Intuitive Surgical (ISRG) 20 Oct 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Intuitive Q3 2021 Earnings Release Conference Call. At this time, all participants are in listen-only mode. Later, we will have a question-and-answer session and instructions for queuing up will be provided for you at that time. [Operator Instructions] And as a reminder, this conference call is being recorded. to President call of like host, to now Vice Senior Finance, would turn over the your I Jamie Samath. sir. ahead, go Please

Good have Intuitive’s With to and Brian Marshall afternoon earnings Treasurer. CFO, and call. our conference Mohr, third our me Guthart, Gary quarter we King, our CEO, today welcome

next would his to has you Investor last and of years, know for we well next Relations Philip Kim, Before in the appreciate like endeavor. begin, that onto opportunity. pursue wish him his moved I contributions of let We our Head his couple

Brian Joining the us on King, will to the who years. Head seven role been call be for today of Treasurer the his Relations. responsibilities is include our Brian expanding has last of Investor

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

through host quarter's found will release be on today, a available events Investor will and turn to you an results format financial SEC’s to website I that, section Today's posted and operational replay our Marshall page. question-and-answer the our place our of be that our provide call in conference provide by such been will note can will this results, on update discuss website clinical data question session. will session. press highlights, latest consist and present providing it under Gary financial outlook, announced are undue of supplementary forward-looking our finally, for to third of filings our a as cautioned review SEC on our described I will With highlights financial answer release we have or at tables the of and a at the intuitive.com with Today's business earlier reliance Relations will our followed procedure, and Investors Our website. not quarter over statements. Please press audio highlights, and Gary. website.

for you today. us Thank joining

Our in team demand. performed of third rise our in has and pandemic-related in remained necessitating and internal the to challenges, stresses these Global yet growth The use disruption redirection chain quarter well Despite our to in of the products resources surgery. Delta of variant in pressured customers capital hospitals face the the abate, to some continued robust. demand headwinds. demand continue for meet supply quarter the of the

new clinical platforms advanced commercialization, in in their Our their programs. and in innovation, their

in burden run increased expectations second of Delta in couple sequential tempered procedures, slight Korea, of pandemic procedures function rate growth China, COVID quarter, and to our first the recovery multiple our adoption. -related below variant we last The procedure needs the the France weeks impact month varied by particularly on the healthy, of continued hysterectomy, of the particularly that the driven procedure our Turning growth year-over-year general in the were the as advanced use benign resection. colon despite surgery reasonable saw and repair. United bariatric having procedure reflecting result disruption. start in are lobectomy, cholecystectomy, remains da our QX, customers’ specialties the impact. hernia States, of and quarter States use in are surgery, the of and benign trends our and are quarter beyond procedures stabilizing and at the Japan United growths In emerged to the procedures, prostatectomy, Germany, targeted In had with business trend and procedure increased to few including drove Vinci of in UK rising procedures continues malignant and Adoption the have urology. solid, economic Two surgery the over years strong span QX Both solutions customers and regional September. of including with A past of success States, product procedure delivering categories the COVID performance focusing procedures. diversifying a United match. and the remains in August. in Outside instrumentation

as thoughtfully new incremental trade-ins had has placements Vinci, Regarding outstanding in their robust. of continued Brazil to The existing performance new technology. showed they United been integrated as of to delivery placements capital China, an and as Vinci of Japan, the Europe expand hospitals placements quarter, manage system environment, had for networks, U.S. with capacity driven healthy solid balanced in This our older placements be by da and mix fleets. and the with the Elsewhere, collaboration States quarter and well da capital a customers, strength.

newer our to platforms. Turning

Our solid of the system single-port quarter customer Placements to Ion nicely experiences field. in we flexible platform pursue sequentially indications. SP additional QX, Vinci a as grew QX by powered in da bronchoscopy strong had our continued

reaches strong system the a to moved of revenue of the strength program benign our and end Delta procedure the finances were and path. though of instrument unusual mix this again field. per Procedures expectations they extended-use procedures continued drove down variant. up Our System result and at more revenue. favorable as equilibrium an procedure sales make in as modestly our accessory strong system quarter Instrument mix the low followed grew

digital new capabilities invest builds our in sequentially spending go-to-market our platforms continue as grew Our and globally. we year-over-year well as and programs, as to expanding

time some than market, modestly open labor by to the lower fill a in planned, pandemic, tight growth was some positions again travel-related given expense under-spending increase driven spending prototypes. Our lower in in and

and to programs in Company. invest the We fulfill that mission will continue the build

better care innovation like would cost per a customer’s to team experiences, episode. Turning patient status efforts, pursuit overview experiences, technology-enabled total the our deployed of treat solutions patient moment with support programs. and outcomes, to and take better lower to [Indiscernible]: I developed better to our clinical the we to our

lifetime X.X performed now thoracic from XX,XXX Vinci use over allowing there million systems. surgeons to urology usages For broad specialties clinical general now Tens routinely gynecology, surgery. surgery, trends across use da have XI over thousands are clinical Da procedures our and clinical multiple XX publications. of X surgery, representative oral Vinci over with system, and multi-port peer-reviewed our of

products, and with and pursue invest continue ongoing. Many new studies capabilities to in further our learning work We expand multi-port us to instruments, several continue indications. surgeons to prospective with our services to

and Ion clinical continues CHEST clinically updating this progress momentum system, Ion, build several the weekend. XXXX and at Our flexible bronchoscopy to presentations conference commercially, with manuscripts

As outstanding described for to trial definitive capability press diagnosis results body regions. release, in clinical yesterday's harder reach early point of to allowing

building at our capabilities hard and manufacturing are meet demand. teams to supply rising Our work

and Our for single-port ongoing Korea SP SP several in currently including trial prospective has United system our clinical There publications. database a studies indications. for IDE are States, XX of peer-reviewed the clinical colorectal

approval portal quarter, of will and our adoption additional unit This SP IDE. be program. remain for regional by FDA Broad we the clinical paced thoracic our which SP received focus clearances,

hospital surgeons, insights operative provide solutions administration. and data-driven digital to services Our

our efficiency virtual these employed insights, are custom programs. customers routinely tools training to For improve analysis, to reality and comparative by outcomes teams our to now

the customers of thousands in supported program analytics quarter. Our

the through algorithmic academic our and our centers, learning, [Indiscernible] collaborations machine surgery of at informing edge for teams to with discovery. scientific -based are science leading Turning leading clinical

our to allow the on our these together, quarter customers Taken impact [Indiscernible]. programs quantify collective quadrupling

successful, new integrated offerings, and will Financial clearly succeed the advance Growth to scale and Business time turning few in structured care. Vice January growth result of our and Vice Marshall the the by of as realize overseeing report Officer, to President and Officer years, Executive President as leading on we outstanding a and Services, announced responsibilities senior position regional 's the Global and long-term These Rosa, we global Dave role Commercial continued General of sales, Vice take Manager of and commercial commercial an Jamie to global minimum build changes will are infrastructure, we and need Starting each our to important to XXXX, Executive changes support past data opportunity to Xst, opportunities, Officer. Executive product Europe, creating of currently and as Before ensuring our will Mohr meet Intuitive leader an the me. over over identify business and process Samath, succeed U.S. executive operations today information our some President Dave programs. Charlton, in will marketing, in they Marshall, of Chief team. our driven and efforts value enterprise Officer, lines, invasive Chief reach, important are technology, capabilities our and value will our Strategy in business global are Chief facilities. new the Marshall on our to minimally-invasive as the bidding continuing understand proven Business take our and growth ecosystem commercial They process, product Also, customers Henry enablement. systems, Chief

to them turn spearhead you Marshall, now continue in to to as marketplace. the take our our mission achieve growing through position highlights of choice greater detail. over our financial in our customers efforts first to expect and Intuitive who I'll We a call will

reflects our to September, and COVID pronounced in XXXX and procedures had stock X-for-X the year-over-year forma also resurgence within reflecting Reconciliation of southeast. comparisons quarter, began the split pro to that or procedures earlier Delta The GAAP of our year-over-year earnings want COVID basis. pro on quarter began my Later in Good prepared the third impact in October. our the later result impact hospital forma in the and in resources cases remarks. the is on our afternoon. regionally, early grew was recover. website. reflect posted GAAP in Overall, our resurgence. regionally and on making prepared describe XX% the procedures COVID impact will as the of August non-GAAP and impacted performance, grew resurgence a south complicated. to remarks our quarter most and procedures, highlights I information release I slow, summarize completed between the also third In variant XX%, U.S., performance

future to COVID and impact and In Italy to procedures. impact in a difficult COVID resurgence estimate is da OUS and Year-over-year, in extent this or grew UK France, with had it impact greater less However, of procedures the Europe, will Vinci Germany. the regionally. resurgences XX% which varying

procedures able year. overall COVID our primarily to continued China system the hospitals be markets, the growth COVID past to higher pandemic, in While growth of in to third increased manage other the beginning reflecting hotspots better hospitalization. the over are some there within quarter than to many the well. be far patient installation Relative performed region Asia-Pacific regions, continued of

metrics hospital procedures, going for Vinci the commentary shortages da were will procedures, business later are chain staffing additional this hospital including issues capacities and quarter forward. challenging However, and follows. procedure third some supply call. impact Jamie as deferrable in could Key provide

quarter was quarters between decreased XXXX XXXX compared increased third to procedures XX% XXXX with the the last quarter quarter. XX.X%. of annual and approximately XXXX second Third and compared X% approximately growth Compound

Third with decreased Compounded third compares XX% year, systems last growth and of with quarter. last X% rate quarter systems with system was quarter. the increased between rate placements of of quarter. with approximately We and compared Vinci increased the year per XX% by our clinical base last XXX XXXX in quarters systems over third last systems compared X% and for procedures X%. to the utilization increased systems by with quarter X% year XXXX expanded installed field the Utilization and approximately compared system, X% growth compared of measured X,XXX da This annual of last XXX XXXX, XXX last XX% systems.

in Moving of in access driven by were our quarter purchases the to standardized IDN multi-system fourth-generation and to reflected procedure trend upgrading continued order capabilities. system growth hospitals and placements capital on placements, and a

capital impact following also our it cycle forward, see of capital capital The a procedures, extent we drives to many growth the COVID system dynamics. Looking trading purchases. that placements. markets, purchases has Procedure been impacts in the revenue to tailwind will

arrangements over of our Leasing older access the However, enabled of declines, and to alternative product as generation financing trade-ins installed time. decline systems. customer base the will number

and future will as into increase time, quarter-to-quarter, spending, result Macroeconomic and price fluctuate in we over which capital of pressure. sales as the created leasing progresses under of by otherwise we periods. of conditions COVID selling current various markets, cycles regionally revenue will will the could systems percentage believe experience deferral competition longer placed likely impact leases hospital a While in percentage operating

Additional follows. statistics are and revenue as trends

procedures and from and the increase increase the year-over-year last Third X.X decrease a both XX%. revenue in a percentage revenue a and with quarter compound quarter. and quarter. was relative mix. revenue increased billion, The X% The of fluctuate XX% XX% of lower and system Leasing leasing last quarter XXXX decrease XXXX reflected geographic to XX% represent Leasing growth XX% representing a annual will third procedures current accessory growth of continue sales and last to revenue placements. and of and last associated quarter compared rate of placements. year quarters as was XXXX second instrument from year total placements with between with has lower as The percentage customer reflects

we alternative financing run consistent last higher than leasing last However, seek which historical XX% the systems rates. and arrangements quarter the or reflected will more trade-ins, XX% year third customers in anticipate of XX% is involve than placed with the in quarter.

systems. installed of XXX where of is XX to capabilities, were the As installed third in leaving base U.S. the an upgrade trade-ins to fourth-generation in of population SIs particularly continue customers approximately completed SI decreasing, quarter,

activity lower to fluctuate a result, expect we time. transactions be and over difficult As Trading can trade-out predict.

extended-use recognized fourth in selling Lease million million of the fluctuate quarter, will reflect significantly compared prices. for offset decreased the $X,XXX by procedure our from patterns, with per accessory slightly XX million the compared increased will procedure in quarter Ten decreased systems of selling buyout X.XX lower systems $X,XXX in instrument reflects SP instrument instruments. adjust last the quarter XXXX third from second of varied both year-over-year mix expect revenue Average revenue of of and distributors were to usage the lease with decrease million compared uses higher has per quarter average to Instrument quarter. Systems. last included X.XX historical the the to second third a extended-use reflects change buying quarter million do of third customers carry XX and advanced for we of of to increased mix. patterns and and and to continuing XX sold the to additional usage $X,XXX instruments. which per year prices their quarter quarter product instruments, revenue The prices quarter-to-quarter, likely the with placed continue with so. quarter. XXXX. The in in previous third the Third quarter buyout last Consistent procedure year, mostly per We increased geographic and

Our U.S. SP is installed XX XX, in in the now base XX of Systems Korea, and

the data procedure as the additional our on continue in from gathering XX installed Ion measured the Vinci we base completed U.S. There Ion counts. systems. roll Ion to SP X,XXX and placed We XX were out procedure We quarter, bringing systems procedures work are system placements gain of system clinical to approximately in overall clearances da the excluded quarter. and procedures in our third

XXX quarter third U.S. quarter. the Our and rollout the well. in Outside placed [Indiscernible] XXXX of quarter Progressing we with compared of systems in the third XXX systems XX Current last quarter with Europe, the China, XXXX. third of XX into and compared in and quarter XX system XX into into into XX placements included XX into Europe, into Japan, XX China Japan,

in systems in the Brazil and four XX quarters. in the third systems X placed over now have also quarter placed We past Brazil

Moving to for with operating quarter Pro and expenses. margin margin, quarter. XX.X% the XXXX and for quarter XX.X% of third of on XXXX the gross gross last compared third was XX.X% forma

inventory primarily The third decline with quarter materials our levels, quarter-to-quarter, of relative gross and and period COVID with reflects excess impacted cause issued associated customer the and products. global mix. has XX to of lower product semiconductors customer in mix quarter obsolete and used XXXX included margin can service charges. fluctuations which in second in fluctuate higher million other higher our margins. Product gross supplier of in relief costs production credits program, conjunction The

ensure supply demand, we've customer are to teams necessary and date increases, of fees. fulfillment effort time with to to secure increase, significant expending our immaterial future supply been freight component experienced bridge we've and to expedition demand. date While cost able To

However, supply well global delayed as shortages result activities. in regulatory disruptions future could and as development

associated higher operating production last prior third increased Pro with compensation, X% compared expenses of quarter. compared We costs. and in spending by also higher variable result XXXX, reflects impacted headcount, COVID. in to areas the supply forma and XX% costs compared increase, The with increased expect increased year, quarter increased to issues with the

delays and was marketing COVID, hiring travel Third clinical our below headcount and including activities to lower spending costs. in restricted spending quarter by development, expectations events, on due

under R&D on In resulting addition, COVID delayed prototypes. in some spend work

We expect spending increase on as of activities decline. restricted pandemic COVID the by to the impacts

and growth catch-up We the s also expect to as other to of increase support spending in headcount as infrastructure the investments percentage of business. area a revenue

this of in Finally, expect continue will guidance accelerating Jamie we provide and ecosystem to capabilities. in and later call. invest to expanding our spend products

approximately rate by recorded provided XX stock-based tax the million associated to XXXX pro prior associated effective forma IRS recently Our was guidance of for with compensation. with We expense to periods quarter third XX%. the related

tax our We rate to for be forma XX.X%. quarter approximately pro the expect fourth

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

with third XXX Our $X.XX or for per net million, per or million $X.XX share XXX share, the forma XXX and compared or for XXXX, income of was quarter share, $X.XX last per the third million, pro quarter. quarter

share and compared billion And quarter our with that shares with last quarter per the not $X.XX income GAAP XX with GAAP $X.XX The the approximately it and XXXX pre in into Jamie. of and agreements per million XXX Third third million to was summarize gains GAAP of for income last income third will increase the share to in results. the GAAP like cash quarter. XXX X.X entered with net and now exercises. compared X for stock XXXX in or net XXX turn reflected or of ended and XXXX quarter repurchase We I prior quarter XXXX resulted for of that, X.X from million quarter. of or per -tax net in investments share of years. We cash quarter million the primarily quarter. third $X.XX the companies associated I'd development with investments did included in from operations cash over any billion million

you, Thank Marshall.

and relatively in the particularly in in adversely was hospitalizations procedure related U.S. QX approximately the Procedures rates. growth growth markets. X% quarter an growth in quarter states third those all XX% overall vaccination were growth XXXX. reflected with U.S. Our growth procedure COVID increase of variant. to compared procedures, third impacted In impacted XX% due to in QX procedures of the Delta by U.S. were during XX% lower

hospitalizations the more we saw in low As year-over-year began growth number grew relative QX strong recover. growth strength procedures of to COVID-related and September, the reflected relative mature categories, procedure averages to prostatectomy the range. single-digits in peaked to benign hysterectomy hernia In repair. historical and in start improve procedures, in cholecystectomy, bariatric and U.S. was

Third OUS the compared grew with procedure third quarter quarter of volume growth approximately X% XXXX. for XX%

three head impact OUS impact Korea and of and markets half efforts training procedure were neck quarter based kidney relative of capacity more growth the impacted little and procedures new localized expansion result the XXXX addition and gynecology, surgery. driven impacted in mitigation broad-based Growth base Italy as are reduced as vary to outside growth current in urology. Delta urology, by than key by of China solid, solid, prevent procedures, COVID. UK prostatectomy the hospitals the -related surgery, the growth stage of France increases in potential ongoing gynecology, surgeons and of a by primarily under resources in Vinci Third Japan procedure from the and in with was and but strong A in measures. remain stemming of growth the of on quarter the resurgences reserved In for solid, general continued driven was Germany also installed in da to COVID these COVID procedure the Europe, procedures Growth lockdowns cancer in was for of thoracic earlier patients. Asian and country and Growth surgery variant growths procedures. by platform. was of and by

extended-use are in inventory that in XX reduce QX benefiting procedure QX, effectively Europe procedures. following from U.S., even instruments consumed an procedures approximately U.S. XX% customers cholecystectomy In With of During regions acuity as for in benefiting in remaining adoption from lower INA life this such the larger customers instruments year. in Europe, the reduction those and target NIA repair. of by the their are hernia launch in customers costs full of and costs per last

in believe almost Ion and of based While recent trends procedures of procedures. on adoption the that systems as of new driven XXXX, In usage various to number X folds targeted waves having increased of our customers impact a on significant by are of customer feedback of in QX expansion instruments procedure existing we platform, confounded is extended-use increase the installed the an compared by the positive the base. pandemic,

XX% Our showed single-port by and which performance clinical regional is additional solid growth. platform, clearances, procedure year-over-year almost gauged with

Now, studies to highlight turning deemed published our the notable. recently business, each quarter clinical certain be side we calls, these to that on of we

body of over However, scientific review been the more complete to thoroughly that of of published understanding the we details gain extensive encourage have stakeholders all the to evidence, years. studies a

or being operative complications da Beth an cases X.X% part, hospital -operative School and PORTaL associated to approaches also with propensity procedure. each with approach. data comparison each During approach improved compared patients Vinci day Robotic Post analysis, lower approximately authors this Lobectomy lobectomies. Medical minimally Dr. Kent for with The in Vinci score conversion open multi-center open in propensity of the group, approximately Vinci lobectomies compared study stay was Michael peri a the Pulmonary over Thoracoscopic " length Harvard invasive were X% VATS Center, rate and concluded score approximately additional in two-day published a the "In a Israel cohort patients outcomes length in and in with lobectomy. a Robotic-assisted of and from results the both in robotic XXX associated Massachusetts, regards VATS, da time mean prolonged of robotic-assisted quarter, had Boston, multi-institutional X.X% with stay, of retrospective were a [Indiscernible] da rate Deaconess and associated Open, landmark shorter from stage differences to with of lobectomy lobectomy retrospective assisted With Vinci of X-to-X and outcomes X.X conversion surgery with with differences this match stay associated X-minute reduced of tumor compared stay, to This over XXX robotic lower Readmission shortened showed cases sponsored da da robotic robotic comparison complications. thoracotomy length office concomitant a rate. of Vinci Results were without comparable shorter full group, - such evidenced for study The a to of just to surgery. who underwent matching, complications, da the risk y as groups. each compared in stay, year, with low included shorter and found underwent of "Based the X,XXX the analysis. when annals open, even In outcomes by of of approach assisted surgery, of The systemic the abdominis both with for risk and on between X for review combined transversus a advantages post-operative procedures short-term yield outcomes XX as release that - more the post-operative whom precise a length developing present and the studies, from and difficult malignancy of from reoperations significant invasive of with XX% This meta-analysis noted of XX% metro the press the Ion These showed pulmonary nodules point this of outcomes mean study biopsy yesterday's system the for to macroanalysis millimeters. of the Ion Annual regarding data The over in evaluating the subjects and six lower robotic-assisted the of XXXX. forward XX CHEST study published ventral release, XXX that concluded the of approach. analysis, patients, of macroanalysis outcomes assisted short-term preliminary we approach Lastly, XXX encouraging of low full TAR was diagnostic endoluminal day the peripheral repair, of the will of with seem with feasible, (TAR) early of shows initial to with Robotic analysis turn just to associated the our in in under associated systematic with in preliminary second open the results common cases. are system a improve XX% will rates lobectomy Vinci II size financial XX% hernia the Conference. over for TAR and Professor After Italy XX% I " part, performance Naples patients analysis. now open period. from VATS, patients benefits assessing Umberto and the Federico of in look X,XXX of Intuitive this robotic-assisted in in minimally containing a Naples, da half conversion sensitivity University XXXX. a Bracale August approaches. Vinci into outlook safe report published VATS,

chain challenging we suppliers. delivery performance the QX, more our on-time environment deterioration During a experienced in supply for from

We chain increased also supply costs. saw

related in to are operating to with While impact forecast XX%. last to results supply material this costs XXXX we providing a quarter we did significant XX% or QX, potential of reflect does growth Starting our not not procedures, any constraints. additional outlook have disruption the procedure

Delta in Given [Indiscernible] QX and not and a the continued COVID does or in growth of we the COVID-XX began related that U.S. the results of continued OUS XX% assumes -related September, in shortages COVID-XX. reflect markets range XXXX recovery resurgence The full a hospitalizations from the to expect our measures stopping the outlook impact procedure variant, the mitigation are cost procedure high-end of to and significant a This XX%. the narrowing impact of full-year now ease.

we call, profit, forma be XXXX forma within pro challenges. with revenue. margin to to last XX.X% revenue. does forecast not supply be and of This profit gross XX.X% pro of margin We gross our significant the year to current XXXX XX.X% reflect profit associated on chain now expect Turning our range and within gross any XX% full disruption

reductions respect cost forecast and on manufacturing actual our XX% levels. competitive pro grow depending pricing quarter-to-quarter, full-year above XXXX will With in vary the pressure. between Our mix, call, margin on expenses product, profit operating largely operating expenses, product to regional, of last and XXXX to we XX% trade-in and gross efficiencies, forma impact

our We pro and growth refining be estimate to expense are and XX%. between a now expect forma full-year XX% operating

stock We and forma XXXX. range XX, XXX mostly expect expense in XXX a to million XXXX. XX With income, expect comprised non-cash million range regard we which income between interest other pro our to of of is between in compensation

QX - to XXXX respect with pro tax of our approximately our expect tax XX.X% pre we income. income That remarks. Finally, prepared tax, be to concludes forma rate

will to We questions. the now call open your

Ladies if to ask like Sachs. go Amit a question We'll and first [Operator Instructions]. to with Goldman Hassan you'd gentlemen,

Your open. Please go is line ahead.

good comment Thanks and chain back afternoon. to supply Hello. come the first. to I want

you order, lack it componentry a bit for ask what how this what more term, times how earlier and little or remain of this extent that able of to you? for maybe viable look have year, and around I color option visibility a little like that lead sounds for year, just does double either you stockpile looks an now, already been now versus to better Just tighter, a guess,

Yes.

will we fees also until everybody real is it we has us sure costs, as not, were But make going out some with not with From more cost is those quarter. expediting there probably it issue incurred And Again, that as associated I right think substantial we've an costs or it to deteriorated it difficult last a that with and dealing think forward, It's it's material. QX. the how increased perspective to-date, risk, hit of resources not difficult The and of dedicated predict relates demand. environment, time. in much that aware we risk freight. -- QX and It's And And the call supply environment They -- got But exactly said, hard until I Amit, do costs, has that. to to customer significant. we to chain, increased summarizes Marshall. it's we material you. talked created shortages. over a for expect margin now. some supplying

I manufacturing our think just chain great. -- I are doing supply teams and

when up that macro-environment, it in clears up. a and working I clear think will they're tough macro-environment

question Go to next Our Biegelstein ahead, go please. Larry Wells we with Fargo.

for questions. Thanks afternoon. the taking Good

and two me: Ion, one Gary, for on Just then one on procedures.

how technology good. a look competitor, a do pneumothorax the Ion? main your do and to think lead And data you And catalyst data your better technology? have early the just will versus data rates the from is much different one follow-up. I uses guess precise you the lower yesterday sensing question of So suggests Yesterday, shape which can yields be for think I

Yeah.

and shape And it deep as choices the think the [Indiscernible] into the design for about that's I strong soft itself. the quite go data that think making catheter a really I architecture a whole, been us. speaks can the works, sensor, way the for

Monarch, we for focuses can for great feel the about that compare and that You and we yourself data where are.

think catalyzing. is I it

market. are those us think speak, helping I we As results in that the

Our program feedback. customers the are good giving us that feel side. of well And to good we part as about. in continue as really invest operations really innovation We

sounds in similar expect particularly it the a like U.S. and the major on U.S. markets on When normal look XXXX it and be a possible sequential seasonality new And taking sounds that OUS, seeing color, it procedure role, little procedures, moving is at all we the could growth on was then we most are little more love given like hear stronger in Thanks for if like that a question. it direction. Gary. should it not we're recovery? and Jamie, the guess worldwide the sounds XXXX, QX. very right Thanks by congratulations or I to I'd bit way the for that, and

way. I the are U.S. related hospitalizations COVID-XX September, continued recovery Thank in the you, say and September the that part Those really recovery the was reflected are of in that our two this, in that procedure that commenced. began what high-end the would things. guidance in by middle Larry, of

in September. the in terms low in on-off from various OUS a those continues markets. also progression markets, also we QX continued measures we that started there's in measures in there we U.S., typically QX. of the in little and So and the slower than that of mitigation choppiness the end, which to the are At what recovery ease assumes a what see in conservative OUS ease, more to a mitigation It is saw through see U.S.

at to a XX% That what rate the we from range that was a function which we of so the And that. of that Delta QX little it's provided, variant. color with really in recover XX% on just occurred

Thanks Yeah. so much. Go ahead.

in. jumping Just

that are to I consumption back capital ability resources, resourced what is their pivot the us will pace going and it's it. and is, surgery for human hospital towards are things to at think surgery. their both two [Indiscernible] One on. infection there going facilities, hospital availability It's not be rate,

some it. There is system but just managed As variance, how it it hospital that, double-click each is you variance. in some of has on differences hospital of are actually regional

So it's of I think, hard to averages. beware generalize,

it. for Got the Thanks taking questions.

Hopkins Bank Bob America. comes question please. Go Next ahead, from of with

Thank you good afternoon. and

question. up last follow to on Just that

Jamie QX or same? growth assuming about forecasting volumes QX, I guess, versus therefore, procedure QX, for the the or for year-over-year improving growth that in is do in you Marshall, are that the So year-over-year

low-end Yes. At will provided by implied we The at QX guidance what's be high think will of be the it growth end, -- I the XX%. the XX%. that year-over-year

you to of just of the QX and the again, the comparison So in in terms what terms procedures above think the in with I in is compare actually scenarios that well of QX in showed you it we see range And QX. of and base in both reflects 'XX, XXXX for QX. range year-over-year we occurs as what as below recorded what

XX how remarks little an clinical uses. that clinical that one now or multi-port I different for that. by bit. usage? are And for your Gary, procedures you struck your about that Is I just XX interesting quick -- one curious, was characterizing just your you I in on number. systems your comments found then surgical elaborate how Thank opening a you And Okay. have was

procedures right. the in that's or that's might body It's sub-specialties. described the of different used labeling where in this number to Yeah, in our be as

that you which through, walk if we've And handful a a it put the in likewise just that's labeling. used set different our be surgery. in as gynecology agency there's general and you look procedures of can and urology, for engaged for So of procedures

broadly So applied. they are quite

Okay. My have has guess do. I some to so only you. I XX, Thank model work

not done. And You got we're XX.

surgeons the explore ours go. like regulatory can where technologies else and world and to around agencies think we I continue

Thank you.

JPMorgan. question Next from comes go ahead. Tycho Please with Peterson

elaborate Good how staffing customers little think I fully across just a afternoon. I comments. much maybe of more know labor isn't this on did? something tight you're shortage wanted do seeing widespread most baked or there's characterize you it? it presents? the this -- you very Obviously, market, bit into would your I How can think you but guidance, but risk how

On the to customer -- the you're side? referring

Correct.

Yeah. Jamie a wanted little talk to it. bit about

to have anecdotal had inputs from We've that able risks. those that customers they're they're Other said Yeah. shortages. overcome some facing us staffing to customers

And does terms lack in significant so on of in meaning staffing hospitals. the remainder any we've dynamics for not mix impact phenomena from its what the the given is there's said the and year of shortages, disruption deterioration the of reflect evidence procedures, no last clear the that guidance

what sales curious, Medtronic, the flagged just just out in cycle. potential Mark for And demos the things CE front, then on like days terms of reps that. -- interest, early on Obviously, just another dynamic you're but your of you I'm was selling from competitive your early back of the hearing the

Yeah.

and and most Those the other a are clinical so think centers of tend several recent I you to first trial the on. market, one, and on engagements see engagement. placement of training say, systems with that early the be as we sites

into their So early market are up. they the access They're surprising. to not programs get

do these time will far number So the I reality genuine are claims think is there will systems. the of tell what new systems far and about a

I generated to be think claims. those evidenced has backup to

yet And so evidence. like far, that don't looks anything we see

we'll we'll Just that other the companies how to they do. sure achieve said what keep can And our so customer, see doing serving can claims, make we the quadrupling.

system get we question picked feels a one, we the that last guys. new It for little lately. about bit like Maybe always you you have[Indiscernible] up

up system needs view, you you wanted for putting in if now? market right may your that guys or all, is the from about You're another to working numbers. I'm anything at you say, system anything on? good appetite be the What curious something do

the we think thing room innovation have. First is there platforms that all for is we on

lot its And a We've it. to continue on which and those in in body, and success whether think innovate. invest and different innovation which we describe in we So on body X, to is clearances to we're sequential and XI and SP, Ion, market X, are we products first the you'll roll continue to we done sequential it's deeper having but to opportunities [Indiscernible] SP. innovate on ready proceed bigger in opportunities deeper, time. out, And our multi-port. of about and multi-port brought and in incremental so Gen locations for indication likewise SP, different Gen both as continue We the X get opportunities has globally early will over great hear

I expect yeah, should innovation you So think us. continued from

do that the on. to and we customer innovating we an something can we're at that so immediate think what's not bring where we think strategy, whether quadrupling, to we As we're improves our idea what more of otherwise but the focused experience, we need things are of in retail pace much matter can that something, quadrupling a that's or changes

you. Thank Okay.

with please. Next Stifel. ahead, question Wise Go comes from Rick

implying all growth see successful. round when question that has happened Good adoption we impact. you How were mentioned to picture of should forward and if you afternoon, to phase that? your think and of -- focused of instruments? This I opening instruments, make have I urban been thinks I is we're sure the life in extended was suggest you understood that initial then reached when everybody. comments, the One there Gary ASP all And so understood, just I about has going a sort initial a that stocking X, equilibrium. better what larger want second

meant it Jamie let is that the to newer largely was regard instruments more really with answer transition from what to I'll older and did. carefully I that just but than stocking place, the equilibrium, Well, by initial taking I orders

we There's gain to XX in to think time period U.S. ordering a took when Actually, instruments were than time they Gary. and particular some that life as Europe instruments, right, array as customers their the that's of launched parity. those usage instruments higher extended-use consume in the I

positive extended-use of the some end those QX procedure in benefit Ion launch We QX rest to QX. that in countries. later world per instruments and and for saw Asia the largely you so of of came parity. in to And regions the did

their to working way parity. are they so And still

small be NIA looking parity per downward procedure will they there pressure everything get on to equal forward. else So as holding

you. Thank

of were your think can The high-value you it, done look and design improve that question, more if we that second and different we price customers, of made that what it. of extended-use to done in to not is that we just exhausted. done, exactly we're the reasoning has may The price do of our are lower that systems and things different Allow about products that there we instruments doing half that. they them or It like our cycle. in points, talked points, past, Vinci[Indiscernible], for finish not value can pursue idea and line can And for we kinds and is procedures. different these these think we've use what are with instruments at other at so the not cost process ideas investments quality da we virtuous it

be leadership expecting? need question. created Intuitive would simply and complex new if what senior focused here, in picture the more Rosa. enough just to Dave just in senior Thank and flush you've and for years? are leadership has Dave What should Marshall -- X Obviously, you it for coming Is out large charging? Maybe Or gotten roles thinking. expect -- just one are from just you Gary, you What survive, your leadership? that could you And last -- and big future, we it the Marshall you. so

that question. for you Thank

Over expansions of opportunity, the had and last both are an happening. business years, few expansion of we've

and we and our quickly help and has that make high-quality something business systems on business make asked The the want that our double to customers help can, to our drive scale. lot very take really an side, in about data at and doing can it's never serve care things flip the sure of that to ours opportunity at real have advantage kinds side customers been And we to sure global that have advantage to that's invasive for have the to that we like that master scale of more serve down regions I've Marshall and opportunity I we that customer. we that that interventions. can enterprise them the positive we of take of And minimum companies it's business in a local the and our On been where is we work. help long-term our really well do a

lead more for that many effort just qualified has of is and than like open us to done there's so visited and architectures agility of things I get the and opportunity Dave think And scientist And real about started quickly who have new be Company. to new to all and nobody able I'd can new to parts ideas there. as And us. and Rosa, engineer there He off to an the focus markets.

the agile get on as opportunities to of scale customer see in to growth be we trying really we're them. also help capitalizing and global advantages So our

Thank much, Gary. you so

question Next with Go ahead, Matt UBS. from please. comes Taylor

the helping good keep for get could you doing the the managing of really any understand there help times in understand likelihood could like benchmark are you but meaning, you there. a And to Is lead us far. can get so how close this taking things a issues Thanks give supply or some key what just you that the us are question. bit numbers little disrupted talk or to is us is more chain you from maybe, I the to of of exists there getting ship of that edge the question? product it risk some able it job sounds with not better core out standpoint the being the hoping guess a Hey. I the you've real visibility it about was Is that Marshall, will calling been happen? or risk things

that situation can think some it's I think don't it's I and difficult continue for will time. getting better. say actually I

take long you've auto about you fabs, one time will chips, had a the that know will to takes there. problem an I It a any time order And would produce build well most, there's That so think product, about if you takes you semiconductors, in that the hearing. next to the contained remedy. the industry, that it's that's computers. to that and it a in been issue go long If long talked it think we're goods seen year the to predictions into a time home

marvelous has think I Gary team so told far. done you our job a

been how team far I regular have some a So what cases provide has think able not on or and to X that beyond say products, but That's pretty issues -- issues just resolve any it's our that apply some are statistics often, all so you months. I to it's you lead means. in and everything, don't anecdotally, those. to the basis, would I it an extended have some there on not times average long. our should

think sure so to a that as you're aware we make I And of risk. it's just problem highlight the

much. you Okay. very Thank

a Amit we from And have ahead, Go Hazan follow-up question with Goldman Sachs. please.

is start we go. things these next just or normal growth for was just material think along commented follow bit qualitatively where that. more early cost just today normal Marshall, Thank the generally. start growth margins And year you times. year maybe operating just you for as the to just seeing about up versus versus inflationary and thinking for supply spiky just times headwinds in costs what labor with the to raw I might to on us about And how hard thought question it's chain on a little more on you're

cost effectiveness and have hearing We've job from suppliers But with raise our increases. we're prices. been that costs. haven't sort Again, they increased going to efficiency a And to significant. offset of teams marvelous they're done seen frankly, some that those their

expect and go costs say inflation here supplier's but we we're it that to seeing am will where has more. saying hit Not costs. is hey, we us that stay, the sure. to raise so some that I want And are up

you. Thank

from go Our ISI,? ahead, next please. [Indiscernible] Evercore ISI. Evercore question comes

-- shortage in one other quick the a we we studies, XQ. little Intuitive see Gary, has Gary? for the you. point Hey guys. these headline good number. the historically you at numbers, labor just good where maybe you. you Thanks beckon just else I for market study an Thank just is I'm taking it's It resolution. out the and But is enough, itself? new look my XX% we numbers peers. The one’s curious, diagnostic but there perhaps inflection X -- pandemic quick should when question. any that was a precise And XQ. Certainly, when to on know in called Was adoption of Because XQ impact on? Delta impact excessive haven't seen there going the or something one in Ion? outperformed Could

Okay.

in linked diagnose? one, is, I they said I'd then are the and there's important of and size what's the what of advise stay you first together. definitively is at. what terms diagnostic couple everybody are a diagnostic That's what that numbers the And On And the ability guess the lesion XX% looking positive of the yield, that to pulmonologists is? rate, had interventional

to rate go yield diagnostic because lesion, the definitive[Indiscernible] the your is lesion, going your hit. So to bigger it's it's up X-centimeter if easier

So got look numbers. you not to It's single metric. a at both

lesions for are as for far I tell endobronchial as So that XX approach. smaller leading, for can approaches

targets. get yield folks they higher to can bigger hitting rates, Some are but

So do. that's encourage to at you you to and need I what look both,

outside I at a the have approach. biopsies than safety lower ways that thing endobronchial gathering be body, is a There CT-guided outside the second can needle the there they other rates CT-guided and The or you high advise body examine but biopsy. success that are have those the to biopsies, profile tissue, needle get

did rate. Ion that as of uptick competitive you see. trying approaches, the How we're third at result. lesion what all nice And were was needed And We'll you target? diagnosis? a there's we get So was Then a a definitive think seeing a those good dimension, tissue is, to really that the which tipping is and is a big relative to complication to the get you managing X point?

customers, are So good. We're we think to targeting. perhaps Delta, second everybody were because I'd little and others. With multiple and slowdown where their bit to you then over and it regard question, so be about being are unusual going there we talking seeing you in That's where borne more had a what growth. your far, of This helpful. world is that's pleased or see sites the an is of they that's out about multiple were encourage to performance, expected. to think kind exposed we seeing What aggressive what we

simple have in with regional our may a but Delta. have exposure done. case, have as on or countries markets having I bigger time So that as it's our say we being will are tell to Other lower Frankly, that procedures certain to well. a as profile do that, impact companies think where much

ahead So to continue let's That In durable last opportunity fundamentally substantial improve a question. go and surgery our closing, we and conclude. there believe was is interventions. and acute to

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

Thank participation AT&T for using your does for Ladies you that conferencing. call the and gentlemen, conference and for event today. conclude

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