It wasn't exactly the analyst-thrashing results that we've come to expect from the purveyor of surgical robots, but it was still a pretty solid quarter for Intuitive Surgical
The company sold 86 da Vinci surgical systems during the quarter. That's not as good as the 91 it sold in the third quarter last year, but at least Intuitive Surgical is having an easier time selling to hospitals than Boston Scientific
Of those systems, 20 of them were trade-ins to a newer model. Although the upgrades don't add to the installed base, which has reached 1,308 machines worldwide, they're likely to increase the number of procedures done at the hospital, because Intuitive Surgical finds that the newer machines have a higher usage rate. Not surprising: Put a new machine into any business, and you'll probably see usage increase. Everyone likes a new toy, docs included.
Speaking of procedures, they rose by a whopping 49% year over year. As I said last quarter, that's really the key number as it drives instrument and accessory sales, which were 32% higher than the year-ago quarter. The difference has to do with surgeons being able to use fewer instruments as they become more familiar with the procedures. Still, recurring revenue, including servicing the machines, exceeded the revenue from sales of da Vinci machines, and it'll be a driving force for sales in future quarters as hospitals' capital spending increases.
Perhaps the most impressive thing about Intuitive Surgical is the amount of cash it throws off each quarter. Cash and short-term investments topped $1 billion this quarter, even after the well-timed $150 million buyback earlier this year. That's no Apple
While some would argue that's a good way to destroy a company, Intuitive Surgical doesn't have much other choice. A lack of competition means that any acquisition would divert it away from its core, which may not be in investors' best interest.
