Intuitive Surgical (ISRG) recently held its Q4 2024 earnings call, providing insights into the company's performance and future outlook. The discussion highlighted several positive and negative aspects that could influence the company's stock price.
Here are the specific viewpoints from the earnings call:
**Bullish Points:**
1. 2024 was a strong year for Intuitive Surgical with robust early adoption of the fifth-generation multiport platform, da Vinci 5, and healthy procedure growth in many supported indications and countries.
2. Procedure growth for the full year was 17%, with strong performance in general surgery in the U.S., and regional growth in the U.K., Ireland, Japan, and Germany.
3. Ion procedures showed continued strength with 78% growth for the full year, and SP procedure growth accelerated with 72% growth.
4. The company placed 1,432 multiport systems in 2024, compared to 1,313 in 2023, with strong placements in the U.S. driven by the da Vinci 5 launch.
5. System utilization grew across all platforms: multiport (3%), SP (12%), and Ion (13%).
6. Revenue for 2024 was $8.4 billion, of which 84% was recurring, representing 17% growth over 2023.
7. Net income grew by 29% in 2024 over 2023, with pro forma EPS increasing 28%.
8. Da Vinci 5 saw strong adoption with 362 systems placed in 2024 and over 32,000 procedures performed.
9. The company announced the acquisition of the da Vinci business in Italy, Spain, Portugal, and related territories, which is expected to be slightly accretive to EPS.
10. Pro forma gross margin improved to 69.1% in 2024, with operating margin improving to 37%.
**Bearish Points:**
1. Bariatric procedures in the U.S. declined modestly in 2024 due to the rise in GLP-1 medications.
2. Procedure growth in China was slightly below the corporate average, reflecting competitive and environmental challenges.
3. Placements in the U.K. and Germany were impacted by ongoing government budget pressures affecting healthcare capital spending.
4. In Japan, financial pressures caused some customers to delay capital investment decisions.
5. Pro forma gross profit margin is expected to decline to 67%-68% in 2025 due to higher depreciation expenses, product mix, and FX impacts.
6. Leasing rates are expected to increase, which could impact revenue recognition timing.
7. Higher legal expenses and depreciation costs are anticipated in 2025, which may pressure operating margins.
8. The company highlighted potential risks from increasing competition, which could lengthen capital selling cycles.
9. The mix of benign procedures, which typically have lower instrument and accessory revenue per procedure, is expected to grow, potentially leading to a slow decline in I&A revenue per procedure.
For more information about Intuitive Surgical's earnings call, you can read the relevant news: Intuitive Surgical (ISRG) Q4 2024 Earnings Call Transcript
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