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How Are Intuitive Surgical’s Revenues Trending in 2019?

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Revenue projections

In the first quarter, Intuitive Surgical (ISRG) reported a robust rise in new orders and installed base of its robotic surgery systems as well as in the total number and type of procedures performed with these systems. In the first quarter, the company reported revenue of $973.70 million, a YoY (year-over-year) rise of 14.89% but $1.57 million lower than the consensus estimate. The revenue miss was mainly attributable to an increase in operating leases as a percentage of total placements from 29% in the fourth quarter to 33% in the first quarter. This trend caused the company’s average selling price per system to fall from $1.49 million in the first quarter of 2018 to $1.46 million in the fourth quarter of 2018 and $1.31 million in the first quarter of 2019.

Analysts expect Intuitive’s revenues to see YoY rises of 14.64% to $4.27 billion in 2019, 14.66% to $4.90 billion in 2020, and 13.77% to $5.57 billion in 2021.

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Capital sales trends

According to its first-quarter earnings conference call, the company reported a 27% YoY rise in total new system placements, while its installed base rose 13% YoY net of trade exam retirements. At the end of the first quarter, the company had an installed base of 5,110.

According to its first-quarter earnings conference call, in the first quarter, Intuitive Surgical reported an 18% YoY rise in global procedures driven by an increase in general surgery procedures in the US and gastrectomy, colorectal, and urology procedures in Japan. The company reported a 17% YoY rise in procedures in the US market and a 21% YoY rise in procedures in international markets.

On its first-quarter earnings conference call, Intuitive Surgical raised its forecast for YoY growth in global procedures performed with its robotic surgical systems from 13%–17% to 15%–17% for 2019.

Capital sales generally demonstrate a high level of quarterly variability. An increase in operating leases as a percentage of total placements in the first quarter is expected to reduce future revenue volatility for the company.

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