Intuitive Surgical's profit dips as sales, robotic procedure volumes increase

In the last quarter, Intuitive Surgical saw the number of its robotic procedures continue to bounce back, compared to 2021 during some of the high points of the pandemic—however, lingering COVID-19 disruptions worldwide and earnings slightly below expected worked to drag down the company’s stock price.

Internationally, the volume of surgeries performed with Intuitive’s robots grew by about 18% compared to the fourth quarter of 2021, which late in the year had begun to see the rise of the coronavirus’ omicron variant and a wave of record cases in the U.S. and Europe that peaked the following January. 

But at the same time, 2022’s fourth quarter reflected a resurgence of COVID-19 in China, the company said in its earnings report. When compared to the final three months of 2019, before the pandemic began in earnest, the compound annual growth rate in procedures topped out at about 14%.

Total fourth quarter revenue for 2022—gathered from instruments, accessories, systems and services sales—amounted to $1.66 billion, for growth of 7% over the prior year’s $1.55 billion. And while surgery volumes increased, Intuitive said that foreign currency impacts and a decline in the placement of new systems held back some potential gains. 

The company installed 369 of its da Vinci systems during the quarter, down 4% versus 385 in late 2021. Over the course of the year, Intuitive was able to increase its total instrument base by 12%, from 6,730 to 7,544 systems.

Intuitive posted total sales of $6.22 billion for the full year of 2022—largely in line with the preliminary estimates the company offered earlier this month during the J.P. Morgan Healthcare Conference. That amounts to about an 8.6% increase over 2021’s $5.71 billion; but increases in R&D spending and operating expenses brought the company’s net income down to $1.32 billion, below 2021’s $1.70 billion.

Intuitive’s stock price dipped by about 6% after the earnings report, to about $241 per share.

On a call with investors, CEO Gary Guthart said Intuitive plans to continue large investments in R&D, with a portfolio under development that aims to expand robotic surgery into new categories. The company also plans to put more money into clinical trials during 2023, for newer systems in the future—with total operating expenses growing between 9% and 13%, which will also cover the development of digital products and commercial expansions into the new international markets.

“Given the time required to design and validate new architectures at any given moment, we're typically developing more than one system architecture beyond that in the market,” Guthart said on the investor call. “In the current global regulatory environment, core technology changes often require human clinical trials and substantial review. These are multi-year investment cycles, and we're making good progress. As we start this year, we do not currently expect a new multiport system launch in 2023.”

Meanwhile, Guthart said he expects European approval of the company’s Ion system, for minimally invasive, robotic-assisted lung biopsies. Last year Intuitive scored an FDA clearance allowing its endoluminal Ion platform to integrate with Siemens Healthineers’ Cios Spin mobile cone-beam CT imaging hardware, to provide 2D and 3D imaging during procedures.

“Ion is also a platform with strong opportunities for future clinical applications. We're conducting advanced development and clinical research to extend Ion into other indications in the lung,” Guthart said, adding that the company does not have a forecast for Ion’s clearance in China, due to the ongoing COVID-19 pandemic.