Intuitive Surgical (ISRG) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 17% year-over-year to $2.04 billion, driven by 18% growth in da Vinci procedures and 73% growth in Ion procedures, with 379 da Vinci systems placed and the installed base reaching 9,539 systems globally, up 15% year-over-year.

• Net income attributable to the company was $565 million ($1.56/share GAAP), up from $416 million ($1.16/share) last year; non-GAAP net income was $669 million ($1.84/share), up from $524 million ($1.46/share).

• The da Vinci 5th generation system launched in March, with 110 placements in Q3 and regulatory clearances in the U.S. and South Korea; over 12,000 procedures completed in six months.

• Ion and SP platforms continue to expand, with Ion installed base up 50% to 736 systems and procedure growth of 73%; first Ion placements in China and expanded early launch in Europe.

• Digital tools and analytics adoption increased, with over 14,000 active My Intuitive app users and 2,000 ORs enabled with Intuitive Hub.

Financial highlights

• Q3 2024 total revenue: $2.04 billion (+17% YoY); pro forma gross margin was 69.1%, GAAP gross margin 67.4%.

• Pro forma net income was $669 million ($1.84/share); GAAP net income was $565 million ($1.56/share).

• Cash and investments ended at $8.31 billion, up $628 million sequentially and $0.97 billion from December 2023.

• System average selling price was $1.51M, up from $1.4M last year; leasing represented 58% of Q3 placements.

• Free cash flow for nine months ended September 30, 2024, was $1.59 billion.

Outlook and guidance

• Full-year 2024 procedure growth guidance raised to 16%-17%; pro forma gross margin expected between 68.5%-69% of net revenue.

• Pro forma operating expense growth forecasted at 10%-12% for 2024; pro forma income tax rate expected at 22%-23%.

• Other income (mainly interest) expected between $325M-$345M; capital expenditures estimated at $1B-$1.2B.

• Management expects continued growth in procedure volumes, with U.S. and OUS markets both contributing.

• Customers remain cautious in capital spending due to staffing shortages, inflation, and macroeconomic pressures.