Intuitive Surgical (ISRG) 21 Jul 202020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Intuitive Q2, 2020 Earnings Release. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded.

Now I'd like to turn the call over to Senior Director of Finance, Investor Relations for Intuitive Surgical, Calvin Darling. ahead. go Please

Philip afternoon, conference Good Guthart, to second Investor Officer; Intuitive’s CEO; introduce pleased Thank Head our With and me earnings of and Financial Chief call. Mohr, Gary whom today, quarter I'm Marshall to you. Relations. our welcome Kim, we our have

lead As a our with support the Phil, plan over team. me, for passing to I role Investor to while continue in Relations on

deemed today’s to to February risks like forward-looking These inform that XX-Q, call filed XXXX, would may may April uncertainties. filings, in I Exchange and XX, on are be as a described on Commission results those begin, we XXXX. Actual result Before detail from of on expressed in contain implied including our comments and Form statements. X, you materially and Securities recent and certain mentioned risks differ Form our most or uncertainties filed XX-K

available be website. be statements. or that can such website forward-looking conference found Please our cautioned filings under for have page. our Investor on audio press intuitive.com data Today’s undue our on place financial will and call are SEC release supplementary to Relations this been Latest Investors Events posted Our reliance website through SEC’s note on tables at the replay to section the at website. our not

And review Gary provide will we followed the will a I by release operational business session. second and as our provide Philip procedure results, our present consist perspective question-and-answer host press highlights illustrating in will then da a on to our financial quarter Vinci highlights, weekly details. format additional Gary. will XXXX that, discuss quarter’s Marshall will regarding it earlier procedure a of quarter, charts is described you this of posted addition, With question-and-answer which intended also results with turn finally, and Today’s our over In today, to have we the of business. session. will trends, providing COVID-XX detail of impact announced

our Thank you and the for joining quarter, the us today. our describe we forward. taking On actions priorities going call, experience in we'll this are

past Our and our patients, is the focus and care in employees. and our teams, of communities now well-being the safety

ended compared XXXX. Turning driver been down the first serve. QX, this with of XXXX our the QX, We decline The for communities XX% customers procedures. global growth underlying COVID-XX and to that has

saw to categories, urology returned were in and of procedures procedure upon run hospital, we While resources of above patient's of decline. above experienced gynecology comfort greatest this with hospitals in number uniform. from types dependent supplies seen by the recovery intensity PPE procedure all resilient, of staff, and relatively We've XX% outreach. were the and patient thoracic few testing procedure of to adequate lows rates Recovery physical period. COVID declines availability while region, Rates as pre-COVID to return a over the months the more

of regional new As accounting regard surgery to see base in installs installed growth for continued XXX clinical we to procedure predictions QX, represent With through we will the systems new a QX, call. XXXX X% installed and some XXXX. stand capacity in differences difficult. capital XXX in future COVID XXXX. This trade-ins. domestically later in QX, placements, XXX some and internationally Phillip The take of of XXXX compares examples hospital after in on installs making here QX, both installs in regions, we in the for and you growth tends July,

placements some are quarter, prior the strong capacity Hospitals than frankly, While know our utilization demand these performance hospitals in coming and the before numbers and prior and absorb larger a in year procedure capital they capital. into than availability strong installing expectation the the we to one. existing are second the quarter, between greater in lower is IDN due U.S. at seek of system That said, correlation form to will Asia

mid-term region. system back Because and capital growth see near applied variability globally, placement evaluating are will this locales take period, challenging expect is environment for and a differently, interest to we you placement expenditures see future principles remain approaches constrained. some hospital being COVID we by procedure Marshall the in capital placements, broadly. significant average call. on later impacting new in as through on during we risks So to Stepping and COVID-XX that hospital trends and wears surgery

capability, patient. see surgeries stabilize that growth testing managed risk in During a response scarce, the hospital delayed can rapid is PPE to if their area, of to initial their are COVID I be with resources their train catchment workforce, local and and and first align the a

in material staff triaged sites diverting of either ramp of impacted. patients of the four within alternative directors, less up surgery ICU or care to the sites by program resources patients become up, need and As the walls free in back hospital,

to focused or shape of extent diagnostic that availability resources of in those for focused our education the drivers visits within last vary tale will physical COVID we're of likely finally, follows: duration now. well-being of of Intuitive to control. on COVID centers on hospital procedures expect one, and health come and the of our both a material spread human, finances. recovery priorities be occurring illness, regionally, likely and outreach the communities. a back. uncertain. the quarters. ultimate surgery our and a and first, communities Add recovery for represent to The diagnostics customers, we're surge have The from and outbreaks, care that surgery our returning and be COVID and markets, in sustained significant of and patient either anecdotal and are evidence They of secondary The recovery employees disease, At timing as many core that economy long remains treatment, non-COVID and we diagnostic is We will growth and other visits the initial observed or concurrently delayed may treat broader in the activities to on and our health predicated relative of the comfort

tracking and protocols, with which our produce and to X in others we foundation safety have As and donate PPE. also million the COVID and date our and working employee We're in instituted PPE has been live, our methods. and work we ramped over in to for communities delivered our performance health refining customers communities, of pieces having to

focused we and Second, on management. chain inventory supply

to and relentless been So partners. far, teams of our chain availability product supply has Thanks the our strong. work

been Third, high and that priority and we is Fourth, the recognizing financial in we coming by received evaluating quarter. program the which program so. likely post-COVID to implemented should MIS invest those the in more programs, the in quality durable our customers. not timeliness customer likely important in that of be high the relief to our less post-COVID. has is incurrent our environment, well activities years accelerated demand Fifth, The design continue for be we're

Finally, we're constraining where suboptimal it in spend environment. is we the current believe

introduce result use additional to of Turning uses we will da and durability. beyond our will extended select quality and instruments, eight our beginning instrument vary the instrument, to that two lifespan, is production design and QX years Vinci per use of use resulted set Arista use the investment part enable increased from in technologies of in an XX have continuous program. and significant year, X for improved updated instruments the with to this and and current plan of XI, that Extended

concurrently instruments price most acuity we'll in addition, are that of commonly In the lower lower some procedures. used other

for and are where to experiences patient patient outcomes, total cost acuity in lower more dedicated experiences, cases, understandably team treat patient products pursuit customers our are is aim, to high better We defined lower support services and our better in duration the episode. per substantial. complex care long-term procedures of and quadruple opportunity shorter customers' as The better acuity Both cost sensitive.

instruments every used risk procedure. are under Some in

the acuity our and So are helps use fastest those which lower performing program all growing particular procedures. extended cases, in among customers,

out, the a products customers increases, scale, us broadly. for step I this us opportunity program performing giving and lower manufacturing driving design our for to the cycle commitment invest value highly competitive, our journey. of virtuous share allowing is to customers, allow customers another in I&A savings these program in use acuity rolls more will to be at MIS approaches. with volume to with to them This and procedures our described our As non-robotic adjustment have cost

Our our margin substantially We're pleased years this COVID. It impact customers and is relative right not program affected in through impact bring been in to our has take is timing extended Marshall the Intuitive implications of for to you customers decision for to use fortuitous making, will now. but therefore call. the program long-term. gross our later near-term our financial and will it the its for negatively revenue, program The instruments.

advanced instruments. Turning to

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to back. the invasive not improving will care the my let's be absorbed, COVID-XX yet approach cannot pandemic. concluding North the I Star. future, the event remarks, remains the quality important this step aim more lessons When see minimally so. We our quadruple are prepared from end high Before of A believe less balanced to

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our are Second, them customers their of adapted different according stages continued to support in at and different conditions, we'll customers this specific needs. their period, to support

finally accessories, And detail. period through our turn you financial over during change. endoscopy matters advancing and who’ll priority call Marshall, disciplined Third, programs. spend systems the take greater management now intelligence programs, instruments, I'll a to of in

of will reconciliation GAAP performance compared our with highlights remarks. forma as with between describe follows: quarter. my business I a GAAP XXXX quarter, and metrics for performance and the the second quarter A is also on XX% summarize will XX% afternoon. I quarter decreased or were Good website. procedures forma second posted non-GAAP pro decreased later our pro approximately second compared of last in our Key our basis. approximately results the prepared XXXX, on

XX% year, XX% compared and approximately system with of and compared Vinci and XX% measured with systems X,XXX systems compared of year clinical last system declined over year. quarter. declined decreased to quarter. expanded Utilization by placements last systems This with the compares rate installed last procedures decreased with XXX XX% We last by compared last of per XX% in systems. gross field last year, quarter last approximately with da quarter our X% XXX Second XX% base systems systems XXX

the quarter, level middle first Let pandemic and Germany of first dynamic, to characterized first the In procedures among around quarter nearly portion that market. pre-COVID-XX we impact average to by compare which on complete the U.S., of in two In posted of levels. it this system levels, the by procedure measured how through graph and geographies. started first impact two of COVID-XX June varied of graph, Relations placements quarter. Investor the and showing the procedures the volume of me the as China, weeks walk have we COVID-XX second in website. a varied Japan, To and XX% grew of your procedures weeks have pre-COVID-XX of the our we of in assist U.S., at the The significantly understanding

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expect decline and spread way We July, as treatment further resources to Vinci and dedicate other physical in hospitals in to procedures. human a the see continues surgeries to da COVID-XX pandemic of the from

year-over-year Japan had UK, procedures a delayed capital spending, experienced in sales large given while impacts year-over-year, grew Italy growth, Europe hospitals lower Second widely markets. and their budgets, the the in of procedures COVID digit COVID-XX. and quarter revisit and Capital France, Korea reflected and declines. the U.S. of capital on In single with China, lower well impact COVID Europe, as Germany experiencing these impact varied while

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statistics and follows. revenue as Additional are trends

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U.S. in and As expected. issued procedures quarter, the second more credits the in the than quickly Europe were less recovered

customer be anticipating now $XX of the are in relief $XXX We program the to million. million of cost total the range will

in of representing XX placements prior Second China, quarter greater a to year prior placements the included total relative into quarter. proportion

with revenue most current economic As would current alternative systems XX% percent quarter placements will Greenfield XX% has compared leasing quarter. of quarter placements and environment can run is prohibited in year. likely XXXX, fluctuate within $XX XX% approximately are in of quarter $X,XXX predict. increase, significantly seek hospital last anticipate as worldwide of reflecting with continue hospitals, million leasing existing historical to procedures trade-ins declined. with $X,XXX $XX be do and placed leasing decline. first of procedure activity revenue Trade-ins quarter over compared rates. be in XX% $X of in of last with just last so. pressures China in procedure more declined Instrument and customers financing the has represented to the revenue of per an recognized to quarter. Leasing buyout inventory lease as compared per COVID-XX Trade-in last the buyout We and compared or represented accessory arrangements than reflected procedure, usage million quarter million We Lease difficult will and and second quarter-to-quarter varied

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with like hysterectomies hernias commonly inguinal In will with of cholecystectomy, price acuity U.S. the and/or with associated certain benign and simultaneously, we the and reimbursement instruments Combined lower in procedures, addition savings procedures lower the in lower accessory and used instrument extended will Overall, to Intuitive. pricing and resultant instruments be instruments, use the in approaches. revenue result cost lower competitive use procedure instrument non-robotic procedures these extended per MIS lower for will I&A

instrument million would been example, For lower use the $XXX all have million lower. in be SP to systems usage, the into markets. instrument reported, SP of less XXXX, greater were depended place cost will per extended procedure and had The than procedure Five of our will instruments would upon for quarter elasticity revenue available available impact second future $XXX have been mix, impact XXXX pricing placed of enable and and revenue the COVID-XX. measured volumes, the the penetration on these and I&A X% INA been of for rollout systems, both actions whether reflecting in of been

hands clinical rollout to surgical putting procedure our placements has the chain. system colorectal be systems measured, the by in Vinci COVID-XX pathways in pursue our three SP Ion to is related COVID-XX. of We of accounts. training the excluded da we optimize Ion will information an systems system procedure. and continue perform and placements indications while were Ion in supply the also overall with users, procedures delayed additional associate experience system Our quarter, systems ability impacted and placed from trial SP

XX we the of we is our be to the XX placed optimize when supply XX included measured, in into PRECISE quarter into study compared Europe, while in and quarter into Our XX the The due into into XX XX XX rollout last systems XXXX. training China, and second chain. the U.S., system we completed. clinical quarter COVID-XX, with Japan of will completion XX quarter. quarter, of predict eight Europe, Japan second second China and study the Current compared Outside in to XXXX cannot delayed Ion into will and pathways continue the in systems be of PRECISE with placements

by quarter the Pro reflecting quarter with of inventory reflects relief quarter. The XXXX, The higher costs last customer mix. last gross excess and associated XX.X% system operating quarter in higher decrease second partially expenses. to ASPs for XX.X%, with program with production. on second the low period of margin of obsolete primarily compared gross and XXXX geographic compared second Moving the for margin and offset quarter, was abnormally and forma XX.X% a XXXX favorable charges,

inventory primarily million, approximately quarter instrument Second and fulfill products, charges able of $XX were which customer as are a vision or more demand decreased now last needs with new reflecting system, products. to capable we generation result

with revenues the COVID-XX, the ensure absorbed and with last investing relief compared which operate travel employee we in and in period the cost cost As of with program. impact below forma including employee result marketing to programs and pandemic of reduced offset be associated higher second curtailment related and the training, second follows: overhead our with of employees particularly COVID-XX, costs labor by and PP&E safety work margins. partially the reflected may at as expenses and well-being, in associated quarter Spending of will COVID-XX. X% operating expenses, XX% quarter this events Spending other levels costs production quarter. compared during will have direct decreased and XXXX, may pressured increased under by of normal levels, product Pro in

customers. We to support will continue our

on innovation quadruple in aim. the invest focused to continue will We

We in ensure to customers. in our supply manufacturing invest supply our for will chain

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to like eliminate spending due ineffective We events. hospital that COVID-XX, surgeon will and is

sales and hiring the appropriate. reduce manufacturing will roles of We like volume-related employees as reps

continue believe for benefits to and have we the business expand long-term. computer-aided We opportunity acute continue the invest the to around to interventions we’ll that surgery of a unique the in and world,

associated the to and between with subsidiaries the XX% per expectations share effective for the conclusion tax a $XX or an to independent charge of foreign quarter with IRS, charging reflecting rate compared based share diluted million second Our a third-party was case pro of forma for tax XX%, XX.X% compensation. our related $X.XX

income, Our actual taxation changes and by in local one-time in made mix the geographic tax with rate with of of will impact items. changes fluctuate authorities

share $XXX second GAAP XXXX quarter pro per forma income share $X. $XXX XXXX, net $X.XX of net for Our million million of $XX per or or or for $X.XX was last net our compared per a results. second the second XXXX, million XX XXXX, the million $XXX the of quarter or per million GAAP share and per $X.XX income $X.XX income quarter. second GAAP $XXX now million net was and compared investments did quarter. of forma ended of at excess last quarter the or per the March with share share, I’ll from We infrastructure. on quarter employee $XXX or the quarter billion with offset and with GAAP $X.XX Cash items, associated with income pro investment summarize in acquisition not IP cash settlements. of by was generated XXXX. are capital operations XX, charges, amortization repurchase income of billion our adjustments in intangibles our and and compared We quarter. and working shares stock-based partially any with $X.X net for $X.X benefits legal outlined tax related quantified include between GAAP The and website awards, and share compensation and stock employee for and

with Our customers thoughts to in lower work flexible financing. deployment providing recognize hardship on Vinci including more we on of the ease COVID with the current that customers, and capital order. will the We following burden our utilization, customers are da places

We supply, will inventory levels ensure chain to ensure build of particularly supply appropriate resume. customer secure as procedures and

our We invest will securing in customers.

with practice. Philip, procedure turn over our go over prior We And that, will to like open repurchase consistent who with to it program will our I'd continue our market performance.

Marshall. you, Thank

approximately XX%, quarter. during XXXX, to quarter last second XX% compared and growth quarter decrease XX% second overall the of procedure Our was of

a the and recover and quarter procedures Our quarter. in OUS worldwide in April QX to troughed procedure decrease basis, in decrease continued decrease the driven throughout was a in U.S. On procedures X% markets. XX% by a

we investors the dynamics worldwide the also to in run June, levels pre-COVID rates in to this the trend trended continues, run earlier rates procedure pre-COVID Although, procedure levels June. assuming in closer from discussed U.S., given closer trending caution call. In

However, Texas, a California COVID end benign the like future procedures as fluctuate procedure and cases. the that may a encounter bariatrics, such QX, gynecology. decline Florida of recovery of at procedure states saw broad in most end customers during we increased procedures, performance and of From the and biggest standpoint including hernia QX, as had

U.S., there states were Within were geographic that differences those between the hit were that harder by and not. COVID

during geographic example, impacted State outbreaks strong. For a levels strategies run-rate recovered while pre-COVID to the did in and a in York containment of the on will was the growth, growth role quarter of procedure U.S., Florida basis, New Asia driving specific not. differences. play timing Outside procedure COVID

our South these we with the XX% grew investors QX, also declines chart QX, at performance remained would provide second which the of Relations dynamics slower points caution We albeit over the the on strong grow global a growth continued to in Investor saw exception proxy Japan strong, China Germany, in at to use rate. quarter. quarter. the recovery. Europe inform but in in our shown China and of in broad investors data website, Korea As not procedure a Western was to as for

of trends. forward prepared and of uncertain to concludes we COVID QX our scope That aren't uncertain global continue indicative economic and of the pandemic procedure and duration recovery the timing believe results normalization, remarks. Given that

call to now open your questions. will We the

of from David line Lewis with And Morgan go will ahead. Stanley. come question Instructions] first the Please [Operator

Can me you afternoon. Good okay? hear

David. can, We Yes.

choppy A Thanks. there. Great. little

you. a So the of couple program. on to the for be Gary, extended me, focus the call Obviously, for questions is of instruments going

where is sort look, you've price your you sure you, for I'm Gary, most one extensively TAM. drive of lower in customer technology to the maybe technology So democratize industries which elasticity. studied

landscape just Marshall a on sense talked improvement some for given in easier. you, I quick Medtronic for about are a in so say, J&J cost of the this Marshall. seen Can then move to I who've around framework based investors also And competitors utilization slip, how X% a drop line you take these revenue. a to going getting And think now about think follow-up then had improvements? competitive kind your when why of us give I&A And time is

Yes. Thank appreciate question. the I you.

volume first think accessed that is changes answer question do that technology? our the The we the procedures by of yes. might On it of be that to

little question it near-term hard bit a think to timeline of because I just the the predict will the I in COVID do A to timeline. lot and have real will think recovery. be with

it. On two we think help, that’s extent why our to will right. that we with can did some they regionally. that which want of preference the domains, and the them it like question And we years kind over them to process think that of think years, help we out and timeline, working look clearly general if it taken to customers These time. blur different improvements on But you we surgery changes procedure So also get with economics, they couple a we have at a have speed happens. products, to want use that manufacturing have use to for products, been use our and but will broadly broadly

we’ll doesn't we company little in we we done customers, the being expeditiously think now. what help we it that think on as think happy And timeline it too look I appreciated I as have it be will a the will that it we be our be overtime, have fancy back could. done thought and appreciated it or that it,

us revenue, so be if on you it. give XXXX for would sense sense commentary of Just what I program impact or the study or EBIT shift margin impact, appreciate on maybe on impact. gross trying the Marshall much. and And of the helpful. The gross very I&A a this then margin apologize I a to XXXX? Okay, 'XX I of X% revenue Can $XXX missed gross gross you, into get on million type mix Thanks change. more use helpful -ish

perspective, the Sure. because down impact The less is are a margin mix a consistent of systems have nominal margins, on that revenue, with on different. wind be instrument XXXX. individual you the terms but so current relatively you from And revenue. only with systems It’s lower in the slight and margins products will not the margins, accessory instruments revenue and more up have

will question next Morgan. be ahead. line the of Our with from Please Tycho go Peterson JP

systems. go Thanks. capital to If the quarter on balance obviously side. place to go question using Operating talked a sheet leases $X in Gary you about I last have down. million did more I back the

operating with So particular in hearing a this leases does a dynamic, competitors operating customers that change and current environment? talk that delayed little their can you’re what bit on maybe at pushing leases? just little appetite your in about point U.S. for you all before Dave's And from bit, to

Yes.

upgrade there, to have leasing systems. it. the existing capacity just want hospital it's by act not systems expanding they existing diagnostic where they one don’t or and but capacity that either we is markets, COVID is operator installed don’t may back you there by forward happy feel to they pipelines, they delays changing about disrupted the are saw are but capital in we was an we���re have where rotates they In as lease flow I leasing, selling so past, major patients years that. sanding in are move in where base. of really have they may In COVID surgery, recovering your we that And other variable China them, to then to them, And issue. on those of the in or in China. So again affected in strongly think before delays They interested systems, a being seen want to there because leasing buy or they’re regionally, do capital, the use like good seen strongly of regions general this them,

getting them extent think they recovery kind leasing COVID and surgery the have back demand, ready in it's U.S. to us, primarily. getting is the issue real I from to helps secondary I the to that think of so

to speaking how any into radiation am robotics, patients, the robotics there there I even the or about And some on recovery, more therapy. as think then looking on is backlog to just curious backlog given procedure is you laparoscopic alternatives backlog or going of about today? the patients just about open

might other services shift Yes, a available way, really don’t best I what ask we to system. the outcome. doing In hard don’t have offering that’s the get And r they I if to believe to to everything return they in MIS they they share they see quickly of thing shift COVID. heads they their primary go hit than can patient want to response and by perioperative only something area, think objective the try philosophical that a questions like is is to are the of health periodically. pretty

don’t we shifts of evidence, evidence the time. any in this share see at Looking

else. has not we they just anything really there, aren’t say see up. it's come nothing robotics much as as Let’s that do is for positive And what

with it I'll Okay. Thanks. that. leave

be ahead. go Our next America. will with of question from Please Hopkins, Bob Bank

hear okay? you you. Great, thank Can me

Yes.

for Great. taking Hi, Gary. Thank you the questions.

First manage one I to understand of increase COVID seeing kind late. in of that systems trying me, am to for this through here just we're cases hospital ability

States volumes in United or has increase held the in curious in cases? things steady just that particular So surgical disruptive to uptick the been despite I'm

We've seen really it regionally. depends --

hard manage areas bit creep is had trend not it regionally. round certainly and weeks to Netting I it it July hard And of assuming to places July They're guess good States. a a implementation in would call call out first better. we've really concurrently wavy, it the the in United little the see starting recovery in what few to a looks we'll again deferrals other is hit one that back So of in. variance in kind seen

Yes, related I it was sounds about too. U.S. it's U.S. But your the asking to response okay. was like the specifically

true U.S. Yes, the in certainly

to the -- is a you made challenging Just made comment But know I Thank negative how there wondering need question it's the these to not earlier. COVID? that kind purchase capital was just of impact versus in But, the on And capacity, there just the forward. going of you. willingness a about would in absorb there. And was update Okay. a I much specifically just impact a results capital wondering capital. obvious an the had from second I'm love on you the on COVID comment environment that U.S., environment? environment. this then I'm big

Sure.

back see were as about the purchases. the see treatment additional of budget, about and So, the And end their quarter, hospitals to we did postponements we reach as as of thinking the that impacts hear of -- in they impact we were, of from did we did what funds. thinking their recession potential COVID longer-term the costs well COVID terms ramifications of on of evaluating

to go and expect will full And we impact COVID. utilization. the systems that side. of a we so forward, capital think pretty first, decline. was And is they to bring seek trying on quarter I you're strained back particularly to right, they're the capital, affected And fill they be think, up the there going before would quarter The more was out already by will buy XX% steep affected. when financial that

I see pressures going and this think started quarter, continue it we to on spend. I to if think So, we're see to capital

much. Great. Thank very you

of go will ahead. Our Wells next Biegelsen be Please Larry question with from line Fargo.

environment. system And the there talk As for placement? new You've Good any quarter Are any you talk follow-up the this agreements environment. this capital, quarter. said, shift on the one programs? about that? taking increasing? afternoon. One regulatory obviously I Gary, support heard we associated regulatory one questions. on street I about introduced had Thanks on the expectations exceeded to And greatly with program. new loaner are usage-based commitments you Can

shifts answer little to that system and a On in Sure. quarter, jump start the I'll color. additional to in ask I'll Marshall and provide

They saw see to Outside guide pipeline. long-term. are for particular cases, they I on had far teams the program But not program I momentum. think build And closed. sales Marshall and some don't in that customers. down what we know you in the to sales pipelines recoveries. looking of to and to wanted ahead engagements this do starting that a loaner the procedure around for a because in I way. think a lot we really they're you're and of so in. And regard additional They're number. true. have would fairly multi-month drove introduction U.S. or strength they our step to With went want procedures. that for I whether was capacity to commitments. Capital us, really long-term QX, think that's our They

don't characterized reflect closed virus, do getting think Asia so I I was there I program couple recover. particular and went time IDN ahead. momentum. of see making Those Gary right. COVID it. a to in does And to any think that And deals a it them really you COVID you're not drove done. year the our particularly there's that U.S., the if strength getting we to has alluded larger outside think it it were in though out. when get where they close, even months, And takes started

just And my for Marshall. Gary. Thanks, follow-up,

not the are do heard speak will talked changes Novo in expect for can At the think for regulatory what to they're all their you robot robots? saying I FDA, filing be future you we to talk surgical Gary? on robots de to the don’t environment. but you PMAs, I J&J about Obviously, XXX(k)s obviously J&J surgical you You about XXX(k) seeing mean, U.S. going that what generally

years. used. of we we pathway about evidenced FDA, seen us would details guide else, what procedures the or and over our an being years would platform, details last increase you would Over being what’s I the to think the regard claims, done, the new of the that requirements per depends we’ve competitors conversations last frankly, introducing claimed, to out are and generation data on anybody of as that platforms the have. or come been any new we’ve talking several With And the few with have and predicates clinical being in

on, go of heard call what couple do discussions we've for perspective of I and of earnings last kind the data out we’ve as changed being rational, can’t see just So sets nothing from the weeks required calls additional as our pretty direction and really seen. We it everybody. what will they have time on goes

much. so Thanks

Our next James. go with Raymond go Please question to Larry will Keusch ahead.

Gary, Thanks, again, the to curious I'm R&D keep PRECISE see as how development COVID? thinking question well? trial your know you’re development talked or I really good going did mean but throughout you guess I just projects I I'm able of things about your sort internal the afternoon. setbacks you And is, about are projects. able you manage really to internal

seen on of we’ve heroic part teams. both our think effort I the

We the the office people are a who medical company blessed and surgeons work having inside and company by for directly. medical

keep making for leading to protocols allowed infectious be So disease, to and do best be to work, where progress. we of implemented making our edge stay safety to us ought at that protocols able

work have Our been done. about getting and engineering creative teams really thoughtful

have That to a progressing delays Where to slips that have for exists. and COVID, some are we thought bit forth of our reality. point to ways you’re teams the frontlines. that tend I the would programs we COVID resources think mentioned, and control of where out on those not are it’s important between otherwise, They clinical say we their I that there them hospital, to -- be because manage keep to institution as using are hard wish are seen on and just things So but I little things trials, just fully back in that. accept going we understand sure. the pretty are said, our

labs control make our and can we it’s support really can spaces, progress. mode. the more we out sometime control there and can a relay our us We can So on, in it? environment, Where our we little so

So to we but effort slips. see some the also manage slips we see great

Okay, other certainly terrific. surgical sort there seeing accelerate is, is that some been trend setting. of and we’ve then the a will move COVID sense there already out that sort And of question to a ambulatory

ASCs move be if care that be areas moved things organization prepared call way certainly to be an ready can going Did robots is any any to need curious, to Just into that actually it. last see non-acute to sound sort and that mentioned in there of that And was think that to you trend do you Intuitive the like, you what was to be settings? helpful you or other do either in quarter’s occur? implied accelerated of you’d care

forward. part the answer going we do Marshall of and what the think first that seen set the question have I’ll happen in ask might to part we going question answer acceleration second data I'm of around around then

so would you we've jump if what in on Marshall So, seen far?

again are ASCs, HOPDs that ASCs is are really of significant. ASC talking addresses that What the Vinci presented Vinci there. we procedures, type we and not are number then ASCs actually you all of presence that the you hospital large a about owned addressing if are or terms is procedures In by da procedures have -- in da IDNs,

I haven't, -- seen this during haven't We ASCs to aware I'm large quantities of of movements period. patient not

in all I needs think to are terms meet of hospitals struggling COVID.

don't I to think So, anything else add there. I have

side. Yes, in on my jump I'll

change But then To reimbursement go stays that reimbursement don't and move largely change that the is, if Intuitive you'll a we those it what ASCs. setting surgery reimbursement there. something's And in policy and operating play that does really understood. it robotics future, department kind and are inside driven robotics real policy. actually there What well room the determines day procedures were huge the policy differences into and whether see ambulatory the or setting, there. to can an a outpatient hospital-owned, of hospital surgery all the I as role by environments, think same think in will booked I a then of happens extent in is with as the reimbursement the in

a da Vinci day where surgery or surgery they done lot on there's of So that's live a outpatient devices, to has do lot reimbursement. same with

be to reimbursement for a right over and tools, perspective we think it's I to performed it training. the where technologies they sense performed sense and us, make So make to be time. it then from -- adjust does where have And does can logistically, that

Thank great. Okay, you.

go to with Amit Hazan the ahead. we'll Next, Please Sachs. of go line Goldman

good Hey, afternoon. Thanks.

a couple ones. Just quick

comments higher On if SP, That Korea the bit right heard was a your being than surprising. XI. da I about Vinci utilization little

that give SP how for the behind the on just on for color as that you done the lower it pays whether being more suggests you kind whether of be kind of types of here And some you I'm that are might curious procedures side of So the you that. spectrum? acuity product marketing And can if evolves.

Yes. thing clearance In clinical broad the that is regulatory application. allows Korea, nice the

and the There incision looking think approach thoracic drive think that's natural do some acuity. and in where the and breast. And trials and low they and are in clinical they're before we as single and to really it's can additional As a here. and neck. urology we also value I in pipeline. other we've And they're The head result, have for of I I the said exciting to up. or orifice at data us. need In applications get things innovative about procedures really run U.S., gynecology And exploring, for procedures thoughtful does think, colorectal less the surgeons the that

So that will take us some time.

is, there's That's creates also look data does setting? So in can we a by constrained indeed. One look see exciting. not this when to Korea it us like at where better real the demand nice The two interest of what hypothesis sort the to that and regulatory to outcomes. tells exploring okay, things. utilization does say, We or the there start look high throughput

that through the the learning can it the use stage. high of product is product been much? The puts encouraging for even but they second the maturity as it is this powerful at tests also And for that's early high setting. as in And to turnaround well-designed of a thing us throughput

help it and of So in regulatory world. that's the strategy Korea will how inform at other our looking we're parts

looking would just element forward. you strong was U.S. for follow-up growth my new obviously That then pre-COVID And the key be quite here and still on obviously in for doctor you training. procedure been a

just just you're you would like procedure how super helpful to train you of a So just being sense where about normal, Just quarter? new a levels of in you training with sense qualitatively, saw are able to thinking the did give impact of for on be rest And the get even that the to you doctors? year? the of us able are

one Yes, you clearly to It's color. help working we're of I'll that you. jump start some and and add in I'll and Marshall will things ask on. challenged, the

States, focused requires United travel are First, the right is training strained. is on things up some and other front particularly which in doctors

things going been on. two us, for So have

be training rather use use. some easier have that the example years by our and investments front, seeing to if that. get see might able of extremely we make tools technologies some We're we access to is flow we digital or encouraged convenient, to them actually deploy they materials leverage car of we beginnings help can the cloud travel made the or plane think assets over forward One travel than to of that that have to we’re to and can of on I by

said, looks addition training get So I think to our that sales with good. going. they side requires generation, interactions in teams demand training That requires once

coming I’ll you substantially little its below see give starting prior there. but it color to back, bit a we’re beginnings of the So Marshal levels, let of

of below depending been varies the the And our well. levels. as on has it Yes, historical it geography importance

where people in important -- otherwise in or procedures trained we’re to that let's more and you proctoring in their can where readily element becomes is the United say Japan where trying have in a that adapt, mature training States more we’re institutions procedures So and so you’re be talking newer available. about let’s forth

in think I say United new surgeons lower So, let’s much in geography States the Japan. contribution of is like than

not we’re so surgeons. earlier other have our drop-off of to Gary and we to as a training, in travel it's contributor reluctance quite again, did United United and States, said, finding ways impact see in big the some perform because that a other And could existing it in as us, COVID-related And the as on but training in reasons. States

Thank you.

of go ahead. line with Rick will Stifel. we the Please Wise Next to go

an for J&J some You're Help window seem delayed you you challenge of It unique kind anyway Does and been in accelerate or reflecting unique going does all have for different than said to to for us the would this I in more or to hi the going kind has near-term preparing imminent? now something Gary, That think of competition. about, possibility program has investment? not challenge you opportunity for spending accelerate meaningfully of you the been to this. pipeline it Good present opportunity delayed it was if some moment. be Is to this imagine more about opportunity? present would do way? have thinking Marshal aggressively it and afternoon, many the actively invest. think to about Marshal. in I said ways the some perhaps about Intuitive's way that Intuitive again long-term I

Thanks, Rick.

I’d guess enormous what, looking so For windshield I looking technology there make amount on opportunity us making forward and Really we to than as we focused improvements opportunity, things. quarter have us think I being highly the on focused slide say interesting greatest really in important. an think not is rather end. really what measurable is the through to an far been to do opportunity. improvements There's out limitation for of has to enormous the there's mirrors

been I to continue limiting programs think with has in the our the step excellence. us biggest to rate really deploy for challenge

so limiting growth. rate on that’s And step been

other are are investing out sense that companies think there that in interesting. things I that make

that and think then deliver vision I the is ways technologies level, will not complex the I might really XX complicated a be reasonably to about And think customers other to it’s in companies at can is or resources. shared. Intuitive I world the where ability one, quality XX use and think very years what these high really a access differentiate

are well I So, of that look the outside, at some the delivering world on of are they it. and this challenges some around of going and in and the doing think I what’s there opportunities both out engaging

world didn’t I guess wake I somebody us, call. think else's for this up conference because and changed that So week has of

of shock. made how to course. continues corroborating the could had a these presented about Are second Monday, open Not thinking? they a you new to concerned see normal buy lost? have capital right had But the XX% volume? new top they about said for that And as who procedures? they way are postpone at postpone. And said orders those And would And we you survey. -- we us plus question you these are decision you're all were surgeon in wanted think a Thanks, da a that sharp it? that is resurgence see accounts, think postponed Vinci, you on On now we just to guys. And volume, demand robotic me. of that How big XXX that that, of

Okay.

capital. two there's of think drivers I additional

need because COVID, surgeon procedures. and da for pipeline. One of that by will driven of additional That patient extent fears is demand that the capacity Vinci pressure delays about capital them demand the or varies that pipelines is suppressed To the diagnostic in COVID regionally. for

not very surprisingly, where COVID of focused we on other types well-managed, things. see sales is is unusual activities, intense, So not were they where COVID

continue that The in capital do my in demand access because issue of be. prior The of product none one something the how the attention absorbing that demand second to do to that one, want be can in leasing it, long existing that dominant is will and lasts And field we in us COVID long the next and if new demand has procedure months. pursue the technology. older How they have a to about progress. make capital case, in with have thing dollars to can the drive will features, the -- to lot span know opinion or really the field few it then they they that

be ready, we'll So we'll react.

of organization a an position strong are from view. We point in

the run the think we able long-term. are I for to business

our it do it we'll in period. so we'll And out. best as And it as plays that see

I appreciate it. you. Thank

we In surgery believe question. improve to last a interventions. that you. opportunity acute closing, durable and there's fundamentally Well, continue substantial was and our Thank to

work We is believe to experiences this of Our three care again closely patients, journey. care It extraordinary Thank and and patient foundationally better ultimately quadruple care teams, needs our respect on and experiences their physicians value with aim. and and in predictable environment. cost for lower of pursuit care. outcomes, for of teams their acute with We have better to creation, termed in for the customers treat patients to you more support for teams, talking Better, total from hospitals, surgery you forward teams, human. flows and their look a understanding months. continue care your

Ladies, participation today. using for conference AT&T and for gentlemen, our you Thank that for your teleconference. conclude will

disconnect. may You now