ISRG Stock Falls Despite Q4 Earnings Beat & Robust Procedures

Core Viewpoint - Intuitive Surgical reported strong fourth-quarter 2024 results, with adjusted earnings per share (EPS) of $2.21, exceeding estimates and showing significant year-over-year growth [1][10]. Revenue Details - The company achieved revenues of $2.41 billion, reflecting a 24.9% increase year over year and aligning with consensus estimates [2]. - Revenue growth was driven by an increase in installed systems and a rise in da Vinci procedure volume [11]. Segmental Details - Instruments & Accessories: Revenues reached $1.41 billion, up 23.7% year over year, supported by an 18% increase in da Vinci procedure volume and significant growth in Ion and SP procedures [3]. - Systems: This segment generated $655 million in revenue, a 36.5% year-over-year increase, attributed to higher average selling prices and a decrease in leased systems [4]. - Services: Revenues amounted to $347.4 million, marking a 14.1% increase from the previous year [5]. Margins - Adjusted gross profit was $1.68 billion, up 28% year over year, with a gross margin of 69.5%, an increase of approximately 150 basis points [6]. - Adjusted operating income totaled $927.7 million, reflecting a 49.4% year-over-year increase, with an operating margin of 38.4%, up approximately 620 basis points [7]. Financial Position - At the end of the fourth quarter, the company had cash, cash equivalents, and investments totaling $8.83 billion, down from $9.31 billion in the previous quarter [8]. - Total assets increased to $18.74 billion from $17.74 billion a year ago [8]. Market Performance - Despite strong quarterly results, the stock declined by 2.2% in after-hours trading, likely due to prior anticipation of results [10]. - Over the past six months, Intuitive Surgical's shares have risen by 31.5%, outperforming the industry growth of 3.9% and the S&P 500 Index's 12.7% increase [14]. Future Outlook - The company plans to open new manufacturing facilities for da Vinci 5 and Ion systems in 2025, which is expected to enhance future growth [12]. - However, a slowdown in bariatric procedures and a gradual decline in revenues per procedure for Instruments & Accessories are anticipated due to the rise of GLP-1 medications [13].