Intuitive Surgical (ISRG) Wells Fargo 21st Annual Healthcare Conference summary

U.S. and global procedure growth

• Focus remains on global procedure growth, with U.S. comprising about 60% of business and showing deceleration due to factors like lower ACA subsidies.

• Procedure growth is modeled by adoption curves for each type, with opportunities in benign general surgery and early-stage cardiac and nipple-sparing mastectomy.

• Growth drivers through 2026 include general surgery, after-hours procedures, and expansion into new indications and care sites like ASCs.

• Extended Use Instruments program aims to stimulate procedure growth, especially in cost-sensitive areas.

• U.S. bariatric procedures continue to decline, now representing a smaller share of total procedures.

Capital equipment and market dynamics

• U.S. capital equipment placements remain stable and strong, with 267 systems placed in Q2, up 24% year-over-year, driven by da Vinci 5 adoption and system upgrades.

• Most U.S. systems are acquired via non-purchase arrangements; OUS placements are up 12% year-over-year, with strong growth in Asia and Europe.

• The 340B program's impact is uncertain, with potential effects on hospital budgets and outpatient reimbursements.

• ASC placements are increasing, with 27 systems placed in Q2, supporting mid- to long-term growth.

Competitive landscape and innovation

• Competition is based on the full ecosystem, including software, AI, and integrated product portfolios, not just robotic hardware.

• Boom-mounted architecture is seen as advantageous over table-mounted systems for procedure breadth and patient size.

• International competition is intense, especially in China, but a segmented portfolio and ecosystem provide advantages.

• No observed elongation of selling cycles yet from new competitors; Ottava's impact expected to be gradual.