What drove ISRG's gross profit growth in 2024?

Intuitive Surgical's (ISRG) gross profit margin improved significantly in 2024, driven by several key factors:

1. Revenue Growth: The company experienced a 17% growth in revenue, reaching $8.4 billion for the year. This increase in revenue is a direct result of the company's successful product launches and strategic market expansions.
2. Gross Margin Improvement: The pro forma gross margin improved by 100 basis points to 69.1% in 2024. This improvement indicates enhanced operational efficiency and profitability.
3. System Placements: Intuitive Surgical placed 1,430 multiport systems in 2024, an increase from 1,313 in 2023. The growth in system placements contributes to higher revenue and profit margins, as each system sale is accompanied by related services and accessories that generate additional income.
4. Procedure Growth: The company saw a 17% growth in da Vinci procedures and a 78% growth in Ion procedures for the full year 2024. This increase in procedure volume directly impacts revenue and gross profit, as each procedure performed on the company's systems generates income.
5. Market Penetration: The company's expansion into new markets, such as the UK, Japan, and Germany, has contributed to its growth. Entering new markets allows for increased system placements and procedure volumes, which in turn drive revenue and profit margins.

In summary, ISRG's gross profit growth in 2024 was driven by revenue growth, improved gross margin, increased system placements, procedure growth, and market expansion. These factors collectively contributed to the company's robust financial performance and improved profitability.