Intuitive Surgical, Inc. (NASDAQ:ISRG) Q4 2022 Earnings Call Transcript

Travis Steed: Hi, thanks for taking the question. Just curious, Gary, I mean, you mentioned no new multi-port platform in 2023, but curious how you’re thinking about upgrades to Gen 4, but that’s mostly just around the software upgrades you mentioned, or if we could see something more material with capability upgrades on hardware, imaging or things that bring the customer procedure down?

Gary Guthart: Yeah. We continue to add capabilities into Gen 4. We expect to do so this year as well. Some of it will be in advanced instrumentation. We are doing some nice work in our energy systems on the — both on the hardware side and some of the software side, and we think there’s some capability improvements that we’re going to be developing over time around core imaging capability in Gen 4. So we continue to make progress.

Travis Steed: Okay. But not saying if anything to come to 2023 or not on that front? And then while I have you, just any early comments on the capital funnel in 2023. I think last year, kind of, January, February time frame is when customers are evaluating budget. So I just want to make sure things seem fairly stable with the capital funnel?

Jamie Samath: On the capital funnel side, what I’d say is, given the macro inputs from customers are our sense is that they are still relatively cautious. I think there’s quite a bit of uncertainty still in the macro. And while, for example, staffing shortages have improved, they’re still quite a bit worse than pre-pandemic levels in terms of labor costs, vacancy rates for hospitals. So they are being careful from a financial perspective and they’re cautious given macroeconomic uncertainty. I think our experiences in the second half of 2022 has been where customers are seeing nice growth in their robotics programs. da Vinci stays as a relatively high priority in terms of their capital budgets. But beyond the fact that they’re cautious, I wouldn’t say there’s anything specific I’d highlight in terms of 2023 outlook.

Travis Steed: All right, great. Thank you.

Operator: And our next question will come from the line of Rick Wise with Stifel. Please go ahead.

Rick Wise: Good afternoon. Hi, Gary. Starting off maybe with the new system, thank you for being so clear about your thoughts about the timing of a new system, i.e., not in 2023. But at a high level, could you talk to us about your thinking about why or why not? I mean, I know obviously, you’ve — you’re always — the company — for your entire history, you’re always thinking about what’s next and getting ready for it. But how are you — is it the technology that you wanted to have isn’t ready yet, or this is more about competitive positioning or the difficult external environment on capital makes you hesitant to go ahead this year. Just trying to understand your thinking about it and what that might say about the future?

Gary Guthart: Yeah. Thank you for the question. We think mostly about what can we do that changes the experience of surgery for the patient in terms of outcomes and the care teams in terms of how they deliver that set of outcomes. And what we can do in terms of technology basis, products and services and training that can help that happen. That is the primary thing. That’s the thing that is front and center. And we do design studies, research, usability effort, all the things you would expect for us to make progress. And then we try to advance that as quickly as reasonably we can, given the environment that we’re in. We don’t do too much perfection of timing about what we think the hospital capital environment is going to be.