Intuitive Surgical Inc (NASDAQ:ISRG) Q2 2016 Earnings Conference Call - Final Transcript

Nov 07, 2015 • 07:00 pm ET


Intuitive Surgical Inc (NASDAQ:ISRG) Q2 2016 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Intuitive Surgical Q2 2016 Earnings Release Call. At this time, all participants are in a listen-only. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Calvin Darling, Senior Director of Finance, Investor Relations of Intuitive Surgical. Please go ahead, sir.

Calvin Darling

Thank you. Good afternoon, and welcome to Intuitive Surgical's second quarter earnings conference call. With me today we have Gary Guthart, our President and CEO, Marshall Mohr, our Chief Financial Officer, and Patrick Clingan, Vice President of Finance and Sales Operations.

Before we begin, I would like to inform you that comments mentioned on today's call may be deemed to contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in the company's Securities and Exchange Commission filings, including our most recent Form 10-K filed on February 2, 2016, and 10-Q filed on April 19, 2016. These filings can be found through our website or at the SEC's EDGAR database. Prospective investors are cautioned not to place undue reliance on such forward-looking statements.

Please note that this conference call will be available for audio replay on our website at on the Audio Archive section under our Investor Relations page. In addition, today's press release and supplementary financial data tables have been posted to our website.

Today's format will consist of providing you with highlights of our second quarter results as described in our press release announced earlier today followed by a question-and-answer session. Gary will present the quarter's business and operational highlights, Marshall will provide a review of our second quarter financial results, Patrick will discuss marketing and clinical highlights, then I will provide our updated financial outlook for 2016. And finally, we will host a question-and-answer session.

With that, I'll turn it over to Gary.

Gary Guthart

Good afternoon and thank you for joining us on the call today. In the second quarter our company performance was strong, highlighted by sustained procedure growth across multiple geographies, improved margins and continued customer preference for our new products.

Turning first to procedures, global procedure growth for the quarter was nearly 16% with prior quarter trends continuing. Drivers of growth included US general surgery, growth in the use of da Vinci surgical systems outside the United States and modest growth in US urology and gynecology. Inguinal hernia repair and ventral hernia repair growth remains strong, and growth in colorectal surgery was solid.

Procedure growth was variable by country in Europe, with accelerating growth in Germany. Both the Nordics and France experienced modest improvement relative to Q1 growth rates. In the U.K., growth decelerated slightly from Q1. In Asia, procedure growth in Japan was solid again in the quarter while growth in Korea was robust and accelerated over Q1 growth rate. Growth in procedures in China was also strong. Patrick will