10-QPeriod: Q1 FY2019

INTUITIVE SURGICAL INC Quarterly Report for Q1 Ended Mar 31, 2019

Filed April 19, 2019For Securities:ISRG

Summary

Intuitive Surgical Inc. (ISRG) reported a strong first quarter for 2019, demonstrating robust top-line growth and increased procedure volumes. Total revenue rose by 15% year-over-year to $973.7 million, driven by a significant 20% increase in instrument and accessory revenue, fueled by an 18% rise in da Vinci procedures. While system shipments saw a healthy 27% increase, system revenue growth was more moderate at 6%, impacted by a higher proportion of leased systems and lower average selling prices. The company continues to invest heavily in research and development, with R&D expenses increasing by 51%, signaling a commitment to future innovation. Despite a slight decrease in operating income due to increased operating expenses, particularly in R&D and SG&A, the company maintained a strong gross profit margin. The balance sheet remains healthy with substantial cash, cash equivalents, and investments totaling $5.1 billion. The company also saw positive developments with regulatory clearances for new products like the Ion endoluminal system and the da Vinci SP Surgical System, positioning it for future growth. Investors should note the continued strategic expansion into international markets and the ongoing investments in new technologies.

Financial Highlights

46 data points
Beta

Revenue

$973.70M

68.8% Gross Margin

Net Income

$306.50M

31.5% Net Margin

EPS (Diluted)

$0.85

Total Assets

$8.23B

Cash & Equivalents

$890.70M

Free Cash Flow

$333.20M

Financial Statements
Beta
Revenue$973.70M
Cost of Revenue$304.10M
Gross Profit$669.60M
R&D Expenses$144.00M
SG&A Expenses$273.40M
Operating Expenses$417.40M
Operating Income$252.20M
Net Income$306.50M
EPS (Basic)$0.89
EPS (Diluted)$0.85
Shares Outstanding (Basic)345.00M
Shares Outstanding (Diluted)358.80M

Key Highlights

  • 1Total revenue increased 15% to $973.7 million in Q1 2019 compared to Q1 2018.
  • 2Da Vinci procedures grew 18% to approximately 282,000 in Q1 2019.
  • 3Instrument and accessory revenue increased 20% to $552.3 million.
  • 4Systems revenue saw a 6% increase to $247.5 million, with unit shipments up 27%.
  • 5Research and Development expenses increased significantly by 51% to $144.0 million, reflecting investment in innovation.
  • 6The company's cash, cash equivalents, and investments totaled $5.1 billion as of March 31, 2019.
  • 7New product clearances, including the Ion endoluminal system and da Vinci SP Surgical System, indicate future growth potential.

Frequently Asked Questions

Intuitive Surgical's total revenue for the first quarter of 2019 increased by 15% to $973.7 million, compared to $847.5 million in the same period of 2018. This growth was primarily driven by increases in instrument and accessory revenue and systems revenue.

The significant 20% increase in instrument and accessory revenue, reaching $552.3 million, is largely attributed to an 18% rise in da Vinci procedures performed. This indicates higher utilization of the installed base of surgical systems.

Intuitive Surgical is heavily investing in R&D, with expenses rising 51% to $144.0 million in Q1 2019, to support a broad range of product development initiatives. Recent regulatory clearances for the Ion endoluminal system and the da Vinci SP Surgical System demonstrate their commitment to expanding their product portfolio and entering new diagnostic and surgical areas.

The company maintains a strong financial position. As of March 31, 2019, Intuitive Surgical had $5.1 billion in cash, cash equivalents, and investments. Operating activities generated $333.2 million in cash during the quarter, demonstrating healthy cash flow generation.