Intuitive Surgical pulls off 15% revenue growth despite ongoing COVID, supply chain challenges

Two years into the pandemic, medical devicemakers are still weathering a perfect storm of reduced hospital procedures, supply chain slowdowns and, of course, continued waves of COVID-19.

In spite of all that, Intuitive Surgical was able to kick off the year with a modest win, putting up first-quarter revenues of $1.49 billion—a 15% jump compared to the $1.29 billion it earned in the same period of last year, but a minor slip from the $1.55 billion it raked in during the prior quarter, the final three months of 2021.

The year-over-year growth stemmed from a 19% surge in the number of procedures performed around the world using Intuitive’s da Vinci robotic surgery system. Those additional uses were led by “bariatric procedures, cholecystectomy, hernia repair and rectal surgery” in the U.S., CEO Gary Guthart said during a call with investors on Thursday.

Outside of the U.S., according to Guthart, “international use of da Vinci is diversifying beyond urology in several countries, with growth in oncologic procedures in thoracic surgery, gynecology and general surgery.”

Alongside that sustained procedure growth—Intuitive also saw its usage jump 19% in the fourth quarter of 2021—the company also expanded the physical reach of its robotic systems. It placed 311 da Vinci robots during the quarter, up 4% year over year. That brings its total installed base to more than 6,900 systems, representing about 13% growth in the size of its footprint since the end of the first quarter of 2021.

Those promising numbers led Intuitive to slightly raise its estimates for the full year. Compared to an original prediction that procedures would grow between 11% and 15% for all of 2022, it’s now projecting growth of at least 12%, topping out at 16%, Brian King, the company’s treasurer and head of investor relations, said on the call.

“The low end of the range assumes ongoing COVID and staffing pressure at hospitals and assumes some continued choppiness with COVID throughout the year. At the high end of the range, we assume COVID-19-related hospitalizations around the world decline throughout the remainder of 2022, and there are no additional significant impacts from further resurgences,” King said, though he added that the updated range “does not reflect significant supply chain disruptions.”

The company is expecting that growth to get a boost from the many updates and upgrades that are currently in development for the da Vinci system. Among these are its Ion technology, a robotic-assisted platform to perform minimally invasive lung biopsies, which Guthart told investors has been submitted for European approval, and the My Intuitive procedure data analytics app, which is set to launch in Italy, Spain and India in the second quarter of this year, he said.

Meanwhile, Intuitive is also “in conversations with the FDA,” per Guthart, regarding a re-submission of its previously cleared, artificial intelligence-powered 3D visualization tech as it adds new segmented organ models to the system.

Overall, much of the newness for Intuitive stems from progressive updates to its existing systems, rather than total overhauls and novel launches.

“In part, that's easier. Those kinds of incremental adds to platform architecture that is pretty mature are easier for the customer base to absorb, and they also compound utilization. They allow them to get more utility out of the capital they have. They get higher throughput through it, and they do more procedures with it,” Guthart said.

But Intuitive does have some “bigger structural changes” up its sleeve, he added, summing up the company’s approach to innovation: “For us, I want to make sure that every time we take a step, the customers value it, that it’s done with them in mind rather than with us in mind. We continue to have that philosophy, and we’ll pursue it.”