Summary
Intuitive Surgical, Inc. (ISRG) reported a decrease in total revenue for the second quarter of 2014, falling to $512.2 million from $578.5 million in the prior year's quarter. This decline was primarily driven by a significant drop in da Vinci Surgical System unit shipments, down to 96 from 143 year-over-year. Despite lower system sales, recurring revenue from instruments, accessories, and service saw a modest increase of 2% to $368.5 million, now representing 72% of total revenue, underscoring the growing importance of recurring revenue streams. The company also recorded a pre-tax charge of $9.6 million related to product liability claims in the second quarter, adding to a $67.4 million charge from the first quarter, totaling $77 million for the first half of the year. While overall procedure growth moderated to 8% for the first six months of 2014 compared to 18% in the same period last year, the company continues to see growth in areas like U.S. general surgery and international urology. Significant strategic moves during the period include the launch of the new da Vinci Xi Surgical System in the U.S. and the acquisition of Japan distribution rights. The company's robust balance sheet remains a strength, with $2.0 billion in cash, cash equivalents, and investments as of June 30, 2014, though this figure decreased from year-end 2013 due to a substantial $1.0 billion share repurchase program.
Financial Highlights
46 data points| Revenue | $512.20M |
| Cost of Revenue | $167.80M |
| Gross Profit | $344.40M |
| R&D Expenses | $40.20M |
| SG&A Expenses | $161.20M |
| Operating Expenses | $201.40M |
| Operating Income | $143.00M |
| Net Income | $104.00M |
| EPS (Basic) | $0.31 |
| EPS (Diluted) | $0.31 |
| Shares Outstanding (Basic) | 332.10M |
| Shares Outstanding (Diluted) | 338.40M |
Key Highlights
- 1Total revenue declined by 11% year-over-year to $512.2 million in Q2 2014, driven by a 33% decrease in system revenue.
- 2Recurring revenue, comprising instruments, accessories, and service, increased by 2% to $368.5 million, constituting 72% of total revenue.
- 3da Vinci Surgical System unit shipments decreased significantly to 96 units in Q2 2014, down from 143 units in Q2 2013.
- 4The company recorded a $9.6 million pre-tax charge for product liability claims in Q2 2014, in addition to a $67.4 million charge in Q1 2014.
- 5The new da Vinci Xi Surgical System was launched in the U.S. in April 2014, and the company also reacquired Japan distribution rights.
- 6The installed base of da Vinci Surgical Systems grew to 3,102 units as of June 30, 2014.
- 7Cash, cash equivalents, and investments decreased to $2.0 billion as of June 30, 2014, largely due to a $1.0 billion share repurchase program.