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    ISRG
    Earnings call· Jun 2026(Q2 FY26)

    INTUITIVE SURGICAL Q2 FY26 earnings call ISRG

    Jul 16, 2026 Source

    Executive summary

    Intuitive Surgical, Inc. Q2 FY26 — Strong Financials and System Adoption Amidst U.S. Procedure Moderation

    Intuitive Surgical delivered a strong financial quarter with robust revenue and EPS growth, driven by significant global adoption of its da Vinci and Ion platforms. While U.S. procedure growth saw some moderation due to patient deferrals and GLP-1 impact on bariatric cases, the company continues to expand its installed base and innovate across its product portfolio, including new da Vinci 5 features and an extended use program for instruments. International markets showed strong procedure growth, though China remains a challenging environment.

    Highlights

    5

    • Total procedures increased 16% year-over-year, driven by 15% growth in da Vinci procedures and 36% growth in Ion procedures.

    • Revenue rose 19% to $2.89 billion, with recurring revenue up 19% to $2.47 billion.

    • Non-GAAP earnings per share increased 28% to $2.80.

    • Da Vinci system placements increased 18% to 468 systems, reflecting strong demand for da Vinci 5 and XiR.

    • SP procedures grew 61%, powered by strength in the U.S. and Korea.

    Concerns

    3

    • U.S. da Vinci procedure growth moderated to 12% (from 14% in Q1), partly due to patient behavior changes related to ACA premium subsidy expiration and deferrable procedures.

    • U.S. da Vinci bariatric cases declined high single digits due to rising GLP-1 usage.

    • The China environment remains challenging with lower tender activity, increased domestic robotic competition, and policy-driven pricing pressure.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year 2026 da Vinci procedure growth
    13.5% to 15.5%
    high materiality
    Medium
    Non-GAAP gross profit margin
    68% to 69% of revenue
    medium materiality
    Medium
    Non-GAAP operating expense growth
    11% and 13%
    medium materiality
    Medium
    Noncash stock compensation expense
    $880 million and $900 million
    low materiality
    Medium
    Other income
    $315 million and $335 million
    low materiality
    Medium
    Non-GAAP income tax rate
    22% and 23% of pretax income
    low materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    U.S. da Vinci Procedures
    Growth moderated from recent trends, predominantly in procedures that can be deferred, partly due to changes in patient coverage and premium dynamics.
    		—12%——
    OUS da Vinci Procedures
    Consistent growth across regions, with Europe and Asia each up 20% and rest of world markets up 22%.
    		—20%——
    OUS Benign Procedures
    Represents just over 25% of international business, with volume growth accelerating.
    		—37%——
    China
    Environment remains challenging due to lower tender activity, increased domestic competition, and policy-driven pricing pressure.
    		—slightly ahead of global average——
    Japan
    Impacted by market-specific dynamics but saw increased system placements in Q2, partially reflecting recent positive reimbursement decisions.
    		—slightly ahead of global average——

    Operational metrics

    46
    Total procedures growth
    16%
    Q2 FY26

    Encompasses both da Vinci and Ion procedures.

    Da Vinci procedures growth
    15%
    Q2 FY26

    Part of total procedure growth.

    Ion procedures growth
    36%
    Q2 FY26

    Part of total procedure growth.

    Global installed base da Vinci increase
    12%
    Q2 FY26

    Reflects growth in the total number of da Vinci systems installed worldwide.

    Global installed base Ion increase
    21%
    Q2 FY26

    Reflects growth in the total number of Ion systems installed worldwide.

    Total systems installed worldwide
    almost 13,000
    Q2 FY26

    Combined da Vinci and Ion systems.

    U.S. da Vinci after-hours procedures increase
    26%
    Q2 FY26

    Contributed to U.S. da Vinci procedure growth.

    U.S. da Vinci bariatric cases decline
    high single digits
    Q2 FY26

    Impacted by rising GLP-1 usage.

    SP procedures growth
    61%
    Q2 FY26

    Driven by momentum in Korea and the U.S.

    Global installed base SP
    445
    Q2 FY26

    Total number of da Vinci SP systems installed.

    Ion cumulative procedures
    400,000+
    Q2 FY26

    Total procedures performed on Ion platform since launch.

    Total I&A revenue
    $1.73 billion18% growth
    Q2 FY26

    Instruments & Accessories revenue.

    Da Vinci I&A revenue per procedure
    $1,830vs $1,800 last year
    Q2 FY26

    Driven by higher mix of SP and da Vinci 5 procedures, offset by customer ordering patterns, higher cholecystectomy procedures and lower bariatric procedures.

    SP stapler usage in eligible cases (U.S.)
    nearly 60%up from 40% last quarter
    Q2 FY26

    Reflects continued progress in broad release.

    Cardiac procedures growth
    39%
    Q2 FY26

    Accelerated growth, though still early stage.

    Nipple-sparing mastectomy procedures growth
    43%
    Q2 FY26

    Accelerated growth, though still early stage.

    Da Vinci system placements
    46818% increase
    Q2 FY26

    Total da Vinci systems placed in the quarter.

    Ion system placements
    55
    Q2 FY26

    Total Ion systems placed in the quarter.

    Da Vinci 5 placements
    246
    Q2 FY26

    Part of total da Vinci system placements.

    Da Vinci 5 installed base
    over 1,700
    Q2 FY26

    Total da Vinci 5 systems installed and surgeons trained since launch.

    Refurbished Xi systems placed
    64vs 10 last year
    Q2 FY26

    Reflects investments by cost-constrained customers.

    X systems placed
    58vs 49 last year
    Q2 FY26

    Reflects investments by cost-constrained customers.

    Trade-in transactions
    144up from 83 a year ago
    Q2 FY26

    Primarily driven by U.S. customers upgrading to da Vinci 5.

    U.S. da Vinci system placements
    26724% increase
    Q2 FY26

    Driven by adoption of and upgrades to da Vinci 5.

    ASCs da Vinci system placements
    27
    Q2 FY26

    Significantly higher than historical placements, reflecting focus on this segment.

    OUS da Vinci system placements
    20112% increase
    Q2 FY26

    Total outside U.S. placements.

    China da Vinci system placements
    2
    Q2 FY26

    Reflects competitive dynamics in China.

    Distributor markets da Vinci system placements
    71vs 46 last quarter and 65 last year
    Q2 FY26

    Shows relative strength despite competitive targeting.

    SP system placements
    38higher than 23 last year
    Q2 FY26

    Primarily driven by increased placements in the U.S. and Japan.

    Systems revenue
    $685 million19% growth
    Q2 FY26

    Revenue from da Vinci and Ion system sales.

    Leasing % of da Vinci placements
    54%vs 56% last quarter and 49% last year
    Q2 FY26

    Percentage of da Vinci systems placed under leasing arrangements.

    Da Vinci leasing revenue
    22% increase
    Q2 FY26

    Reflecting expansion of installed base under operating lease and higher mix of da Vinci 5 systems.

    Average selling price for purchased da Vinci Systems
    $1.6 millionvs $1.5 million last year
    Q2 FY26

    Driven by higher mix of da Vinci 5 and dual console systems, partially offset by higher trade-ins and lower ASP X and XiR systems.

    Lease buyout revenue
    $56 millionvs $51 million last quarter and $30 million last year
    Q2 FY26

    Revenue from customers buying out their leased systems.

    Service revenue
    $472 million21% increase
    Q2 FY26

    Reflecting increase in da Vinci and Ion installed bases.

    Service revenue per da Vinci system
    8% increase
    Q2 FY26

    Reflecting a higher mix of da Vinci 5 systems.

    Non-GAAP gross margin
    70%increase from 67.9% in Q2 last year
    Q2 FY26

    Year-over-year improvement reflects product cost reductions, fixed overhead leverage, and a $36 million tariff refund benefit.

    Non-GAAP operating expenses increase
    13%
    Q2 FY26

    Driven by higher headcount, increased variable compensation, and higher facility costs.

    Employees added
    215
    Q2 FY26

    To support increased customer demand.

    Non-GAAP other income
    $83 millionvs $85 million last quarter
    Q2 FY26

    Comprised mostly of interest income.

    Non-GAAP effective tax rate
    22.6%
    Q2 FY26

    Consistent with expectations.

    Non-GAAP net income
    $1 billionvs $798 million last year
    Q2 FY26

    Strong financial performance.

    Cash and investments balance
    $8.6 billionup from $8 billion last quarter
    Q2 FY26

    Driven by cash flow from operating activities, offset by stock repurchases and capital expenditures.

    Stock repurchases
    $379 million
    Q2 FY26

    Executed during the quarter.

    Capital expenditures
    $112 million
    Q2 FY26

    For the quarter.

    Intuitive Foundation contribution
    $70 million
    Q4 2025

    Multiyear contribution made in Q4 2025; no contribution expected in 2026.

    Industry KPIs

    10
    MetricValueDetails
    System utilization3%%
    Pricing realized price—
    New product launch rampnearly 60%%
    Procedure volume growth16%%
    FCF conversion leverage guidance$1.8 billionUSD
    Installed base system placements468systems
    Segment franchise organic growth37%%
    Consumables recurring revenue mix$1.73 billionUSD
    Sales force commercial capacity build215employees
    Pivotal trial clinical evidence milestones—

    Product announcements

    3
    ProductTypeDetails
    da Vinci 5 platform updatesupdate
    EndoWrist instruments extended use programupdate
    Next-generation flexible robotic endoscope systemmilestone

    Risks & headwinds

    6
    U.S. procedure moderation due to patient behavior changesQ2 FY26 and potentially ongoing

    U.S. da Vinci procedure growth moderated to 12% in Q2 FY26 from 14% in Q1 FY26.

    Mitigation: Management expects deferred conditions to ultimately require treatment as patients return to care.

    Decline in U.S. da Vinci bariatric casesQ2 FY26 and potentially ongoing

    Declined high single digits during Q2 FY26.

    Mitigation: Attributed to rising GLP-1 usage, no specific mitigation mentioned beyond monitoring.

    Challenging environment in ChinaOngoing

    Lower tender activity, increased domestic robotic competition, policy-driven pricing pressure, 2 systems placed in Q2 FY26.

    Mitigation: Engaging with provincial governments on charge code policy and progressing through the green channel process for SP and da Vinci 5 clearance.

    Capital pressure in parts of EuropeOngoing in 2026

    Unquantified

    Mitigation: Related to macroeconomic impact and shifting governmental priorities; company offers segmented system portfolio like XiR to address cost-constrained markets.

    Prior capital challenges in JapanPersist in 2026

    Unquantified

    Mitigation: New policies supporting robotic surgery went into effect on June 1, including reimbursement for additional procedures and economic incentives for higher utilization programs, which are encouraging.

    Higher input costsOngoing in 2026

    Unquantified impact on gross margin

    Mitigation: Specifically mentioned freight and semiconductor memory; company is implementing product cost reductions.

    Q&A highlights

    9

    How much of the U.S. procedure growth moderation is due to ACA vs. market maturity, and will deferred procedures return in H2?

    Management attributes the moderation to customer feedback, observed differences in trends between deferrable and non-deferrable procedures, and the law of large numbers. They noted a 12% U.S. da Vinci growth in Q2 versus 14% in Q1, acknowledging a likely combination of ACA impact and market maturity.

    “If you look at those procedure types where we know that a subset of them can be deferred. We see a difference in terms of what's happening in the procedure trends, particularly in Q2 relative to those procedures where they're less deferrable or not deferrable so it's just a combination of those 2 things.”

    asked by Travis Steed · answered by Jamie Samath

    2 min read5 chapters

    Detailed Narrative

    01

    Global Adoption and System Placements

    Intuitive experienced continued global adoption across its multi-port, single-port, and Ion platforms in Q2 FY26. Total procedures increased 16%, with da Vinci procedures up 15% and Ion procedures up 36%. The global installed base of da Vinci and Ion systems grew by 12% and 21% respectively, exiting the quarter with almost 13,000 systems worldwide. The company placed 468 da Vinci systems and 55 Ion systems, reflecting strong customer demand for newer platforms like da Vinci 5 and the XiR.

    02

    U.S. Procedure Trends and Headwinds

    U.S. da Vinci procedure growth moderated to 12% in Q2, down from 14% in Q1. This moderation was primarily observed in deferrable procedures, with customer feedback suggesting impacts from changes in patient coverage and premium dynamics, particularly related to ACA enhanced premiums. Additionally, U.S. da Vinci bariatric cases declined by high single digits, continuing to feel the impact of rising GLP-1 usage. Despite these headwinds, the underlying disease burden is expected to drive future treatment.

    03

    International Market Dynamics

    Outside the U.S., da Vinci procedure growth was strong at 20%, with Europe and Asia each up 20% and rest of world markets up 22%. India had another strong quarter, and Japan saw positive policy changes, including reimbursement for additional procedures, leading to increased system placements. However, China remains a challenging environment due to lower tender activity, increased domestic competition, and policy-driven pricing pressure, with only two systems placed in the quarter.

    04

    Product Innovation and Ecosystem Expansion

    Intuitive rolled out the first phase of over 100 planned updates to the da Vinci 5 platform, aimed at improving telepresence, simulation-based training, and Care Team workflow. The company also announced an extended use program for a subset of EndoWrist instruments, expected in H1 2027, designed to reduce customer costs in benign procedures and support broader adoption. The SP stapler launch continues to progress well, used in nearly 60% of eligible U.S. cases.

    05

    R&D and Future Growth Areas

    The company is advancing multiple early-stage R&D programs, including the submission for FDA 510(k) clearance of a foundational noncommercial, next-generation flexible robotic endoscope system for use in the gastrointestinal tract. This initiative leverages learnings from da Vinci and Ion to explore new clinical applications. Intuitive continues to invest in R&D to accelerate innovations in AI, machine learning, robotics, and advanced materials, aiming to differentiate solutions and reduce the total cost of care.

    AI-generated summary of the company’s earnings call. Not investment advice.