- Intuitive Surgical on Tuesday posted second-quarter results that easily topped Wall Street expectations as revenue climbed 72% from a year ago to $1.46 billion, a gain of 13% from the first quarter, lifted by strong placements of its da Vinci robots and increased use of its installed base of systems in hospitals.
- Led by recovering procedure growth in the U.S. and China, categories such as bariatric surgery, hernia repair and cholecystectomy drove the demand. Intuitive CEO Gary Guthart cautioned, however, that "the pandemic is not behind us, and additional infection growth may again strain hospital resources and impact our results in the future."
- The company raised its forecast for procedure growth this year to 27% to 30% from a year ago, above its previous outlook for an increase of 22% to 26%. However, Baird and Evercore ISI analysts separately noted that the outlook does not reflect any significant disruption from new COVID-19 outbreaks and the delta variant's emergence as the dominant virus strain globally.
Intuitive's recovery from COVID-19's dampening effects on healthcare demand picked up momentum in the second quarter, after the company began the year by warning that a spike in cases of the virus could curtail elective procedures. Da Vinci procedure growth rose just 1% in 2020 as hospitals delayed elective surgeries and capital spending during the worst of the pandemic.
As COVID-19 cases began to decline again in January, robotic surgery bounced back in February and March, and the momentum has now accelerated through the second quarter.
Analysts at Baird called use of the company's installed base "the most encouraging data point" in the quarter, noting da Vinci utilization by surgeons has rebounded to near all-time highs. "The field needs more capital!" the analysts said.
On the second-quarter call with analysts, Guthart said use of the company's systems surpassed pre-pandemic levels in the quarter, and system placements came in above expectations.
Worldwide da Vinci procedures jumped 68% from the year-ago period, when hospitals were focused on COVID-19. A number of procedures that were deferred during the pandemic were rescheduled and performed in the latest quarter, the company said.
Intuitive shipped 328 da Vinci systems in the second quarter, an increase of 84% from the same period in 2020. The pace of shipments was the company's second highest ever and more than Wall Street was expecting, according to the Baird analysts.
Intuitive's installed base grew to 6,335 systems, up 10% from a year ago. Second-quarter net income rose to $517 million from $68 million.
The Baird analysts noted that the company did not include in its raised forecast any potential impacts from the emergence of the delta variant, global vaccination progress, hospitalization rates, the possibility of new lockdowns, or supply chain constraints.
"While still hard to quantify, there likely remains some pent-up demand although likely less now than a few months ago," the analysts wrote in a note to clients.
In Europe, da Vinci procedure growth varied by country based on the pandemic's impact, with strong demand seen in the U.K. but a slower recovery in France, Italy and Germany, Intuitive executives said on the call. Procedure growth in China remained strong due to expansion of the installed base of systems, but growth in Japan was affected by a relatively slow rollout of vaccines and localized lockdowns as the country works to prevent resurgences of COVID-19.