Intuitive Surgical Q4 Earnings Beat Street, Expects Lower Gross Margin In FY22

Intuitive Surgical Inc ISRG reported Q4 adjusted EPS of $1.30, slightly ahead of the consensus of $1.28.

• It reported revenues of $1.55 billion, +17% Y/Y, marginally ahead of Wall Street estimate of $1.52 billion, consistent with the preliminary results posted earlier this month.
• The sales growth was driven by growth in da Vinci procedure volume and system placements.
• Worldwide da Vinci procedures increased approximately 19% Y/Y, driven primarily by growth in U.S. general surgery procedures and growth in OUS markets.
• The company held $8.6 billion in cash and equivalents at the end of Q4.
• According to the Q4 conference call, the Q4 system average selling prices were $1.45 million, similar to $1.43 million last year and lower than $1.57 million last quarter. 
• Instrument and accessory revenue per procedure were approximately $1,940 per procedure compared with $1,900 per procedure in Q3 FY21 and down 6% from $2,060 realized a year ago.
• Pro forma gross margin of 70.1% was lower than 71.3% in Q3 FY21, primarily due to manufacturing inefficiencies and higher logistics costs, lower system ASPs, and a higher mix of systems revenue. 
• Guidance: During 2022, Intuitive Surgical anticipates procedure growth of 11% - 15%, the lower end of the range assumes ongoing COVID pressure and hospital staffing shortages.
• The company expects a slightly lower gross profit margin in FY22 than 71.2% in FY21, reflecting higher fixed costs and the impact of higher supply chain costs.
• Price Action: ISRG shares are down 5.03% at $278.00 during the premarket session on the last check Friday.