Financial Data and Key Metrics Changes - First quarter revenue was $2.25 billion, a 19% increase year-over-year, with constant currency growth at 20% [45][46] - Pro forma gross margin for Q1 was 66.4%, down from 67.6% in the previous year, primarily due to higher facility costs and a greater mix of lower-margin products [54] - Pro forma net income for Q1 was $662 million, or $1.81 per share, compared to $541 million, or $1.50 per share, in the same quarter last year [58][59] Business Line Data and Key Metrics Changes - Da Vinci procedure growth was 17%, with a 15% increase in the installed base of Da Vinci systems [38][39] - ION procedures grew 58% to approximately 31,000 in the quarter, with 49 ION systems placed [50][51] - SP procedure growth accelerated to 94%, driven by strong growth in the U.S. and international markets [28][52] Market Data and Key Metrics Changes - U.S. procedures grew 13%, with notable strength in benign general surgery, while OUS procedures grew 24%, driven by markets like India and Korea [40][41] - Capital placements included 367 systems, a 17% increase from the previous year, with 204 systems placed in the U.S. [42][43] - The U.S. capital environment remains strong, while OUS markets face constraints due to government budget limitations [72][74] Company Strategy and Development Direction - The company is focused on the full launch of Da Vinci 5 and increasing adoption of its products through training and market access efforts [29][30] - Plans to optimize production costs and adjust supply chain strategies in response to changing trade policies [10][11] - Continued investment in R&D and innovation to drive long-term growth and improve product quality [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term demand for minimally invasive care despite current trade policy uncertainties [11] - The company raised its full-year 2025 procedure growth forecast to a range of 15% to 17% [61] - Management acknowledged potential impacts from tariffs and government budget constraints on capital spending [63][64] Other Important Information - The company opened new manufacturing facilities in California to expand its U.S. manufacturing and R&D footprint [55] - Pro forma operating expenses increased by 12% compared to the previous year, driven by higher headcount and facility-related costs [57] Q&A Session Summary Question: Impact of tariffs on annualized basis - Management indicated that approximately half of the tariff impact is from U.S.-China trade, with the impact expected to increase each quarter [68][69] Question: Capital environment comparison to previous years - Management noted strong customer response to Da Vinci 5 and a relatively strong capital environment in the U.S., while OUS markets face budget constraints [71][72] Question: Inclusion of European reciprocal tariffs in estimates - Management confirmed that the 1.7% estimate includes anticipated European tariffs and emphasized a cautious approach to mitigating tariffs [79][80] Question: Confidence in raising procedure volume forecast - Management cited strong Q1 performance and positive customer feedback as reasons for the early forecast increase [86][87] Question: Drivers of robust OUS growth - Management highlighted strong growth in early-stage markets like India and Taiwan, as well as solid performance in the UK [100][101] Question: After-hours surgery and cardiac surgery growth - Management discussed the importance of after-hours surgery for patient access and the growing interest in cardiac surgery as a viable option for minimally invasive procedures [114][116] Question: Force feedback technology usage and clinical strategy - Management provided insights on the current use of force feedback instruments and the ongoing studies to validate this technology [120][124]

Financial Data and Key Metrics Changes - First quarter revenue was $2.25 billion, a 19% increase year over year, with constant currency growth at 20% [29][30] - Pro forma gross margin for Q1 was 66.4%, down from 67.6% in the same quarter last year, primarily due to higher facility costs and a mix of newer products [34] - Pro forma net income for Q1 was $662 million, or $1.81 per share, compared to $541 million, or $1.50 per share, in the prior year [37] Business Line Data and Key Metrics Changes - Da Vinci procedure growth was 17% in Q1, with significant strength in general surgery in the US and notable performance in India and Korea [9][26] - Capital placements included 367 da Vinci systems, a 17% increase from the previous year, with 147 being da Vinci V systems [10][27] - ION procedures grew 58% to approximately 31,000 in the quarter, with 49 ION systems placed [32] Market Data and Key Metrics Changes - US procedures grew 13%, driven by benign general surgery, while OUS procedures grew 24%, led by India and Korea [26][78] - Procedure growth in China improved from the prior quarter, primarily driven by urologic procedures [26] - The installed base of da Vinci systems grew 15% year over year [25] Company Strategy and Development Direction - The company aims to assure product supply globally and optimize production costs amid dynamic trade policies [7][8] - Focus on the full launch of da Vinci V and increasing adoption of focused procedures through training and market access efforts [19][20] - Commitment to building industrial scale, product quality, and manufacturing optimization [19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in procedure growth, raising the full-year 2025 procedure growth forecast to 15% to 17% [39] - The impact of tariffs is expected to add approximately 1.7% to cost of sales, with a potential increase in impact as the year progresses [24][41] - Management remains cautious about the capital environment, noting potential constraints in key OUS markets due to government budget limitations [48][80] Other Important Information - The company opened new manufacturing facilities in California to expand its US manufacturing and R&D footprint [35] - The average selling price for da Vinci systems increased to $1.62 million, driven by a higher mix of da Vinci V placements [31] - The company is focused on enhancing its digital tools and computational capabilities to support surgical performance [17] Q&A Session Summary Question: Impact of tariffs on financials - Management indicated that approximately half of the tariff impact is related to US-China trade, with the remainder from imports into the US from other countries [45] Question: Capital environment and customer response - Management noted strong customer response to da Vinci V in the US, with leasing arrangements providing flexibility amid capital constraints [48] Question: OUS growth drivers - Management highlighted strong growth in early-stage markets like India and Taiwan, with ongoing efforts to engage key opinion leaders and surgical societies [80]