Investor Presentation Q2 2015
Forward Looking Statement
These slides and any accompanying oral presentation by
Intuitive Surgical, Inc. contain estimates and 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 Companys Securities and Exchange Commission
filings.
Risks
Serious complications may occur in any surgery, including da
Vinci Surgery, up to and including death. Individual surgical
results may vary. Patients should talk to their doctor to
decide if da Vinci Surgery is right for them. Patients and
doctors should review all available information on non-
surgical and surgical options in order to make an informed
decision. Please also refer to
http://www.daVinciSurgery.com/Safety for Important Safety
Information.
Contents Outline
Company Overview & Business Model
Business Review
Opportunities & Catalysts for Growth
Corporate Assets & 2015
Priorities
Corporate Overview and Business Model
Corporate Overview Founded in 1995, IPO 2000
Approximately 570,000 da Vinci procedures performed in 2014, up 9% from 2013
Q115 procedures up approximately 13%
2014 Revenue - $2.13B, down 6% from 2013
Capital -24%, Recurring +5%
Q115 Non-GAAP Revenue* up 9%
3,317 da Vinci System installed base as of 3/31/15
2,254 United States, 556 Europe, 507 Rest of World
Numerous FDA and International Regulatory Clearances
Primary Markets - Urology, Gynecology, General Surgery, Cardiothoracic
. *Non-GAAP Revenue of Q114 included $25.6 million of net revenue associated with da Vinci Xi trade-out offers. Non-GAAP Revenue for Q115 was equal to GAAP revenue.
Annual Service Agreement $100K - $170K/Year 2014 Rev = $429M
da Vinci Surgical System
$0.6M - $2.5M
2014 Rev = $633M
Instruments &
Accessories
$700-$3,200
per procedure
2014 Rev $1,070M
Recurring Revenue Model
Annual Service Rev Per System
da Vinci Surgical System ASP
Inst & Accy Rev Per Procedure
2014 Range of Pricing to Meet Multiple Segments
$0.6M
$170K $100K
$3,200 $700
$2.5M
da Vinci Si-e
Single-Site
Dual Console Xi Firefly
Endowrist Vessel Sealer Stapler
Typically Benign Typically Cancer
2014: $1.5M
2014: $1,880
2014: $140K Dual Console Xi da Vinci Si-e
Includes company estimates and approximate ranges
Business Review
2014 Objectives Drive adoption in General
Surgery
Launch key new products da Vinci Xi
Increase organizational capability in direct international markets
Areas of Strength General Surgery growth
European capital and clinical performance
Clinical performance in Asia
Xi Launch
Wristed needle driver development
Challenges Stapler stop-use
US Gynecology macro-environment
Single-Site Cholecystectomy
2014 Commentary
Areas of Strength
Procedure growth U.S. general surgery, U.S. dVP macro trends, and international
Stapler U.S.: Resumed shipping Si version and launched Xi version
Europe: Obtained CE Mark status for Si and Xi versions
Received da Vinci Xi clearance in Japan
Challenges
Gross margin pressure Fx headwinds; new product costs
Q1 2015 Commentary
Annual Worldwide Procedures
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2009 2010 2011 2012 2013 2014 2015
Urology Gynecology General Surgery Other
Company Estimates
2015 Guidance: 8-11% Growth 2014:
9% Growth
Company estimates
U.S. Urology Procedures
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2006 2007 2008 2009 2010 2011 2012* 2013 2014
Prostate Kidney Other
Company estimates
* U.S. Preventive Services Task Force Recommends Against PSA testing 5/2012
050,000
100,000
150,000
200,000
250,000
2009 2010 2011 2012 2013 2014
Benign Hysterectomy Malignant Hysterectomy Other
U.S. Gynecology Procedures
Company estimates
U.S. General Surgery Procedures
0
20,000
40,000
60,000
80,000
100,000
120,000
2009 2010 2011 2012 2013 2014
Upper GI / HPB Lower GI / Colorectal Other
Company estimates
2014 Revenue - $641M, up from $639M in 2013
30% of 2014 total revenue
Approximately 121,000 procedures performed in 2014, up 20% from 2013; Q1 2015 up 22%
Strength in EU Systems and Procedures
Strength in Asia Procedures
Significant investments supporting long term growth
Japan: Transition to direct sales structure, clinical trials, organizational growth
Europe: Sales coverage, clinical data and analysis
International Performance
OUS Annual Procedures
Company Estimates
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2009 2010 2011 2012 2013 2014
Europe Asia Rest of World
Company estimates
da Vinci Xi
Designed for multi-quadrant surgical access
Narrower arms with greater reach
Lighter, slimmer endoscopes that can move between ports
Computer assisted, streamlined set up
Compatible surgical simulator
Why Xi Matters
Despite my obvious interest in minimally invasive surgery I had resisted adopting previous da Vinci platforms because of what I felt were limitations. The da Vinci Xi platform is a game changer for me. I now feel that this technology will not just equal my standard laparoscopic abilities but actually will allow me to reach new levels in providing surgical care to my patients.
B. Harkins, MD, FACS General Surgeon, Texas
System Placement Trend
0
20
40
60
80
100
120
140
160
180
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2013 2014 2015
U.S. Europe Japan Rest-of-World
System Mix Trend
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q114 Q214 Q314 Q414 Q115
U.S. System Mix
S / Sie Si Xi
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q114 Q214 Q314 Q414 Q115
Europe System Mix
S / Sie Si Xi
Europe
556
USA
2,254
Australia/New
Zealand 34
Japan 194
South Korea 50
China 46
India 29
Taiwan 25
Singapore 7
Thailand 6
Other 8
Installs by Country and Region
Saudi Arabia 13
Israel 7
Qatar 6
Other 9
Middle
East
35
Brazil 15
Mexico 7
Argentina 5
Chile 5
Other 12
Latin
America
44
Denmark 15
Norway 11
Czech Republic 7
Austria 6
Finland 5
Ireland 3
Other 4
Distribution
Italy 81
Spain 30
Turkey 33
Russia 25
Greece 9
Romania 6
Other 9
Direct
France 86
Germany 74
UK 48
Belgium 33
Switzerland 27
Sweden 24
Netherlands 20
Asia
365
Canada 25
Intuitive sells directly to customers in the US, Korea, and the European countries indicated above. In June 2014 direct sales rights were obtained in Japan. Sales are through distributor partners in all other areas of the world including, Canada, Latin America, the Middle East, Asia and Australia.
South Africa 4
da Vinci System Installed Base
Trended da Vinci System Installed Base
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q110 Q111 Q112 Q113 Q114 Q115
United States
International
Opportunities and Catalysts for Growth
Open Surgery Remains Common U.S.
Source: ISI data as well as estimates
Yr: 2004
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prostate MalignantHyst
Benign Hyst
Robotic Other MIS Open
Open Surgery Remains Common U.S.
Source: ISI data as well as estimates
Yr: 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prostate MalignantHyst
Benign Hyst Colorectal VentralHernia
Thoracic
Robotic Other MIS Open
Open Surgery Remains Common OUS
Source: ISI data as well as estimates. OUS defined as Western Europe, Canada, Australia, South Korea and Japan
Yr: 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prostate MalignantHyst
Colorectal Gastrectomy Thoracic
Other MIS Robotic Open
Total Procedure Markets
We estimate 2 4 million procedures available for products on the market today in countries for which we have clearances
Over time, opportunity OUS will be greater than U.S.
Roughly half of opportunity based on underlying cancer as cause
Clinical and Economic Validation Overview of the Database
To date, there are approximately 8,500 peer-reviewed clinical publications studying da Vinci use
Approximately 99% of these studies are independent of ISI
Of these, approximately 1,400 are comparative studies
In 2014, 1,600 new studies were published, of which ~400 were comparative
There are now approximately 25 government sponsored assessments of da Vinci surgery spanning ~14 countries
Which is the right comparison?
Populations Matter (e.g., Rectal Resection)
Laparoscopy
Open Surgery
da Vinci LAR
Mar
ket
Shar
e %
MIS Surgeon Perspective dV vs Lap }
Patient Perspective Open vs MIS }
Areas of Investment in Clinical and Economic Analyses
U.S. Hernia registry, Gynecologic Oncology registry
Japan Urology and General Surgery
Germany Urology and General Surgery
U.K. Colorectal registry
France Colorectal registry
Numerous economic studies
ISI Investments to Improve Surgery
Advanced imaging (e.g., Firefly Fluorescence Imaging)
Computer-enhanced precision at tissue (e.g., Smart-clamp for stapling)
Less invasive access (e.g., single-port and natural orifice surgery)
Training technologies (e.g., simulation, dual-console, setup assist)
Product Milestones
Continue da Vinci Xi Product Launch:
Xi Vessel Sealer launched Q2 14
Xi Firefly launched Q3 14
Clearance in Korea Q4 14
Xi Stapler launch Q1 15
Clearance in Japan End of Q1 15
Xi Table motion submission Q3 15
Xi Single-Site submission H2 15
Single-Site wristed needle driver for Si launched Q4 14
Integration of da Vinci Sp Current Xi Configuration
Deliver technical milestones in 2015 Initiate customer evaluations
Integration of da Vinci Sp Xi with Sp Patient Cart and Instruments
Deliver technical milestones in 2015 Initiate customer evaluations
2015 Priorities and
Corporate Assets
Extraordinary people
3,317 da Vinci System installed base 3/31/15
Numerous FDA and international regulatory clearances
Extensive instrument and accessory product line
Intuitive Surgical training centers worldwide
Ownership of or exclusive rights to over 1,750 U.S. and foreign patents and more than 1,500 US and foreign
patent applications
da Vinci patient awareness
Corporate Assets
2015 Priorities
Drive adoption of colorectal surgery and hernia repair
Complete da Vinci Xi launch additional products and international markets; reduce product costs
Develop market and organizational capabilities in EU and Asia
Initiate customer learning on da Vinci Sp