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

We don’t — you can imagine somebody doing that, that is not my highest motivation. I think these things are sophisticated enough and complex enough to bring to market, that trying to time it perfectly with regard to the macroeconomic environment is not what we’re really driven by. We work closely with our technologists who are, I think, spectacular. We work closely with regulatory bodies around the world to understand what their needs and requirements are. And of course, we work very closely with key customers to understand whether the things we think matter, matter. And those are the things that we really do and once we find a pathway, then we work down that pathway. I have to say that supply chain disruptions that have happened in the last three years have impacted not only production capability, but impact new product development as well, because that puts waves and ripples into what kind of items people can procure for prototypes and other forms of focus.

So there’s a little bit of that in there, too.

Rick Wise: Thank you. And just as a follow-up, just if you could expand further on your China comments, particularly related to new tender quota expectations. And I just want to make sure I’m understanding carefully or we’re all understanding your thoughts or your embedded thoughts about procedure recovery as flow as the year unfolds? Thank you, very much.

Jamie Samath: Yes. I think what we’re saying is, we saw China procedures impacted in November. That got more severe in December, has continued so far in the early part of January, and we expect, therefore, procedures in China to be at least impacted in Q1 and perhaps beyond. And I think it’s difficult for us to predict, given the relatively unique situation China is in relative to the Zero-COVID policy that they have had. So we’re not making any specific predictions as to when and how that might recover. Brian laid out how that’s reflected in the procedure guidance that we provided. Separately, on the quota, we’re in the third year again of kind of new quota period, the last two quotas have been issued in the third year. We only use that as a historical reference, nothing more. We don’t have any particular insight as to when a new quota might come.

Rick Wise: Thank you, Jamie.

Operator: And our next question will be from the line of Matt Taylor with Jefferies. Please, go ahead.

Matt Taylor: Hi. Thanks for taking the question. I wanted to ask one on China. You talked about the uncertainty with refreshing the quota and then some new local competitors that are competing for tenders. I wondered if you could kind of flesh that out a little bit and talk about any insight you have into when and how much the quota could be? And then, could you give us a flavor for how competitive you think the local competitors will be to compete for the tenders in China and beyond?

Jamie Samath: I would just say that, underlying demand for robotic technology in China, if you take a mid- and long-term view, is quite strong. And our experience so far has been that surgeons care about the capability and feature set of the products that they use there. Again, we don’t have any particular insight with respect to timing and size of quota. We saw the last quota we received was higher than the previous one, but we have no ability to predict that it will be larger again. So we’d love to be able to give you greater clarity than that. But what’s the second part of your question, Matt?