on April 7, 2025, which may significantly impact the cost of da Vinci Xi surgical systems in China[119]. Operating Leases and Customer Trends - Total da Vinci system placements under operating lease arrangements increased to 864 in 2024, up from 704 in 2023 and 591 in 2022, with 51% of total placements under operating leases[135]. - Revenue from customer buyouts of leased systems was$ 109 million in 2024, up from $74 million in 2023 and$ 72 million in 2022, reflecting customer interest in ownership[140]. - Operating lease revenue was $654 million in 2024, compared to$ 501 million in 2023 and $377 million in 2022, indicating a growing trend in lease arrangements[135]. - Operating lease revenue was$ 195 million for the three months ended March 31, 2025, compared to $148 million for the same period in 2024[195]. Research and Development - The company anticipates continued substantial investments in research and development to support product development initiatives[211]. - Research and development expenses rose by 11% to$ 316.2 million in Q1 2025, compared to $284.5 million in Q1 2024[209]. Financial Reporting and Accounting - The financial statements are prepared in accordance with GAAP, requiring estimates and judgments that affect reported amounts of assets, liabilities, revenues, and expenses[229]. - There have been no new or material changes to the critical accounting estimates since the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[229]. - Actual results may differ from estimates under different assumptions or conditions, highlighting the inherent uncertainty in financial reporting[229].