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Annual Report 2023 Intuitive Surgical, Inc. intuitive.com
Dear Owner, At Intuitive, we believe that minimally invasive care is life-enhancing care. Through ingenuity and intelligent technology, we expand the potential of physicians to heal without constraints. We envision a future of care that is less invasive and profoundly better, where diseases are identified early and treated quickly so patients can get back to what matters most. Looking to the future, our customers recognize the importance of high-quality minimally invasive care and acute interventions, and Intuitive is well positioned to play a key role in bringing substantive improvements to patients and to healthcare environments for years to come. A look back at 2023 The past year was a good one for Intuitive, with use of our platforms growing nicely, hospitals building additional system capacity to support that growth, and increased average utilization per system per year for each of our platforms. Here are a few highlights: In 2023, our customers used our products in more than 2.2 million procedures. Total experience on da Vinci platforms is now over 14 million procedures. This represents 22% growth in 2023. On the capital front, we placed 1,313 da Vinci multiport systems in 2023. Ion placements were 213, and da Vinci SP placements were 57 for the year. At year end, our total installed base of systems was more than 9,100, with da Vinci multiport at over 8,400, Ion at over 530, and da Vinci SP at over 170. Our 2023 revenue was approximately $7.12 billion, with 14% growth from 2022. Pro forma gross margin was 68.1% for 2023, compared with 69.2% for 2022. Recurring revenue accounted for 83% of our total revenues. We made solid strides toward our goal to help more people in more countries. Our performance in Europe and Japan was healthy, driven by balanced regional teams helping to broaden customer adoption beyond urology. At year end, we had more than 13,000 full-time employees roughly 2,000 of whom were engaged in research and development, over 5,000 in manufacturing and operations, over 4,000 in commercial and service operations, with the balance in administrative activities. Our employees are based in 30 countries around the world. Intuitive Annual Report 2023
Revenue trend (USD, in millions) $8,000 $7,000 $6,000 83% $5,000 $4,000 79% 75% $3,000 $2,000 $1,000 2016 71% 71% 71% 2017 2018 77% 72% 2019 2020 Recurring 2021 2022 2023 Nonrecurring Source: Intuitive 2023 earnings Worldwide procedure trend 13% 16% growth 22% 2,500,000 growth 2,250,000 2,000,000 1,750,000 1,500,000 1,250,000 1,000,000 750,000 500,000 250,000 2018 2019 2020 Urology 2021 Gynecology 2022 General Surgery 2023 Other 2024 guidance Source: Intuitive 2023 earnings Every year brings challenges. In 2023: Product margins were challenged because of higher-than-expected costs, primarily for our newer platforms. Throughout the year, there was considerable public and industry focus on GLP-1 medications to treat obesity. Robotic-assisted bariatric procedures grew year-over-year. However, we saw a moderation of growth throughout 2023, likely the result of patient interest in these medications as a primary treatment. In China, our customers experienced uncertainty related to a national campaign against healthcare corruption, as well as regional pricing pressures. These pressures and the continued emergence of local surgical robotics companies in China are likely to be a feature of 2024 as well. Intuitive Annual Report 2023
The problems to solve We see a continued and significant opportunity to help solve the top surgical and interventional challenges faced by healthcare systems around the world. For the past several years, we have aligned ourselves around our customers framework of the Quadruple Aim: better outcomes, better patient experiences, better care team experiences, and lower total cost-to-treat per patient episode. Our hospital customers report the following priorities as they look to 2024 and 2025: Workforce challenges remain a concern. There is a staggering shortage of trained healthcare workers in many global economies a shortage that continues to increase. We provide technology that can help reduce the total labor intensity required to manage patients through minimally invasive surgery. Said simply, higher quality care using our platforms can require fewer human resources across the care episode. Financial constraints continue to challenge hospitals. We provide customized hospital analytics that demonstrate healthy returns on investments made by our customers operating well run robotics programs. Our customers, often with our help, analyze their clinical and economic performance using realworld data to understand this benefit. As a result, they continue to standardize on Intuitive platforms. Customer Standardization Trends Phase 1 Adopt Phase 2 IDNs globally with 20+ dV systems Hospitals globally with 7+ dV systems ~22% ~48% YoY 2023 Q4 YoY 2023 Q4 Operationalize Phase 3 Standardize 20172017 20182018 20192019 20202020 20212021 20222022 20232023 20172017 20182018 20192019 20202020 20212021 20222022 20232023 Behavioral health and addiction are an increasing challenge for hospitals and care teams. With minimally invasive surgery, patients may have shorter stays and easier recovery, and surgeons report that they are able to reduce or avoid prescribing opioids. Patient safety and quality outcomes remain foundational goals for all healthcare providers. Yet, there is significant variability in patient outcomes and the skill and performance of care teams. Outstanding training and strong program analytics are core to our mission. In total, more than 76,000 surgeons and 13,000 care teams have been trained on our technology to help patients. In 2023, more than 15,000 surgeons and nearly 4,000 care teams were trained. In addition, with our footprint of 95 training centers worldwide, we can offer learning and education in close proximity to our customers. Intuitive Annual Report 2023
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ISRG Shareholder/Stockholder Letter Transcript:

Annual Report
2023
Intuitive Surgical, Inc. intuitive.com


Dear Owner,
At Intuitive, we believe that minimally invasive care is life-enhancing care.
Through ingenuity and intelligent technology, we expand the potential of
physicians to heal without constraints. We envision a future of care that is less
invasive and profoundly better, where diseases are identified early and treated
quickly so patients can get back to what matters most.
Looking to the future, our customers recognize the importance of high-quality
minimally invasive care and acute interventions, and Intuitive is well positioned
to play a key role in bringing substantive improvements to patients and to
healthcare environments for years to come.
A look back at 2023
The past year was a good one for Intuitive, with use of our platforms growing
nicely, hospitals building additional system capacity to support that growth,
and increased average utilization per system per year for each of our platforms.
Here are a few highlights:

In 2023, our customers used our products in more than 2.2 million procedures.
Total experience on da Vinci platforms is now over 14 million procedures.
This represents 22% growth in 2023.

On the capital front, we placed 1,313 da Vinci multiport systems in 2023.
Ion placements were 213, and da Vinci SP placements were 57 for the year.

At year end, our total installed base of systems was more than 9,100, with
da Vinci multiport at over 8,400, Ion at over 530, and da Vinci SP at over 170.

Our 2023 revenue was approximately $7.12 billion, with 14% growth from 2022.
Pro forma gross margin was 68.1% for 2023, compared with 69.2% for 2022.
Recurring revenue accounted for 83% of our total revenues.

We made solid strides toward our goal to help more people in more countries.
Our performance in Europe and Japan was healthy, driven by balanced
regional teams helping to broaden customer adoption beyond urology.

At year end, we had more than 13,000 full-time employees   roughly
2,000 of whom were engaged in research and development, over 5,000
in manufacturing and operations, over 4,000 in commercial and service
operations, with the balance in administrative activities. Our employees are
based in 30 countries around the world.
Intuitive Annual Report 2023

Revenue trend
(USD, in millions)
$8,000
$7,000
$6,000
83%
$5,000
$4,000
79%
75%
$3,000
$2,000
$1,000
2016
71%
71%
71%
2017
2018
77%
72%
2019
2020
Recurring
2021
2022
2023
Nonrecurring
Source: Intuitive 2023 earnings
Worldwide procedure trend
13%   16%
growth
22%
2,500,000
growth
2,250,000
2,000,000
1,750,000
1,500,000
1,250,000
1,000,000
750,000
500,000
250,000
2018
2019
2020
Urology
2021
Gynecology
2022
General Surgery
2023
Other
2024
guidance
Source: Intuitive 2023 earnings
Every year brings challenges. In 2023:
    Product margins were challenged because of higher-than-expected costs,
primarily for our newer platforms.

Throughout the year, there was considerable public and industry focus
on GLP-1 medications to treat obesity. Robotic-assisted bariatric procedures
grew year-over-year. However, we saw a moderation of growth throughout
2023, likely the result of patient interest in these medications as a
primary treatment.

In China, our customers experienced uncertainty related to a national
campaign against healthcare corruption, as well as regional pricing
pressures. These pressures and the continued emergence of local surgical
robotics companies in China are likely to be a feature of 2024 as well.
Intuitive Annual Report 2023

The problems to solve
We see a continued and significant opportunity to help solve the top surgical and
interventional challenges faced by healthcare systems around the world. For the
past several years, we have aligned ourselves around our customers    framework
of the Quadruple Aim: better outcomes, better patient experiences, better care
team experiences, and lower total cost-to-treat per patient episode. Our hospital
customers report the following priorities as they look to 2024 and 2025:

Workforce challenges remain a concern. There is a staggering shortage
of trained healthcare workers in many global economies   a shortage that
continues to increase. We provide technology that can help reduce the total
labor intensity required to manage patients through minimally invasive
surgery. Said simply, higher quality care using our platforms can require
fewer human resources across the care episode.

Financial constraints continue to challenge hospitals. We provide customized
hospital analytics that demonstrate healthy returns on investments made by
our customers operating well run robotics programs. Our customers, often
with our help, analyze their clinical and economic performance using realworld data to understand this benefit. As a result, they continue to standardize
on Intuitive platforms.
Customer Standardization Trends
Phase 1
Adopt
Phase 2
IDNs globally with
20+ dV systems
Hospitals globally with
7+ dV systems
~22%
~48%
YoY 2023 Q4
YoY 2023 Q4
Operationalize
Phase 3
Standardize
20172017
20182018
20192019
20202020
20212021
20222022
20232023
20172017
20182018
20192019
20202020
20212021
20222022
20232023

Behavioral health and addiction are an increasing challenge for hospitals
and care teams. With minimally invasive surgery, patients may have shorter
stays and easier recovery, and surgeons report that they are able to reduce
or avoid prescribing opioids.

Patient safety and quality outcomes remain foundational goals for all
healthcare providers. Yet, there is significant variability in patient outcomes
and the skill and performance of care teams. Outstanding training and
strong program analytics are core to our mission. In total, more than 76,000
surgeons and 13,000 care teams have been trained on our technology to help
patients. In 2023, more than 15,000 surgeons and nearly 4,000 care teams
were trained. In addition, with our footprint of 95 training centers worldwide,
we can offer learning and education in close proximity to our customers.
Intuitive Annual Report 2023



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