Intuitive Surgical (ISRG) 19 Oct 232023 Q3 Earnings call transcript

Thank you, everyone, for standing by. Welcome to the Intuitive Surgical Q3 2023 Earnings Release. [Operator Instructions]

I will now turn the conference over to your host, Head of Investor Relations, Intuitive Surgical, Brian King. Please go ahead.

to Quarter welcome Conference and afternoon, Intuitive's Earnings Third Call. Good Guthart, today, Jamie we me our have Dr. With and Gary CEO; CFO; Samath, our Chief our Officer. Curet, Myriam Medical

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

SEC's reliance Our to cautioned SEC filings such be on through can the Investors place website. not found undue our statements. at forward-looking are or website

press note for this Relations on Events available section Please under at our data website. posted audio to replay Today's and call be Investor intuitive.com conference our website tables have the release that our been supplementary financial will on page.

our question-and-answer outlook of XXXX. will of you question-and-answer present earlier financial followed Gary and business will financial a consist providing the will results, will operational our present quarter release provide And Jamie I quarter's will with provide finally, a will review of today, highlights, by described highlights for highlights, a announced clinical session. and host updated our session. format our and press results, Myriam discuss as details Today's we procedure in third

it over to that, turn Gary. With I will

our healthy in with conditions remain growth a third this system utilization amid quarter, placements in consistent and today. saw growth you Thank us new for largely procedures by performed solid joining strong market QX. that customers, In we

and new digital healthy continue with use modestly procedure and gain in growth platforms installs growth growth our tools. accelerating Ion and to SP procedure continuing, customer installs ground Our of

regional Areas Japan, XX%. with in procedure quarter United was for growth quarter. procedure Germany, general line cholecystectomy procedure in resection. colon of and da in with China average surgery surgery U.S. growth global procedures. growth broad was to in benign the dermal India Vinci first conditions, standouts. and and the strength Turning U.K. the led was the particularly included growth by States our

Ion continued in procedures growth the with in strength procedure accelerated States. growth strength United quarter. with by in showed driven SP global XXX% the quarter growth XX% the

On QX last the QX capital we XXX of compared systems systems in year. front, placed in XXX with

XXX systems clinical da now Ion Our base installed multiport single-port and Vinci systems. XXX stands Vinci systems, da X,XXX

demand for placements Overall, and our for modest our placement capital of proportion acceleration of leases for new system in The greenfield continued capital trends multiport, in placements reflect SP. of think Generation a additional in X systems. Ion capacity acceleration accelerated with rates. using the leasing the in our the quarter We and highest multiport program maturity reflects the the the leasing convenience leasing U.S. of our interest

need they technology leasing customers where for reduces total and enters for clinical capital allows for relative our economics and the predefined as healthy in-quarter our customer our provides pathways build when it capacity purchase, are us. it market. new to While to revenue Leasing and

still The installed was X% growth growth per quarter X%, system procedures above utilization, down quarter per as rate system last in from rates. while defined historical

needs benign for customers' healthy economically procedure capital and of return procedure of our indications Higher invested shortens use in on Strong and increases increased growth and utilization average scheduling. proportion us. times is

Turning finances. our to

were spend expenses Our and quarter our XX% our revenue within guidance. the grew operating in

amortization. commercial of and our manufacturing reflects footprints platforms Our and tools, capital continued research in growth spending development to and digital support our investments the of and expansion

acceptance of instruments, of picture, at digital our scale a accelerating services. their Customer are global operating da and is SP new Vinci of and robust is training early tools through at the is indications embedded our in in platform fourth-generation momentum with our Looking stages. pipeline, Ion platform our strong. ecosystem Acceptance broader and the da Vinci accessories, building

Dr. call, Chief our this and we're Medical Myriam take indications. to some us to the through Intuitive's will Curet, welcome she and of doing expand Officer clinical We work perspective

our unavoidable once fantastic Our supply from years. lowering of resources our operations and our again as past cost now product teams supply did the a away chain customers ease, job through we're several product the supporting chain reduction shocks attention diverted pivoting to costs. This stresses effort

in include opportunity accessories of program, and instrument Ion lines. our SP advanced our our multiport Areas accessories portfolio

efficiency gross margin manufacturing work completion, other quarters expect facilities the as coming and complex products of through projects, timing programs. we the these over improvements for new in Given variability we

our digital to growing tools our and nicely. is of offerings, channels digital customer Turning use

year-over-year Scores Our Promoter My are rates grew installed majority app improving simulators over SimNow our renewal outstanding. at use of Intuitive time. sites the and surgical strong receiving over Routine is that XXX% subscription customer of Net are XX,XXX da surgeons and by continue Vinci by

Our media telepresence and management installations XX%. captured cases the in surgical Hub XX% quarter, system Intuitive grew Hub and grew

in In driving product and platforms. healthy. down, our ecosystem closing, demand core cost is particularly for newer We're our focused on our internationally

are using we analytics, We that catalyze significant improve pursuit are our our long-term in and to integrated dogged opportunity by the of ecosystem pacing aim investments to opportunity. quadruple powered

finances to over our the through will turn now Jamie, you time greater detail. in who take I'll

website. afternoon. prepared on of performance I pro will summarize our basis. performance GAAP is pro also a Good forma our or A forma reconciliation my GAAP I our in will highlights between describe and later remarks. posted the non-GAAP our on results

be to base global utilization XX% in system installed Vinci da Core and an increase XX% the X%. in average of in of increase systems metrics and growth an of procedure of QX, with continue healthy

key healthy. indicators Our also were financial

the forma to first compared margin lower forma Third XXXX. U.S. earnings XX%, half XX% quarter grew year. Procedures recurring last of and revenue in benefit over pro grew backlogs share reflecting XX%. Pro was per operating patient increased XX%, the from a as

in given to a patient slowed X% growth represent growth as procedures. had total highlighted bariatric's weight the rate interest Bariatric's rate we of and between global loss procedures U.S. QX. double-digit Last lower in to continued we In quarter, compared modestly QX, that our in X% drugs. albeit procedures growth see at

Based bariatric third-party segment. believe we to market the we continue surgical in gain data, share on

with procedures in OUS in year XX% Japan. a quarter. base the the last with relative India, COVID-related given our than ago from quarter lower period Germany, China grew lockdowns consistent the recovery strength in strong was U.K. growth due to and expectations, Procedure

approximately trends, recent the of with United growing was outside in growth Consistent accretive, procedures at XX%. non-neurology States

led in Japan, cancer our adoption Germany is larger procedure the high-value the U.K. colon and OUS categories, fastest-growing Within procedure resection, a by

placed With quarter we systems respect capital XXX the systems performance, third last year. to in to XXX as compared

the delay encountered of a June year. reminder, a in As challenges of in system systems from last last shipment of year XX benefit July approximately of QX June into chain as we a placements from in supply result

in Late central we started lower tender resulting system delays of placements in processes in as QX. QX, efforts in primarily in by China to in the China, result government, see anticorruption a

in tender expect We delays system China impact to placements QX. to continue in

due year-over-year. operating of procedure an an decline was QX systems by increase to of revenue revenue the partially lease driven mix growth, QX was growth the revenue XX% significant in offset arrangements. billion, by in XX% increase $X.X

basis, currency revenue constant quarter also growth a On third was XX%.

a realized the current revenue. X% approximately stronger QX. at in the Given non-USD total in basis recent currencies is of represent Revenue rates U.S. average revenue-weighted approximately rates, XX% dollar on compared movements rates, as to denominated in exchange

XXX in compared systems XXX Additional last to U.S., into with placed the systems into and included we revenue and last trends in into XXX Japan in compared systems as in and third QX into XX XX Current follows: statistics China year. XXX last are QX into China systems placed quarter Outside the XX of XX quarter XX with the Europe, U.S., placed compared system Europe, XX year. year. placements into Japan we

QX of to were the placed in the third year. transactions last XXX compared XX transactions in trading quarter trading of XX systems

XXX As the are of the base, of which installed QX, are the remaining of in approximately SIs XX end in U.S. there

U.S., last operating last placements the XX% an XX% placements compared customer last of under lease usage-based Of to reflecting particularly year. year, of In to XXX leases the quarter, year. were Operating compared placements lease arrangements, QX preferences, with operating third in compared increase arrangements system were quarter in XX U.S. XX% XX% the XX% represented in the

continue quarter-to-quarter, While expect the of under we placements fluctuate operating leases to from may that time. leasing proportion increase over will

XXXX. prices decrease in the We selling quarter were year. quarter was recognized million average $XX with revenue primarily ASPs system and lower million of buyout lease driven and system QX last $XX mix. QX pricing from year-over-year $X.XX third million $XX by million compared compared million to of in $X.X in last quarter geographical The million $X.X last as

$X,XXX and halfway da through $X,XXX reflected procedure Vinci ordering with quarter offset of of the last by per the and patterns, $X,XXX, procedure customer basis, instrument per sequential last went quarter. On into compared full increase year. effect from I&A partially price a revenue quarter impact last lower that approximately impact a accessory I&A approximately

In QX, Turning XX placed XXXX. Ion our XX as to compared we in of to Ion platform. systems QX

system accelerate of compared the XX% Third SP continued year. year. the grew quarter growing XX U.S. XX were SP Korea. average systems increased approximately XXX% as Ion QX last and and third last procedures by in to systems, of X to quarter XX,XXX of growth to into placed procedures into compared the XX%, utilization

Moving with P&L. of was the the quarter on compared the Pro year. forma XX.X% third margin XX.X% for quarter last XX.X% to last rest gross and

pro XX year related favorable points QX indirect tax approximately As forma benefit to conclusion reminder, basis a gross last of matters. in certain onetime of a of margin included the

primarily significantly higher as increase. by forma difference Vinci which margins the The gross I&A the Ion system pro a remaining partially in offset mix da price currently to business due ASP, to and of revenue, lower carries the is compared margin lower year-over-year

significant given factors: QX, XXX manufacturing are to historical of averages, our approximately line by capacity, targets secondly, supply number first, increased last capital locations. couple are have facilities to increased in and we new building facilitate making the Inventory we transfers years; modestly bridge driven an to stresses inventory elevated we days X investments higher over in chain given than of and inventory

XXXX. higher As norms historical a result, relative we of expect inventory to into levels

increased operating primarily quarter higher driven forma X% costs. year-over-year, Third pro by expenses headcount-related

our and growth. points manufacturing XXX for of compared planned lower in last employees, During year as the enabling by by QX expenses operations were support basis which leverage our of percentage our of revenue revenue quarter, count SG&A functions. reflected as XXX approximately to head largely a XXX increased were of in

QX in primarily investment U.S. and in in income the was consists manufacturing last compared facilities reflected to from QX year as other also the were of $XXX expenditures foreign Pro million, quarter average rates Pro balance expand of increase interest quarter interest was balances. QX capacity. than by exchange increase last and $XX comprised to as a typical income and resulting million million result Other $X sheet losses and remeasurement last higher our higher footprint and higher other compared strengthening cash of last income year. $XX forma forma to primarily investments million income the infrastructure of of dollar. Capital driven

Our pro was the rate quarter expectations. consistent tax third for effective XX.X%, forma with our

in The net results. the million was per forma third our was income increase net $X.XX and over and quantified with operating discuss associated GAAP are of highlights. from offset now cash million ended per from pro will of $X.X last million $XXX that, or GAAP employee benefits last XXXX and compensation, of to share for net GAAP between per quarter income by quarter outlined it $X.X of $X.XX Myriam, stock-based sequential awards, partially employee reflected with strategic our website tax share the compared quarter third and quarter cash share and $X.XX with amortization million and exercises and or XXXX. to for per income capital investments activities with employee compared gains cash intangibles $X.XX I and the billion investments. We excess year. I $XXX The pro on with quarter. stock like on of $XXX forma of $XXX compared GAAP clinical income with will who QX expenditures. And share net or adjustments turn or include Third for investments summarize losses billion proceeds stock would

Thank you.

these our highlight deem quarter be calls, to Now turning Each on for side we clinical that notable. studies the to we certain business.

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

that of access specifically start addition the value our single-port status support reach difficult Vinci system to tight important some of projects or the I'd relaying procedures potential of for one these In our to Intuitive research requiring the areas. systems of refined to da studies, underway like in results company's by anatomical describing to belief

clinical colorectal platform. U.S. In using enrollment XX colectomy, on patients across study Intuitive low June X right with XXXX, or as complex the an focused resection FDA-approved Currently, launched procedures, the anterior is performed such SP sites Korea. and in complete

for thymectomy with completed FDA-approved in in subjects Another in trials XX centers year pulmonary enrollment enrolled procedures and rapid this performed of SP using across lobectomy June the U.S. X

been in We believe that enable plan X data intent study technology completed. VATS outlined FDA will Intuitive the the approach. studies a and thoracic may after perform to using the Intuitive uniportal the that data has to something be to single-port difficult from surgeons follow-up submit lobectomy, patient analysis these

Annals this University Dr. Patel This in cost to of titled comparable published is early Now Canada I'll video-assisted in utility sponsored scores published was RAVAL the study trial the in study by not to Surgery Robotic of lobectomy. Intuitive. August. effective McMaster health results Lobectomy from a a provides turn and past notable manuscript Yogita

This study the all performed controlled multiport VATS randomized robotic-assisted comparing And and new describes results subjects, XXX lobectomy. VATS XX multinational, the with group. approach group It analyzed a in a and pulmonary Vinci to Vinci robotic-assisted in da were lobectomies blinded, XX platform. study multicenter, from da

a which in lobectomy patients score procedure. quality da undergoing significantly Notably, at the and underwent was was for the VATS life post weeks XX Vinci da health Vinci better patients for weeks arm X utility who of than higher the the procedure, suggests

VATS and related per the $XX,XXX was adjusted robotic of authors reported for the the Interestingly, and analyzed a approximately group outcomes, quality to or of to the year. with quality cost-effective associated group ratio life ICER life incremental relative robotic gain

nodes in and In addition, Vinci sampled da the lymph the higher median of examined significantly number were Group.

a conclude is I robotic who Brian patient-reported pulmonary which procedure that authors turn updated lobectomy." And with the outlook it lobectomy will to VATS results cost-effective the our from that, summarize, To compared comparable and when associated with to highlights discuss scores "Early over like utility is that, provide for suggest trials RAVAL intervention, health additional to would XXXX.

Thank you, Myriam.

was within for the was to of growth QX quarter strength of of XX% to year-over-year for compared procedure quarter the XX% up quarter and third growth growth general quarter. XX% by U.S., beyond XXXX was grew of now procedure by OUS procedure U.S., third overall XXXX urology, and which quarter. surgery, make XX% XX% OUS third with procedures. for quarter led the led quarter. procedure with particular and total resection. Outside compared last in the year-over-year Our the last of third XXXX procedures growth XX% third compared cholecystectomy quarter was XX% XX% strength XX% In last XX% third and colon volume approximately quarter XXXX

continued in growth of by growth to kidney and U.K. we In procedures, Europe, procedure primarily the growth Spain. Germany, in urology from with gynecology in double-digit also in to Growth hysterectomy specifically the surgery U.K., in healthy, followed growth. each General Germany strong led colorectal the and noted, experienced be regions prostatectomy. In continued by growth strong, along was was general procedures by growth in and contributed colorectal procedures primarily procedures. strong procedures surgery, led

led than the our More procedures, and was half consistent strong colorectal led was procedure procedures. quarter. general country in of In growth by consisting Japan. growth Asia, by In incremental in expectations the procedure largely growth for surgery China, was with gastrectomy of the growth

notably by driven and neurology, kidney was Growth procedures. prostatectomy primarily in

hernia our XXXX. cholecystectomy the saw general in stage with procedures. I year surgery full early gynecology range to in of On In a growth namely for strong XX% we within turn and growth last outlook and growth of now XXXX our call, procedures, will financial India, procedure in to repair XX%. adoption, while forecasted procedures. Starting

health a range, rates or impact impact XXXX and around high with have macroeconomic now bariatric The the raising the to bariatric range a the expect reflects XX% hospital the end elevated full constraints. procedure are end XX% macroeconomic in year XX% significant we of hospitals of continue U.S. returning and We not challenges of the hospital could and challenges that continued low and U.S. volumes the to on we in not of the QX. rate growth growth procedure to XX%. supply of duration care, volumes, disruptions spending. At low from rates significant patients patient end in chain do capacity slowing assume growth range does material procedure at The uncertainty experienced reflect the

XXXX our pro profit On call, margin to and XX%. to XX% profit. gross Turning our gross last be year forma within forecast we full

We pro margin gross forma are now and to refining our be estimate within profit XX.X%. of XX%

trade-in quarter-to-quarter product gross Our impact will profit on largely product, introductions. depending mix regional the new actual vary margin and and of

forma our operating on With call, to XX% expenses, XX%. forecast respect we operating growth to between last and be expense pro

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

are million noncash million of estimates range to for $XXX to million $XXX between from million. lowering refining estimate We stock to also expense compensation previous in the $XXX range $XXX our XXXX, our

previous XX% between the estimate our pretax from upper previous capital be tax, the rate other reducing With million XX%. $XXX we estimate between to our comprised in the million interest narrowing to $XXX tax the million to our range of million and rates. With to XX% increase expenditures, and of We increase of range and primarily for $XXX interest which XXXX reflects estimate for of income, in rise The end $XXX estimate are income income, pro are estimate an XXXX, refining to facility activities. total million. income, of construction mostly regard from to is our the also $XXX are planned increasing for between forma to $X XX% billion, we primarily regard

comments. prepared our concludes That

to the questions. will your We now open call

first go the We the from JPMorgan. Robbie to question Marcus, Instructions] [Operator line of

good it's GLP-Xs GLP-X thoughts try a on the seem particularly Congrats big quarter. just becoming Maybe on And more impacting you surgery very else, any it. surgery positive tech. impacts It your your bad in loss weight escape be come -- anything start, in and foresee in topic ultimately it's is could And or a to funnel? But business? to impacting other pipeline. as here. people doesn't overall, the that to wondering good hard be med bariatric

Robbie. Dr. a Thanks, to weigh going first of question, and implications to in ask talk the I'm ahead broader and part surgeon as that about Curet bariatric after on go your that. we'll

I correct. think are you

short the patients in are pipeline in term, bariatric drug. will think going who I to the we or see for surgery are considering the try

However, at costs, expect not of a we'll them stay than issues, given that longer effects, And side that or compliance we drug the bariatric surgery. consider year many X. time, for will on

get So interest I the see surgery, increased in short in overall, but an term. we'll think bariatric delayed that will

wanted Robbie, GLP-Xs? any you on follow-up

question after. I a if Jamie, financial for okay, had No, that's

Please.

so our for margin with into expansion on I'm think and all forecasting. really gross next to like down ticking investments get I amount, the whatever Jamie, is depreciation, a about was talking you or here. size bit, if the cost margin about you're based and how of it looking set we the some and we're looks could new gross quarter fourth contraction depreciation these could year wondering increased

Yes.

range we you're really next the That's that significant capacity online. year expense not some in in reflected provided. of come depreciation For more as really QX, the manufacturing seeing facilities and

the there's a line of plans just the FX a in bit really have, large reduction mix but lower not and in slower midpoint, small, than What a QX. bit range have of dynamics the cost slightly the progress as QX had product what They And those how we transfers then margin planned. little is you're It's are of rates slower that delay. seeing year we previously. that's given moved, than the to had little slightly some dynamics why reflected in we is gross now some for at relatively be to

of in what I in some frankly, his up how the on we're margin global to to and issues the shaping variability as those our prepared the over that the accumulated of we'll are chain costs, say and just time our encountered quarters several will manufacturing some is supply the built Ion is And number side. in product would 'XX take for is, improve ongoing there we to addressing. respect remarks, over up, efforts They just And Gary operations. With inefficiencies us COVID that depreciation a see next particularly said expense gross because resolve.

say to plans. get you for guidance to gross we work margin have because I'd So 'XX when January those give through us I let think we still

of We'll go Travis to America. Bank next Steed, line, the

I projects. prepared Gary that. manufacturing the said, guess to complex know and new other for follow like improvements it I up products on on remarks, sounds

what So products just elaborate of if complex those some you on margin. and impacting that's curious new are those and could projects the gross

Yes.

drive side, have by is base, product on work the We and to accepted and to manufacturability Ion. On do costs iterate quickly. Ion. well Ion we the manufacturing growing on need real customer

mainly was was what referring that to. So I

accessories Some line real We assertive the want to of in the be are there. opportunities. SP

of So product that's side, is. reference on what the the most

element. other one Just

in-sourcing there's automation of that the there. a line are the part as side in some on multiport high-volume differential We accessory in-sourcing

some there's that, be that targets. to our get at to ramping so And work

Maybe Great. of and some staffing were And growth COVID. 'XX, adding and just procedures, swing some procedures, I do growing like Helpful. and And swing about some in the of to could still bariatrics talk you the factors you are the minuses China on in in to on coming going the going into XXXX and 'XX? the of swing procedures China, and pluses factors think be imagine bariatrics factors. there's this into China, pressures year,

insight. it get Brian. XXXX, that this of at more when be give think able January, at now. to bit thinking you this point. nothing a just guess Travis, leave into share I'll really I I to for we'll is we I But Clearly, guess

topics X just you hit. me pick Let up

demand procedure I remains the the think side On side, China robust.

of a activity government a there's think putting some that's in the bit I chill little market. policy

other caps and pricing is price hospitals forward of any giving programs. that with economics, in corruption Some some is of it is new that moving pause value-based and probe so some

see. We'll

I think for persist the -- side on pressure side likely likely several China quarters. to China is some is to the

quarters. think On hard we'll find a bariatric that new that the marketplace. happen. to in in when It's will few We'll exactly side, predict normal I next play the the out see

Biegelsen, We next Larry Fargo. to go line, Wells

Gary, leasing to you has those rates scale. about the systems the other gotten your usage-based program Can some And talk any on average? relative share? utilization themes you could

will turn Jamie here kind on I Sure. to utilization of rates.

you off? don't why kick that So

Yes. to compared what the a on are very ways it, leasing the is X purchase to compared utilization similar. at to is X There's Actually, arrangement. those absolute tight. look mean the They very tightness rate structures Larry, between regular a

the Within target customer level and that contracts. portfolio above targeted we that at again, have success the we that the reflects have. those the a generally for of the embedded slightly procedure the procedure run levels have if economic arrangements, objectives they you you program in And accumulate

well run why recent times. have it's so the have those we far, customer in quickly they and so So the expanded reasons very and one of

the That's it go was helpful. leasing was quarter quarter. Or mean, almost to going? in XX this does continue see and that you Have over And that where higher? we plateaued? -- U.S., it do last I

to to XX% quarter, routinely room. this that creep really There important little manage proportion to be think a bit, just of room customers the But that last global way pretty the quarter. we appreciate of that XX% larger is out, are there's some Larry, prefer IDNs U.S., I out totally number leased that have managed high, that up We purchase to budgets. that a obviously, find. in just continue are the U.S. are U.S. continue a to some running them. expect as capital for affects metrics you placements what basis, how to a of because even of will to pointed as found On through

Blair. we have Brandon Next, Vazquez, William

obviously kind general penetrated to been in My about do international. surgery, little Maybe a nice adoption path catalysts that growth the my it's a I time little one, you international lines the U.S? curve here first think for get for the What surgery understanding in that's needs a in bit talk happen less of is the wanted general they part seeing kind you markets on to as Are U.S. of and well? to of steep

question. to is comprises think one done indication. Sure. about that cancer procedures that both surgery is it the for Thank general that and way cause you where are underlying the On are benign -- others

the cause, an underlying cancer growth markets. several early in On as OUS seeing nice we're

So healthy, and enthused. there, that's I think we're

are are think place the places many I of generally reimbursements in we in operating. that

what data has that's think I good clinical in coming out been supportive.

those be I benign has of in that may work of markets, seeing done to as some indications, reimbursement you think some further. about we're or of for there benign think progress the beginnings indications education insurers that to be

to do out. setting, additional as that it in work plays we'll So have

AI future I going maybe so last that of How maybe things that one about a Case on talking quarter, are And launching, of in kind called platform. Great. for bit were what's a Insights, I for you think updates as then believe end? it And guys was the kind me software Any follow-up, program? far? last little the

for Thank Yes. reference. you the

surgical is machine our Insights Case looks learning program AI So science. that at

We have you our first quarter. installs and last it with going. cases We talked about first had

is So computational here as super centers research something the it's observer. described we early. a Insights very prior that early on some We're have innings done on really academic good. with that far, had we early Case and in feedback, builds

scientific pretty have for good we So underpinnings it. some

time OR. giving about might to procedures improve improve giving and for efficiency learning their other to and and parts over they total feed company specific how will that expect giving programmatics insights We to technique surgeons care guidance suggestions different management, to of teams that, into system about from about the program the analytic cost insights hospital's skills the in where to

a long-term it's think the really around science it. set we remain of of We So investments surgery. excited about extremely

look do forward We time don't a it expect it for to it, is ecosystem to it on. you think serious revenue to And more we be goes as While some an we revenue have driver. we complementor. describing

Matt go to Miksic, We'll next Barclays.

on on system one and of sort I trends -- of So the the follow-up pricing. kind on effect on had leasing bariatric question one

comments at about you bariatric, mentioned quarter maybe that growth similar talk maybe saying the business drug to bottom And maybe I just or the something on if represents to line if expect suggest X up folks getting second follow in just within. the then that business a -- the off given you or So year that's or on the ASPs, third and your you of of out of trajectory with briefly could. procedures getting stabilization longer trajectory on could kind global question in quarter to grow the a and I'll that whether percentage bariatric path a

might the Yes. the us is kind to what Jamie, of speak that of business a or percentage bit for deceleration acceleration of little and size you or trend.

sure want got make right, Matt. Yes. I to it I And

further to total which come you about So in U.S., global X% the our bariatric QX the then of Were back average the U.S. is saw we those declined U.S., your the was rate our in what bariatric decline procedure business What was X% the procedures. where volumes if in saw But growth have and in wrong questions? are, of QX the a majority it questions. little me I modestly in to represents QX. to about

below it guidance, And I quarter, single-digit in other mean, -- or I is of that the expectation but at -- -- am some open in slightly because very decline, a that zone, growth you hearing [indiscernible] No, the out average your framed that's you rate guess, just it I your still laparoscopic correctly? competitors decline, saw like U.S. just guess, in I answer helpful. the mentioned actually Is doesn't in seem one this terms bariatric right? your you're Yes. You're third of but in then I or

Well, our you been take bariatrics some if for share procedure in to we're market, relative growth and time. taking have

GLP-Xs. in overall that So company reflection to in in relative of decline, just even had the continue fact share we that do that's a surgery of fact bariatrics that had part to we and are growth there's another bariatric QX an impact a so to though double-digit the because taking

That's U.S. -- is -- calculation. very those And your leasing understand helpful. not leased as system ASP the -- not goes in as not understand then I ASP, up, that systems the included you it. just give U.S. it, are Got ASP the does other in I

just -- the could increased a the of in this provide, clear you I leases up question. affected whether numbers sort ASP have year-over-year you So know, maybe overall the to or suggested if if in that don't straight that's which that decline speak way is

the there for you U.S. correct. although effect, generally system be accretive purchased to is average. everything are ASPs described So when Generally, global mix can exceptions

as an effect, the in system has of in adverse itself and leasing significantly has in ASP. that effect So U.S., grown calculated for

on The other if international calculate used look you effect now systems then system thing being an that that to can ASP of with a a horizon. you proportion X-year greater see FX have

as for XX% Japan example, over So ASP the exchange a on X-year there's XX% based the translated. in on strengthened, impact in dollar how to Japan rate U.S. has system a basis

effect. So a there geographical is

horizon, relative expand existing enough you've we and as dynamic lower really in pricing greenfield long a in to to when slightly a at described terms third, fifth ASPs who look also ASP, accounts. the were they year-over-year customers you was what there's QX if system, previously seen a an our we FX are And than for just be that's of tend decline those in in fourth, looking effect

players. that some respect dynamics see do pricing China, we say would number in with competitive I the given of lower just to local

don't that see markets to on other And China some competitive this so ASPs really there's been system We in point. in effect specifically.

to line. And next Jayson Bedford, we'll go James. the Raymond

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Anthony We go to Mizuho next Petrone, Group. line.

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care with care. continue patient and predictable hospitals, ultimately, teams total termed better the experiences physicians pursuit to have teams of experiences better, for outcomes, customers patients, in for better more work their of our closely Our aim, care lower what quadruple and teams a cost

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Thank thank you, for We do everyone. you your conference. does And conclude joining. that

may disconnect. a day. good Have You now