Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Intuitive da Vinci 5 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, CEO for Intuitive Surgical, Mr. Gary Guthart. Please go ahead.

Gary Guthart: Good morning and welcome to our call introducing Intuitive's fifth generation robotic system, da Vinci 5. Before we begin, I'd like to inform you that the 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 our Securities and Exchange Commission filings, including our most recent Form 10-K filed on January 31, 2024. Our SEC filings can be found on our website or at SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements. Joining me today are Dave Rosa, Intuitive's President; Dr. Myriam Curet, our Chief Medical Officer; and Jamie Samath, Chief Financial Officer. Today, we'll provide you with an overview of da Vinci 5, also described in our news release issued on Thursday, March 14. We plan to have da Vinci 5 at trade shows throughout the year, including the upcoming SAGES Conference in Cleveland, where attendees will have the opportunity to see da Vinci 5 and speak with our teams in person. Today's format will be as follows: Dave will take us through da Vinci 5's distinguishing features and how da Vinci 5 fits in our portfolio. Myriam will take us through our da Vinci 5 cleared indications and how we think about da Vinci 5's clinical and operational benefits for our customers and their patients. And Jamie will take you through how our launch plans for da Vinci 5 could impact our finances in 2024, followed by a question-and-answer session. I'm now pleased to turn the call over to our President, Dave Rosa.

Dave Rosa: Thank you for joining us on the call today. We're delighted to introduce our next generation multi-port platform, da Vinci 5. Today, we'll provide you with a high-level introduction, along with additional information as we begin our phased U.S. launch. To begin, I'd like to go back to what drives Intuitive and our work. We design our products and services to improve patient outcomes, improve the patient and care team experiences and lower the total cost to treat. Our customers call this the quadruple aim and we use this as our North Star in guiding our actions. After more than a decade of research, development and testing, we believe da Vinci 5 will deliver on these aims. As you may have seen on our website, da Vinci 5 was similar to Xi, that builds on Xi's highly functional design which has been used around the world in more than 7 million procedures. da Vinci 5 incorporates more than 150 design enhancements, including several standout innovations that we believe will drive the future of robotic-assisted surgery and provides significant benefits for surgeons, care teams, their patients and hospitals. First, da Vinci 5 takes surgical precision to a new level. The system is designed with next-generation surgeon controllers and patient side manipulators with additional sensors. This combination translates to super smooth, low resistance and highly precise motion at both slow speeds and high speeds. Unwanted tremor and vibration filtration is the best we've ever brought to market. Second, da Vinci 5 has our highest quality and most natural 3D surgical imaging system we've developed to date. It is built with additional capabilities to support future generations of surgical endoscopes and vision software. Third, we are bringing to market something that our customers and the surgical robotics community have been pursuing for more than 2 decades, highly sensitive force-sensing and first of its kind Force Feedback technology. Using force sensors built into the instrument, we can accurately measure force exerted on tissue in real time during surgery, then using sophisticated algorithms and computing. We reflect those measured forces back into the hands of the surgeon through the surgeon controllers. Fourth, in pursuit of more efficient workflow and greater surgeon autonomy, we've integrated a high-performance insufflator, our next-generation electrosurgical unit and optimize the user interface of da Vinci 5. Fifth, our design of da Vinci 5 prioritize the often undervalued area of ergonomics. The surgeon's console allows for a broad range of surgeon postures, thus providing less physical strain to the surgeon during the operation. For the care team, their controls are placed in easy to reach locations. Finally, da Vinci 5's computational core has 10,000x the computing power of our fourth generation systems. This computing power support natural and seamless digital experiences now and in the future, including integration with our My Intuitive app, our virtual reality simulator SimNow, our computational observer Case Insights and our edge computing system, Intuitive Hub. da Vinci 5 is the latest addition to the da Vinci portfolio and alongside da Vinci X, da Vinci Xi and our single-port platform, da Vinci SP, it offers surgeons and hospitals their choice of highly capable proven solutions from Intuitive. I will now turn the time over to Myriam to take you through why these changes matter for surgeons, care teams, their patients and hospitals.

Myriam Curet: Thank you, Dave. We are happy to report that FDA has cleared da Vinci 5 for the same indications as da Vinci Xi, except for cardiac and pediatric indications. Additionally, the Force Feedback needle driver which is optional for use of da Vinci 5 is contraindicated for use in suturing in hysterectomy and myomectomy procedures. This means that surgeons can perform clinical cases across a broad spectrum of procedures. I'd like to talk first about da Vinci 5's Force Feedback technology. We believe this is ground-breaking for robotic surgery. In preclinical testing, surgeons who use the Force Feedback instruments on da Vinci 5 exerted significantly less force on tissue which could translate into left to trauma during surgery when compared to da Vinci Xi. With our customers, we intend to study how this will translate to real world clinical and patient-reported outcomes, as surgeons of all experience levels use the technology in a broad range of procedures. We believe that the ability to measure force during robotic surgery adds an important new data stream to surgical data science. Our insights engine will incorporate real-time surgical force measurements, along with the surgical data it currently collects, to build analytical insights for surgeons and care teams. Another important set of innovations Dave mentioned are design improvements to surgeon autonomy and workflow efficiencies. Taken together, these will continue to streamline the workflow in the OR and potentially save valuable time during certain procedures. During our clinical work and clinical trials, we saw preliminary evidence that procedures done with da Vinci 5 may take less time to complete compared to cases done with da Vinci Xi. Faster cases that don't compromise patient safety allow for more efficient use of precious human and capital resources at the hospital and should be well appreciated by our customers. We look forward to learning more through real-world evidence. Ergonomics are often undervalued and underappreciated by the broader health care community. Musculoskeletal problems, repetitive motion issues and fatigue can impact surgeon longevity and we are all aware of the increasing need for surgeons around the world. Intuitive continues our commitment to improving ergonomics with da Vinci 5, to enhancements that could improve care team satisfaction and enable higher productivity during a single operative day and over a career. I'll now turn the time over to Jamie to take you through financial implication.

Jamie Samath: Good morning. I will provide additional details regarding the expected financial impact of the da Vinci 5 launch. Please note that on this call, we are not updating or reaffirming the financial outlook we provided on our last earnings call on January 23, 2024. As always, we will provide more detailed information during our Q1 2024 earnings call in April. With respect to pricing, we expect the gross system ASPs for da Vinci 5 will be approximately 30% higher than Xi. da Vinci 5 integrates or will integrate several items that customers generally purchase separately with da Vinci Xi, specifically table motion, insufflation, hub, simulation, first access camera and the E-200 generator. On a like-for-like basis, when considering the full stack of integrated items, a customer's total acquisition cost is approximately 15% higher for da Vinci 5 as compared to Xi. With respect to modeling. As a reminder, reported system ASPs are calculated using only purchase transactions. da Vinci 5 will be launched in the U.S. first. Please note that in 2023, approximately 70% of systems placed in the U.S. were under operating lease arrangements. While the proportion of systems placed under operating lease arrangements may fluctuate from quarter-to-quarter, we expect that in the U.S. and globally, the proportion of systems placed under these arrangements will grow over time. At launch, 6 core instruments for da Vinci 5 will be available with Force Feedback capability. Based on typical instrument choreographies, if Force Feedback instruments were used in every procedure, the weighted average impact to I&A per procedure for da Vinci 5 would be an increase of approximately 9% as compared to Xi. However, it is unlikely the Force Feedback instruments will be adopted in every procedure and by every surgeon and therefore, the actual impact on I&A per procedure will depend on the rate and degree of adoption which will evolve over time. Given the complexity of Force Feedback instruments at launch, gross margins will be significantly below the corporate average. We plan to improve these margins over a multiyear period. We believe, over the long term, that the potential for improved interoperative efficiency and higher procedure throughput using da Vinci 5 provide customers the opportunity to achieve a lower total cost to treat per patient episode compared to Xi. Over time, we plan to and also expect our customers, to generate data that supports our belief that da Vinci 5 can improve time to proficiency for new surgeons adopting robotics and that the da Vinci platform can improve clinical outcomes. If and as this data is generated, the economic benefits of da Vinci 5 for customers will increase. In addition to the integrations referenced earlier, da Vinci 5 will come with 1 year free access to our machine learning-based computational observer technology, Case Insights, providing surgeons the opportunity to review objective performance indicators alongside surgical video for critical steps of a procedure. At the 1-year anniversary of system acquisition, customers have the option to continue to use Case Insights on a subscription basis. Revenue generated from Case Insights will be reflected in service revenue and is not expected to be significant in the near term. We are planning for a limited launch starting in the U.S., as we optimize manufacturing and supply chains and progressively expand our manufacturing capacity. We expect to be in this limited launch phase into 2025. During this period, we will be focused on customers that collaborated with us during the development period and those customers who have mature robotic programs and have a need to expand capacity. We do not expect a significant number of trade-ins during the limited launch period, given constrained supply. For those customers who have a need to expand capacity but limited availability during the first phase of launch prevents them from acquiring da Vinci 5, we will offer the option to acquire Xi in an arrangement that includes an upgrade right. Purchase arrangements for Xi that include these rights will result in a deferral of a portion of the purchase price. Looking ahead to broad launch, in the first several years of the trading cycle, we expect net system ASPs for da Vinci 5 that involve a trade-in of Xi to reflect trading credits that are significantly higher than those received in recent periods for an Xi. As we described in our last earnings call and consistent with our historical experience, we expect that da Vinci 5 system and Force Feedback instruments will start at lower gross margins and rise over a multiyear period as we build volume and optimize design, manufacturing and supply chains. That concludes our prepared comments. We would now -- we will now open the call to your questions. Greg, if you could proceed.

Operator: [Operator Instructions] Your first question comes from the line of Travis Steed from Bank of America.

Travis Steed: Congrats on the approval. Maybe just a big picture question to start out. Maybe just talk about big picture, what this does for the operating room, kind of the ability to save costs in the OR and think about utilization per procedure, Historically, it's been 5% per year. Kind of what does dV5 [ph] do for that longer term? And when can you actually start thinking about proving clinical values and driving robotic surgery to kind of standard of care? And I don't know if there's anything on this robot that you think could open up new procedures over time but I'd love to hear about that as well.

Gary Guthart: So, Jamie, why don't you kick us off a little bit on kind of framing and then I'll ask Myriam to step in and talk about the experience in the OR.

Jamie Samath: Yes. Just if we look at the -- our experience in the IDA, the clinical trial and work in our labs, we do see early indications that da Vinci 5 can potentially shorten case times which, in turn, can then possibly allow hospitals to save on staffing costs and increase throughput. Obviously, we have to work with customers to validate this over time. As we said in the prepared remarks, we also see the potential to improve the time for new surgeons to become proficient robot users and the potential to improve clinical outcomes. That's going to require evidence to support but both opportunities also improve customer economics. So there's some time for us to work through that, Travis and obviously demonstrate that validation with our customers.

Myriam Curet: Yes, I would agree with what Jamie said. We think there's potential to increase throughput and efficiency, having surgeon autonomy so the surgeon can move forward more quickly with the change that they want to make in the OR as opposed to waiting for their nursing staff to get free and go over and do it. I think we'll also increase throughput.

Gary Guthart: As you think about -- you had asked the question of what does it do to patient populations that we may have able to help. Same clinical indications as the Xi but for the exceptions that Myriam noted in the script. We do think that it will invite some surgeons in that perhaps have been waiting. We also know that it helps care teams -- half a system that's a little bit easier to use. So those 2 things, I think, may give us access to greater depth of penetration over time, remains to be proven. Additionally, we think we'll pursue additional indications in future years. We're not ready to talk to you about what those are. But for a starting point, we think we go deeper in the procedure categories that we're already in.

Travis Steed: Great. And just a quick follow-up, maybe what you need to kind of move into the full launch here? And is it more manufacturing, gaining capacity? And do you expect full launch in '24 or '25?

Dave Rosa: Yes. So this is Dave, Travis. We're planning a phased launch into '25. So we're going to gather early feedback from customers, mature our supply chain and manufacture processes and we'll continue to expand our manufacturing capacity and that will get us into broad launch.

Operator: Your next question comes from the line of Larry Biegelsen from Wells Fargo.

Larry Biegelsen: Congratulations. So Gary, the press release talked about continuing to innovate on da Vinci 5 and Xi. So can you talk about how you see co-positioning da Vinci 5 and Xi in the market and how you can leverage the large number of refurbished Xis, I assume you'll have over the next few years.

Gary Guthart: Thank you. Dave, I'll let you take that one.

Dave Rosa: Yes. So da Vinci 5 will live alongside Xi. It will be -- take the top position in our portfolio. And so it will be da Vinci 5, da Vinci Xi and da Vinci X at a variety of price points within that portfolio. And the second part?

Gary Guthart: With regard to what happens to Xi as da Vinci 5 comes and somebody trades in an Xi, what happens?

Dave Rosa: Yes. Given the limited availability at the beginning, it's unlikely we're going to see very many excise. But over time, it is definitely likely that we'll have some Xis for refurbs in the future.

Gary Guthart: We think the Xi gives us an opportunity to rotate into other sites of care or into how the cost-sensitive markets with a really capable machine. So we think the Xi research base is going to be a nice asset for the company.

Larry Biegelsen: That's helpful. Jamie, on the Q4 call, you said the Xi ramp was not a good analog. Why is added -- how would you have us think about the rollout of da Vinci 5 once you do hit the full market release?

Jamie Samath: Yes, I'd just say in terms of the trade cycle overall, I think it's too early for us to provide an indication. I think we'd like to get into the marketplace and get feedback from customers and obviously work through the limited launch period. Our overall footprint is obviously much larger. The dependency on Intuitive is significant relative to 2014 when we launched Xi. And as of the end of last year, we had just over 2,200 systems under operating lease arrangements that, if you hold everything else equal, provides an easy upgrade path for some customers. Xi is a highly capable system and we'll continue to have a place in the portfolio. In the end, I think what customers will choose to do will be a function of their institutions objectives and them understanding the relative value of da Vinci 5 compared to Xi. So I think we're in quite a different place relative to both our position in hospitals. The operating lease dynamics are quite different and you have the price premium, where customers have to absorb that compared to relative value.

Operator: Your next question comes from the line of Robbie Marcus from JPMorgan.

Robbie Marcus: Great. And I'll also add my congratulations on the robotic approval. I wanted to ask, there were a number of new features like insufflation and cameras and I'm sure a number of others that used to be third-party add-ons that you're now bringing in-house. How do you think about Intuitive Surgical, taking these in-house? I would imagine you think you could do it better. And how does that add to the procedure revenues that you can see?

Gary Guthart: Sorry about that. I'm interrupting you. Do you want to finish, Robbie? Apologies.

Robbie Marcus: No, I was all done. Go ahead.

Gary Guthart: Dave, why don't you take the, how do we think about what we bring in. And Jamie, you might speak to what that does to revenue.

Dave Rosa: Yes. So on some of the items that you discussed insufflation, a third-party camera, we bring those in, where I see -- I think there are 2 reasons. One is around these workflows and efficiencies in the OR, where the integration can add to just the overall care team experience. And the second one is those are -- may become important data streams in the future for -- to be part of the overall insights that we're looking at, during cases that may bring sort of actionable data to the care teams as a whole. And so as we look across our ecosystem of portfolio, that's where I think we have prioritized adding it those types of accessories and products.

Jamie Samath: Robot to robot Xi to da Vinci 5, as we said in the prepared remarks, is about a 30% difference in ASP. But on the full stack, it's about 15% difference in ASP. The only trick in the modeling is not every customer that purchased Xi bought that full integrated stack. And so you kind of have a blended average between that 15% and that 30%. It's in systems revenue and reflected in systems ASP.

Gary Guthart: Anything in the I&A pull-through from the inflator or the scope? Is there anything that you would?

Jamie Samath: Not as significant, I would call out.

Gary Guthart: Okay.

Robbie Marcus: Great. And I appreciate that. Maybe just a quick follow-up. You talked about there's a great resell opportunity for Xi and potentially X, how do we think about the price change for those 2 robots? And you mentioned several contraindications for Xi, how do we think about those more broadly?

Gary Guthart: I'll send to Jamie, the question on pricing and to Myriam, just a quick discussion on what the differences are in indications between dV5 and Xi.

Jamie Samath: There's no initial pricing change on Xi. And as Dave described, it will take some time before we have a refurbished Xi, not going to be specific yet. It's too early to say what that price point and strategy may be. But as Gary described, it gives us an opportunity from a segmentation perspective to address more constant and sensitive segments or geographies.

Myriam Curet: Yes. In terms of contraindications, the contraindications for the Force Feedback needle driver specifically for hysterectomy and myomectomy. Those surgeons can still use the non-Force Feedback instruments, so we don't think that, that will impact adoption of dV5. We are going to pursue removing the contraindication and we'll discuss how to do that with the FDA.

Operator: Your next question comes from the line of Rick Wise from Stifel.

Rick Wise: I'll offer my congratulations as well, very exciting. Two questions I'll ask, both upfront. I was hoping, Jamie, you could help us better -- just at a high level, think through the margin impact of everything. On the one hand, you've got a limited or a stage phase Gen 5 launch and offset by the -- or including the still to be made more efficient supply chain and everything. On the other hand, volumes are growing, efficiency programs continue. At a high level, how do we think about these margin impacts? Do we assume in a general sense that you stay at sort of 2023 [ph] levels despite some of these limited impacts in '24? And how long does it take? Does this take 1 year, 3 years to get back to whatever baseline you would point us to? And my second question, I'll just go ahead and ask now really, maybe for you, Gary, just from a more visionary perspective, what -- where does da Vinci 5 take us? Does it unlock things like how surgery or some next big thing that over the next 3, 5, 10 years is going to have an even more dramatic impact on robotic adoption in a positive sense? I'll let you think about that while Jamie.

Jamie Samath: Yes. As is typical and as we said, Rick, the gross margins will be below corporate average and below our target. Back on the January earnings call, the gross margin guidance that we provided at the time contemplated what we expected with respect to the impact of da Vinci 5 amongst another -- amongst series of other factors impacting gross margin. It's important to note we're launching in the U.S. first, a significant portion of those placements have been and we expect to continue to be under operating lease arrangements. So for that portion of the placements of da Vinci 5, they obviously get spread over the term of the lease arrangement and therefore, impact over a multiyear period. With respect to improving gross margins, our experience has been and we expect it to be similar with respect to da Vinci 5, it will take us several years to kind of optimize manufacturing and the supply chain and get our cost to target.

Gary Guthart: On the -- why do we think it matters side, kind of longer term, I think there's a few things. My -- look out 2 decades and I don't think we'll be talking about this kind of thing is robotic-assisted surgery, I think it's just going to be surgery. And I think if you zoom out and say, great sophisticated technology tools well integrated into the operating room should be ubiquitous. And we think this is a step on that journey. I don't think most surgeons care about the word robots and I don't think patients care about robots, nor should they. I think this is about how do you make really high-quality surgery ubiquitous. How do you make it easier for care teams to become proficient quickly and in a data-driven way. There's an opportunity here and one of the big steps forward in da Vinci 5 is really setting up surgical data science, the ability to have integrated high-quality synchronized data that allows a computation, plus sharp care teams to make really good decisions about what they're doing and how to improve. And I think if we do that in a way that lowers the total cost to treat per patient episode so that it's self-financing for the health care systems, I think we drive down that journey. That is the ethos behind da Vinci 5. I think it's another step. It's not the last step. It's just the next step. And I think it's going to get us there.

Operator: Your next question comes from the line of Adam Maeder from Piper Sandler.

Adam Maeder: Congratulations. I wanted to start on the Force Feedback feature which certainly seems like a big step forward. It sounds like the preclinical data is encouraging and that you will look to further validate this in studies or clinical trial work. Does that mean prospective clinical trials? And then, I guess, in terms of adoption, I think I heard the comment, not likely adopted in every case. Can you maybe talk about which cases specifically that you think customers are likely to use Force Feedback instruments versus more standard technology? And then I have a follow-up.

Myriam Curet: Yes. In terms of clinical evidence, we will do both prospective and retrospective studies. And then as the usage gets large enough, we'll use database studies as well. So there's an adoption curve to clinical evidence, just like there's a procedure adoption curve and we will follow that. It's very clear that there's significant value in using the Force Feedback needle driver. So we believe that, that will be used in suturing steps of procedure. But there's also significant use in retraction and getting that Force Feedback information on the force being applied to tissue. So we think in those steps of the operation or operations where those steps are needed, that it will be used there. Some of it will depend on the surgeon and how much the surgeon wants to get that information during the procedure. And that's where I think the variability will come.

Gary Guthart: I think if I can jump in a little. I think Force Feedback will generate debate. And I think it's going to be a healthy debate. There will be some surgeons, particularly very experienced surgeons who say, I can see forces. I can use visual haptics. I think Intuitive coined that term a couple of decades ago but we understand. But even when we observe those surgeons in the lab, highly experienced surgeons, when Force Feedback is on versus off, there's a different amount of force that gets transitioned or transmitted to the tissue. So I think we're going to have to see as we go through it. The clinical impact, what does the patient benefit and experience of that change in force will be a subject to a study that I think is going to be exciting to see. And I think the premise or the framing of your question is right. In some procedures, it will likely add more value than other procedures and we will see over time. So this will be an area of debate. I think it's good debate. It's healthy debate and we're excited to see where we and our customers go with it.

Adam Maeder: Maybe for the follow-up, a specific technology question on the insufflator. I think I heard you refer to that as a high-performance insufflator. Is this a low-pressure system? How low can the pressure go? Is it a valveless technology? And lastly, is this an open ecosystem with dV5 or do they have to use specifically the Intuitive insufflator?

Gary Guthart: Yes. So it has -- it is an insufflator that has some lower pressure capabilities. It also has integrated smoke evacuation that is automatically sensed and actuated with the system and with energy application. And it is -- although comes with da Vinci 5, it is not required that the care team use this particular insufflator. They can use one they've already purchased.

Operator: Your next question comes from the line of Brandon Vazquez from William Blair.

Brandon Vazquez: Congrats. On the -- one of the more interesting updates I saw was the improvement in processing power up to 10,000 more or x more processing power. I guess the question is, at launch, I assume you're not going to be fully utilizing that power. What can you use that processing power in the future? And what's kind of like the time line of development for some of those new features?

Gary Guthart: Yes, you're right. So the 10,000x compute power increase over Xi, it does support a lot of our foundational innovation that we described in our prepared remarks and it supports this expanding digital ecosystem that we discussed with simulator and hub and other aspects. And it will support future features, future integrations such as, for example, better integration of pre-optive images as we bring those into the surgical field and so it sets us up for our teams, our innovation teams internally to make a lot of progress over the coming years.

Brandon Vazquez: Okay, great. And maybe one quick follow-up as maybe a little bit of clarification. I know you guys aren't updating or -- the guidance for the year but maybe as a question of clarification on the guidance you previously provided, was da Vinci 5 launch already contemplated in that prior guidance?

Jamie Samath: Well, we didn't guide system [ph] but in the rest of the elements of guidance at that time, yes, it reflected our best estimates of the impact to da Vinci 5.

Operator: Your next question comes from the line of Drew Ranieri from Morgan Stanley.

Drew Ranieri: Just -- you had on throughput and workflow efficiencies a bit but can you just maybe help us better understand how your hospital customers, the few that have used the da Vinci 5 system, might be thinking about adding da Vinci 5 or more Xis to do 24-hour surgery, emergency access. And really, how are you thinking about the penetration opportunity within general surgery from here? Does this kind of get you into more of the applicable market? Or does this get you into some of the procedures that might not have been applicable yet for robotics? And I have a follow-up.

Jamie Samath: It's early in the process. As we said in the prepared remarks, our first focus is on those customers that helped us in the development process. So they have some familiarity with da Vinci 5's capability. And so I think that factors into their purchase decision. The other set of customers we focus on are those that have relatively large fleet sophisticated programs. They understand the economics and clinical value very clearly. And it's really going to be a function of those institutions relative priorities and the characteristics of the institution. Obviously, our sales force is excited to engage with customers on da Vinci 5 and expose customers to the relative differences in value. But I think Xi is a highly capable system and I think we're really excited about the potential for da Vinci 5 but too early to say beyond that.

Gary Guthart: You had touched on the emergency surgery or short scheduled surgery and we're starting to see the growth of that on X and XI. da Vinci 5 may help that, especially if it's easy to learn and has better throughput over time. Myriam, I don't know if you want to add any color to that?

Myriam Curet: And I think, again, the ability for the surgeon to be more autonomous, means he or she is less dependent on the expertise of the care team and after-hours care team have to do a larger breadth of procedures, so they may not know as much in depth. So I think that's where da Vinci 5 can really bring value.

Drew Ranieri: Got it. And I know that we're focused on dV5 today but just with SP in general, are there any plans to include some of these system enhancements in SP or next generation as you're thinking about broader market capabilities or international there?

Gary Guthart: Yes. So da Vinci 5 has a lot of innovations. And as we look across our portfolio, SP included, we'll look for opportunities to leverage some of those innovations into our other platforms in the future. We're excited to do so.

Operator: Your next question comes from the line of Shagun Singh from RBC.

Shagun Singh: I wanted to get a little bit more color on the near-term pause. Can you just walk us through why customers would want to purchase and be trained and will inventory required for Xi, when da Vinci 5 will be available in a few quarters. I know you indicated that you would offer future trade-in rights and then upgrading for the discount. But perhaps, can you elaborate and help us understand how we should think about system placement headwinds in the near term? And then with respect to my second question, I was just wondering if you can share a little bit about how you think the adoption cycle might look like, with the appetite is not only from surgeons but hospital systems and where we are in the broader adoption cycle for robotics?

Gary Guthart: Yes. On the first one of how do customers look at Xi and da Vinci 5 together as da Vinci 5 is in a limited launch, a lot of -- certainly in more mature company -- countries, a lot of customers are building capacity. And I think the thought process for them is, do I wait and remain capacity constrained or do I lease or build a usage-based arrangement on an Xi to keep building capability and then bring in a da Vinci 5 when they can. So I think in countries that are really capacity constrained, we have options for hospitals to do this in a way that's really smooth. Remember that almost all of the instruments and accessories on da Vinci Xi and X, are still usable on da Vinci 5. So that gives them some flexibility. If you're in a country that's really early and people are looking at buying their first system, they may wait. So there may be some headwinds here, where if they only have one to buy, it isn't a capacity issue. They may wait a little bit. On the other hand, the same offer can be available to them, make it easy for them to get started. Myriam, perhaps you can talk for a minute about kind of training efficiencies from one to the other, how hard training is, if you're trained on Xi and the move to da Vinci 5, is that an easy journey or a hard journey?

Myriam Curet: Yes. What we found in our IDE studies and in our preclinical study labs, is that for a user who's experienced on Xi, the delta training rapid and actually can be done at the hospital. There is no need to come to one of our training facilities. For surgeons who are new to robotics who are going to learn on dV5, they will follow our typical pathway that they would have followed for Xi which is multi-learning modality, multi-day, multi-hour training pathway until they reach ability to use the system independently.

Gary Guthart: The second part of your question was kind of where are we in depth of penetration. And of course, that depends by country and it depends by procedure but just taking the United States for a moment and think about general surgery. Jamie, you might touch on just kind of where we are roughly in quartiles and some of the key procedures.

Jamie Samath: Yes. In the U.S., for most of the general surgery procedures, were in the second quartile; on prostatectomy, we're third to fourth quartile; hysterectomy malignant, third to fourth quartile; for benign conditions, were kind of at the [indiscernible] second to third quartile. But general surgery is where we've seen our growth in the U.S. and that's still relatively early stage.

Gary Guthart: We'll take one more caller and then we'll wrap.

Operator: Okay. That question comes from the line of Vijay Kumar from Evercore ISI.

Vijay Kumar: Congratulations on the dV5 approval. I had 2 questions, maybe I'll ask both of them together. The -- I guess on the Force Feedback ASP for INA to be up 9%, assuming all procedures used Force Feedback. I'm curious, given some of your power users like you will not need Force Feedback, what kind of data do you think Intuitive has to demonstrate for customers to appreciate the haptics? And Jamie, on the guidance. I know you said you're not updating reaffirming but the original guidance had contemplated the dV5. My question is between your original assumptions in January through the accrual now? Did anything change on your assumptions?

Gary Guthart: Thanks, Vijay. On the first one on Force Feedback and what kind of data we need, as we said a little bit earlier in the call, there's 2 different things that are going on. One is when you're using force sensing instruments, the system can record interaction forces during the case. A surgeon can choose to have those displayed into their hands. They can choose to have the feedback or they can choose to turn it off. So some of the study here will be exactly this issue of, what is the difference in clinical outcome and patient experience when you turn Force Feedback on and off. It won't be a matter of opinion. This is the thing that I love. You'll get a chance to actually see. What do you feel and what do you do? And I think that data is the data we're going to go out and collect over time and I think it will be fascinating and transformative. So that's that part. Jamie, I think you had answered the prior question before?

Jamie Samath: Yes, as a matter of technicality, Vijay, we're not going to make any comments with respect to prior guidance. We'll just defer that to the earnings call in April.

Gary Guthart: Okay. Well, thank you. That was our last question. Thank you for your continued interest in and support of Intuitive. We look forward to speaking to you again next month at our regularly scheduled earnings call.

Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect.