Intuitive Surgical (ISRG) Q2 FY26 earnings call: guidance and Q&A

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

Can management quantify the I&A revenue impact of the extended use program and its potential to open up ASCs and international procedures?

Management is not ready to quantify the impact yet but stated it will be a progressive impact over 2027, not a step function. The program aims to lower costs for high-volume benign procedures and in geographies with lower reimbursements, which is seen as a strategic move to drive incremental growth.

“The improvements that allow us to extend the lives have been years in the works by our engineering teams, it is intended to lower cost where we see cost constraints in both certain procedures and geographies.”

asked by Travis Steed · answered by Jamie Samath

What is the current and forward outlook for the capital environment in the U.S. and outside the U.S., especially with concerns about hospital bad debt?

The U.S. capital environment has been stable, supported by 70% of systems being under leasing arrangements and strong interest in da Vinci 5 upgrades. International markets are mixed: China is competitive, Japan shows cautious optimism due to new reimbursements, and Europe varies by market.

“The U.S. capital environment, at least in our experience, has been stable for some time now. And you see that, I think, in the healthy system placements in Q2 in the U.S., up 24%.”

asked by Robert Marcus · answered by Jamie Samath

How will the 100+ planned da Vinci 5 updates unfold, and which ones will be most impactful on growth or procedure volumes?

The updates will roll out regularly, leveraging da Vinci 5's compute power. Some are 'under the hood,' while others are visible features focused on usability and efficiency. Three specific updates (minimizing communication, adjusting multiple arms, digital ruler) have been submitted for 510(k) clearance, with the digital ruler having broad utility.

“And so the press release that you're referring to has 100 updates. And some of those updates will be not visible to the customer. They're kind of under the hood so to speak, and many will be visible to the customer.”

asked by Frederick Wise · answered by David Rosa

Why is Intuitive entering the GI robot space now, and what is the potential TAM and impact?

The GI robot is a natural extension of the mission to improve minimally invasive care, leveraging learnings from da Vinci and Ion. It's an early-stage, noncommercial endoluminal system submitted for 510(k) clearance. Management is excited about the potential but not ready to discuss specific timing or TAM size.

“So the way I would frame GI is basically a natural extension of our mission to bring better minimally invasive care to more patients.”

asked by Frederick Wise · answered by David Rosa

Does the strong capital demand reflect assumptions of increasing future procedure demand, given the current procedure growth moderation?

Jamie explained that about half of U.S. placements were trades, not expanding the installed base, and U.S. installed base expansion has moderated. While U.S. system utilization grew 3%, some customers express caution over ACA trends. Capital pipeline remains healthy, driven by interest in da Vinci 5.

“If I could take the U.S. a couple of things just to consider, -- about half of the placements in the U.S. in Q2 were trades. So while you can get incremental capacity in the field, if you're upgrading to da Vinci 5. Obviously, then the half of those placements are not expanding the installed base.”

asked by Ryan Zimmerman · answered by Jamie Samath

How durable is the da Vinci 5 upgrade cycle, and what inning are we in, given the broader installed base?

Management noted that the Xi upgrade cycle took about 7 years to peak. They expect the da Vinci 5 upgrade cycle to be progressive over multiple years, as its capabilities and ecosystem increase over time with software updates and other improvements, making the system more attractive.

“I don't think we have a perfect prediction, I would just say, if you look at the when we introduced Xi, it took about 7 years before we got to the peak trading volumes going from Si to Xi.”

asked by Ryan Zimmerman · answered by Jamie Samath

Can you provide more color on XiR placements, its outlook, and its potential percentage of the future mix?

XiR is a 'fantastic option' for cost-constrained customers, leveraging the Gen 4 ecosystem. About 130 XiRs are installed globally (50 in the U.S., 20 in ASCs). It's seen as a strong option for new-to-robotics customers, allowing them to start programs and potentially upgrade later. It's expected to be a significant part of placements.

“What's exciting about XiR is it gives us the opportunity to access customers that have not yet invested in robotics allows them to have their first program start to get through the learnings, see the benefits of it and becomes then a customer that we can bring to more advanced technology over time.”

asked by Matthew Taylor · answered by Jamie Samath

Given the extended use program, is it fair to assume I&A per case will be flat, or is there risk of a decline in 2027-2028?

Jamie reiterated that quantification is not yet available. He stated the company balances growth and profitability, and pursuing incremental growth in lower acuity procedures by lowering costs is strategic. He acknowledged that mix dynamics (e.g., higher pricing from DV5/SP) can offset some impacts.

“I'm not going to provide the quantification until we've been through the analysis and made our decisions. I think that in the way that we think about managing the company, where we're balancing 2 objectives, growth and profitability and where we see opportunities to have incremental growth in these lower acuity procedures, then we're willing to pursue those.”

asked by Michael Polark · answered by Jamie Samath