Intuitive Surgical has reported 19% growth in procedures performed using its da Vinci robotic surgery devices in the fourth quarter of 2018.
The preliminary results continue a year of expectation-beating performance by the robotic surgery leader, which looks on track to end the year with procedure growth five percentage points above the midpoint of its forecast at the start of 2018.
Shares in Intuitive rose 7% following the news as investors digested another set of figures that suggest the company is thriving despite increased competition.
Intuitive's time as the lone player in the robot-assisted surgery sector is long since over, but for now its figures remain as healthy as ever. At the start of 2017, Intuitive predicted procedures, a key metric for the company, would grow by 9% to 12%. In reality, Intuitive eased past that target to record 16% growth in procedures.
Going into 2018, Intuitive dialed up its procedure growth forecast to 11% to 15%. That still proved to be too conservative. Having recorded procedure growth of 15%, 18% and 20% over the first three quarters of 2018, Intuitive appears set to close out the year with a 19% increase.
The upshot is Intuitive has penciled a full-year growth rate of 18% into its preliminary results for 2018. When Intuitive last raised its procedure growth guidance in October, it told investors to expect 17% to 18% procedure growth in 2018.
Intuitive's figures are unaudited and could therefore change before it publishes its full-year results, but the company has enough confidence in the numbers to post them as its preliminary financials.
Other aspects of the preliminary results also suggest Intuitive's run of positive figures continued into the fourth quarter. Revenue for the fourth quarter came in at $1.05 billion, just above the averaged analyst forecast of $1.03 billion. Full-year sales also came in slightly ahead of the analyst forecast.
Intuitive achieved the results at a time when interest in robot-assisted surgery was increasing but the anticipated surge in competition was just beginning. In recent years, companies including Auris Health, Medtronic-acquired Mazor Robotics and TransEnterix have received FDA clearance for surgical robots. But the competition is set to intensify as the impact of moves by Medtronic, Johnson & Johnson and others are felt.
There are reasons to think Intuitive can remain dominant in the face of the competition. Last year, Intuitive shipped 926 da Vinci units, compared to 684 systems in 2017. Almost 30% of the 290 units shipped in the fourth quarter were distributed under operating lease and usage-based arrangements that lower upfront costs for hospitals. One way potential competitors, such as CMR Surgical, hope to chip away at Intuitive's dominance is by offering devices as a service to lower upfront costs.
Hospitals that already use da Vinci systems will need compelling reasons to replace them with competing technologies. Until that happens, Intuitive will continue to profit as existing customers buy replacement parts from its instrument and accessory business, which accounted for more than half of the company's sales in the fourth quarter.