True to its namesake, Intuitive Surgical’s da Vinci robotic surgery system has become increasingly prolific amid the current renaissance period—as in, the resurgence of regular healthcare procedures as the COVID-19 pandemic transitions into an endemic.
For the first quarter of 2023, Intuitive recorded a 26% year-over-year increase in da Vinci procedures, a sharp uptick that caught the company itself off guard and easily exceeded its expectations; in an earnings call Tuesday, CEO Gary Guthart remarked on the “surprising strength” of the quarter’s procedure rate, which he said was led in particular by cholecystectomy, bariatric surgery and hernia repair procedures.
That boom in surgical robot usage in turn led to an increase in the number of da Vinci systems the company installed throughout the quarter. It placed 312 new systems, according to Intuitive’s first-quarter earnings report Tuesday, which brought its global installed base to nearly 7,800 da Vinci robots by the end of March, representing a 12% increase from its total a year ago. Meanwhile, the devicemaker also placed 55 of its newer Ion robotic-assisted bronchoscopy systems during the quarter, compared to just 34 installations in the same period last year, according to Guthart.
On average, the use of each da Vinci system grew 13% year over year, Jamie Samath, Intuitive’s chief financial officer, said on the investor call.
But that surprising run is likely to be of the sprint, rather than a marathon, variety. Both Samath and Guthart pointed out that the increases were largely seen in January and February, while March represented a return to more typical growth rates.
“While we do not expect this level of utilization growth to continue, we actively support our customers as they increase utilization of their da Vinci systems, which in turn lowers their per procedure costs,” Samath said.
Though Samath noted on the call that “it is difficult to precisely characterize or estimate the degree or duration of this impact,” he offered four possible drivers of the quarter’s skyrocketing surgical robot usage rates.
For one, the procedure count was all but guaranteed to improve on a year-over-year basis compared to the first quarter of 2022, which was still facing heavy impacts from the coronavirus pandemic—which has severely stanched the number of routine medical procedures performed throughout the last three years.
The healthcare industry’s ongoing recovery contributed to two of the other growth drivers highlighted by Samath, as patients have increasingly returned to “more normalized healthcare routines” and clinical staffing has improved. Regarding the latter, he said, “It’s not where it was pre-COVID, but I think that’s allowed for some incremental procedures to be performed.”
Finally, per Samath, usage of the company’s robots also improved based on overall growth in demand in the U.S. for general surgery, “particularly benign general surgery,” and outside the U.S. for non-urology procedures.
Thanks to the da Vinci robot’s strong quarter, Intuitive took in a total of $1.7 billion in revenues to kick off the year, up 14% from the $1.49 billion it tallied during the same three months last year.
Even amid those wins, however, the company saw its profits shrink. It recorded a net income of $355 million for the first quarter, compared to $366 million a year prior. That drop came as operating expenses grew 20% year over year, thanks to “higher variable compensation, higher travel costs and increased expenses associated with customer training,” according to Samath. Intuitive also racked up costs as it expanded its workforce, adding about 330 new employees throughout the quarter, per the CFO.
Moving forward, Guthart said on the call, the company will spend the rest of the year focusing on four priorities: increasing global adoption of its robots for “our priority procedures,” seeking expanded regulatory permissions for its newer systems, ensuring it’s able to adequately provide its products and services as it recovers from the constraints of the pandemic and “pursuing increased productivity in our functions that benefit from scale.”