What Are the Key Drivers of Intuitive Surgical’s 3Q16 Growth?




Intuitive Surgical (ISRG) registered a YoY (year-over-year) procedure growth of ~14% in 2Q16. Sales from the da Vinci System outside the United States also witnessed considerable growth.

The company’s instrument and accessory revenues rose ~17% on a YoY basis and registered a sequential growth of around 3%. Instrument and accessory revenue per procedure also registered strong growth and came in at around $1,870 per procedure, as compared to $1,840 instrument and accessory revenue per procedure in 3Q15.

The robotic surgery space is a niche market that has tremendous growth potential going forward, and for this reason, new competitors have started to emerge. Some of the major medical device players providing competition in this market include TransEnterix (TRXC), Stryker (SYK), and Medtronic (MDT).

Notably, investors can always consider the iShares Core S&P 500 ETF (IVV) for exposure to ISRG, which makes up ~0.54% of IVV’s holdings.

Article continues below advertisement

Geographical profile

In 3Q16, US procedures registered growth of ~11%, whereas procedure growth outside the US registered consistent performance at ~25%. In the US, continued strength in general surgery and thoracic procedures along with the growth in US gynecology led by da Vinci hysterectomy procedures contributed to the company’s performance. US Urology sales witnessed a slowdown.

Outside the US, procedure growth continued to be driven by the adoption of da Vinci prostatectomy and growth in kidney procedures. Apart from urology procedure growth—which is the major contributor to the da Vinci procedure—adoption growth outside the United States and multiple-specialty adoption are being seen in countries like China and South Korea.

Intuitive Surgical maintained its fiscal 2016 procedure growth estimates of 14%–15%, which it had updated in 2Q16.


More From Market Realist