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    ISRG
    Earnings call· Dec 2025(Q4 FY25)

    INTUITIVE SURGICAL INC ISRG

    Jan 22, 2026 Source

    Executive summary

    Intuitive Surgical Q4 FY25 — Strong Procedure Growth and da Vinci 5 Expansion

    Intuitive Surgical delivered a strong Q4 and full-year FY25, marked by robust procedure growth across its da Vinci, Ion, and Single-Port platforms, alongside the successful global expansion of da Vinci 5. The company continues to invest in innovation and market access, particularly in ambulatory surgery centers, while navigating competitive pressures in China and macroeconomic headwinds in Europe and Japan. Management remains focused on advancing minimally invasive care and expanding its digital ecosystem.

    Highlights

    5
    • Total procedures grew 19% for FY25, driven by da Vinci (18%) and Ion (51%) growth.

    • FY25 revenue increased 21% year-over-year to $10.1 billion.

    • FY25 pro forma EPS increased 22%, marking the third consecutive year of growth above 20%.

    • Free cash flow significantly increased to $2.5 billion in FY25, up from $1.3 billion in FY24.

    • da Vinci 5 launched in Europe, the U.K., and Japan in H2 2025, with 58 systems placed outside the U.S.

    Concerns

    4
    • Tariffs had a 95 basis point impact on Q4 pro forma operating margin and are forecast to impact 2026 gross margin by 1.2% of net revenue.

    • Procedure growth in Japan was lower than expectations due to reduced capital placements.

    • Robotic competition in China intensified in Q4, with provincial tenders expressing preference for local suppliers and impacting win ratio.

    • Ion placements in Q4 were lower at 42 systems compared to 69 systems in the prior year.

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year da Vinci procedure growth
    13% and 15%
    high materiality
    High
    Pro forma gross profit margin
    67% and 68%
    medium materiality
    High
    Tariff impact on net revenue
    1.2%
    medium materiality
    High
    Pro forma operating expense growth
    11% and 15%
    medium materiality
    High
    Noncash stock compensation expense
    $890 million and $920 million
    low materiality
    High
    Other income (interest income)
    $355 million and $375 million
    low materiality
    High
    Pro forma income tax rate
    22% and 23%
    low materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Global da Vinci Procedures
    Strong growth across both multiport and single-port procedures for the full year 2025.
    Multiport procedures growth: 17%Single-port procedures growth: 87%Total patients treated in 2025: 3.1 millionTotal patients treated since 1997: 20 million
    18%
    US da Vinci Procedures
    Notable contributions from general surgery procedures, including after-hours use, driving U.S. growth.
    Total patients treated in 2025: 2 millionQ4 growth: 15%Q4 after-hours procedures growth (acute care): 35%
    15%
    International da Vinci Procedures
    Reflects clinical demand, improved market access, broad training initiatives, and supportive economics. Q4 saw strong results in Canada, India, Korea, distributor markets, Germany, U.K., Italy, Spain, and Taiwan, but lower growth in Japan.
    Europe growth: 21%Asia growth: 24%Rest of World growth: 27%Procedures outside U.S. as % of global: 35%Q4 growth: 21%
    23%
    Ion Procedures
    Robust clinical growth for the Ion platform, with continued focus on utilization and capability expansion.
    Total procedures in 2025: 144,000Q4 growth: 44%Total procedures since FDA clearance (2019): 325,000
    51%
    Total Procedures (da Vinci + Ion)
    Overall strong procedure growth driven by both da Vinci and Ion platforms globally.
    Q4 growth: 18%US Q4 total procedures growth: 16%OUS Q4 total procedures growth: 22%OUS Q4 day-adjusted total procedures growth: 23%
    19%
    Single-Port (SP) Procedures
    Driven by high rates of growth in Korea and the U.S., with accretive early growth in Europe, Japan, and Taiwan.
    Q4 growth: 78%Q4 US average system utilization growth: 21%
    87%
    OUS Benign General Surgery Procedures
    Driven by cholecystectomy and hernia repair in Q4.
    27%

    Operational metrics

    42
    Revenue
    $10.1 billionup 21% YoY
    FY25

    Total revenue for the full fiscal year 2025.

    Pro forma operating margin
    37%up 70 bps
    FY25

    Reflected deliberate investments in R&D and manufacturing scale, impacts of tariffs and newer platform mix, partially offset by cost efficiency initiatives.

    Pro forma EPS growth
    22%
    FY25

    Marked the third consecutive year of pro forma EPS growth above 20%.

    Stock repurchases
    $2.3 billion
    FY25

    Total stock repurchases during the fiscal year 2025.

    Revenue
    $2.87 billionup 19% YoY
    Q4 FY25

    Total revenue for the fourth quarter.

    Recurring revenue
    $2.3 billionup 20% YoY
    Q4 FY25

    Recurring revenue for the fourth quarter.

    Constant currency revenue growth
    18%
    Q4 FY25

    Revenue growth adjusted for currency fluctuations.

    Pro forma operating margin
    37%
    Q4 FY25

    Operating margin for the fourth quarter, including specific impacts.

    I&A revenue per procedure
    $1,850vs $1,860 last year
    Q4 FY25

    Primarily driven by customer ordering patterns, downward pressure from lower bariatric and higher cholecystectomy procedures, offset by higher SP procedures and da Vinci 5-specific I&A.

    I&A revenue per procedure
    $2,200relatively consistent with prior periods
    Q4 FY25

    I&A revenue per procedure for the Ion platform.

    Systems revenue
    $786 millionup 20% YoY
    Q4 FY25

    Total systems revenue for the fourth quarter.

    Leasing revenue
    up 34%
    Q4 FY25

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

    Lease buyout revenue
    $39 millionvs $22 million last quarter and $28 million last year
    Q4 FY25

    Revenue from lease buyouts in the fourth quarter.

    Service revenue
    $422 millionup 21% YoY
    Q4 FY25

    Reflecting an increase in the da Vinci installed base of 12% and the Ion installed base of 24%.

    Service revenue per system
    up 7%YoY
    Q4 FY25

    Primarily reflecting a higher mix of da Vinci 5 systems.

    Pro forma gross margin
    67.8%down from 69.5% in Q4 last year
    Q4 FY25

    Gross margin for the fourth quarter.

    Pro forma operating expenses
    up 16%YoY
    Q4 FY25

    Operating expenses for the fourth quarter.

    Employees added
    200
    Q4 FY25

    Headcount increase during the quarter.

    Donation to Intuitive Foundation
    $70 millionvs $45 million in Q4 last year
    Q4 FY25

    Increased donation reflects a multiyear decision due to new U.S. tax rules effective in 2026.

    Pro forma other income
    $86 millionvs $93 million last quarter
    Q4 FY25

    Primarily reflecting lower interest income.

    Pro forma effective tax rate
    20.6%
    Q4 FY25

    Slightly below expectations, driven by net discrete benefits from tax reserve releases and adjustments.

    Pro forma net income
    $914 millionvs $805 million last year
    Q4 FY25

    Net income on a pro forma basis for the fourth quarter.

    Pro forma EPS
    $2.53vs $2.21 last year
    Q4 FY25

    Earnings per share on a pro forma basis for the fourth quarter.

    GAAP net income
    $795 millionvs $686 million last year
    Q4 FY25

    Net income on a GAAP basis for the fourth quarter.

    GAAP EPS
    $2.21vs $1.88 last year
    Q4 FY25

    Earnings per share on a GAAP basis for the fourth quarter.

    Cash and investments balance
    $9 billionup from $8.4 billion last quarter
    Q4 FY25

    Driven primarily by cash from operations, partially offset by stock repurchases and capital expenditures.

    Stock repurchases
    $201 million
    Q4 FY25

    Stock repurchases during the fourth quarter.

    Capital expenditures
    $155 million
    Q4 FY25

    Capital expenditures during the fourth quarter.

    da Vinci systems placed
    1,721
    FY25

    Total da Vinci systems placed during the full fiscal year 2025.

    da Vinci systems placed
    532up 8% from 493 last year
    Q4 FY25

    Total da Vinci systems placed in the fourth quarter.

    Ion systems placed
    42compared to 69 last year
    Q4 FY25

    Lower Ion placements in the U.S. continue to reflect a joint focus with customers on increasing utilization.

    Refurbished XiR systems placed
    42
    FY25

    Refurbished da Vinci Xi systems offered as an integral part of the system strategy.

    da Vinci installed base
    11,100up 12% YoY
    Q4 FY25

    Total installed base of da Vinci systems.

    Ion installed base
    1,000up 24% YoY
    Q4 FY25

    Total installed base of Ion systems.

    da Vinci 5 installed base
    1,232
    Q4 FY25

    Installed base of da Vinci 5 systems, used by over 10,000 surgeons since launch.

    Trade-in transactions
    146up from 62 a year ago
    Q4 FY25

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

    da Vinci placements
    304up from 284 last year
    Q4 FY25

    Driven by adoption of da Vinci 5.

    da Vinci placements
    228compared to 209 last year
    Q4 FY25

    OUS placements, noting government budget challenges in Japan and U.K., and intensified competition in China.

    Leasing proportion of da Vinci placements
    47%vs 54% last quarter and 45% last year
    Q4 FY25

    Driven by the mix of customers who prefer to purchase, but expected to increase over time due to OUS customers.

    Cardiac procedures
    17,000
    2025

    Performed globally on Si and Xi platforms, growing accretively to the corporate average.

    Cardiac TAM
    160,000
    per year

    Estimated addressable market for da Vinci 5 in currently cleared geographies for cardiac procedures.

    Line of sight procedures
    9 millionup from 7 million in '24
    future

    Reflects strengthening clinical validation, supportive economics in benign procedures, modest impact from additional procedure clearances, and demographic impact from an aging population.

    Industry KPIs

    12
    MetricValueDetails
    Tariff impact95 basis pointsbps
    System utilization3%%
    Pricing realized price$1,850USD
    New product launch ramp870systems
    Procedure volume growth19%%
    FCF conversion leverage guidance$2.5 billionUSD
    Installed base system placements1,721systems
    Segment franchise organic growth18%%
    Consumables recurring revenue mix$2.3 billionUSD
    Sales force commercial capacity build200employees
    Indicated addressable patient population160,000procedures
    Pivotal trial clinical evidence milestones50% less likely%

    Product announcements

    3
    ProductTypeDetails
    da Vinci 5milestone
    Single-Port (SP) Platformmilestone
    Single-Port (SP) Staplerlaunch

    Risks & headwinds

    10
    Tariff impact on marginsQ4 FY25 and FY26

    95 basis points impact on Q4 pro forma operating margin; 1.2% of net revenue impact on 2026 gross profit margin guidance

    Mitigation: Cost efficiency initiatives, product cost reductions, purchase component savings helped partially offset pressures.

    Macroeconomic impact and capital pressure in EuropeFY26

    Reflected in 2026 da Vinci procedure growth guidance of 13-15%

    Mitigation: Continued investment in market access activities and local evidence generation.

    Intensified robotic competition in ChinaQ4 FY25 and FY26

    Impacted win ratio in Q4; reflected in 2026 da Vinci procedure growth guidance of 13-15%

    Mitigation: Competing with locally manufactured Xi systems, strong team, broader ecosystem, and competitive pricing.

    Capital challenges in JapanQ4 FY25 and FY26

    Lower capital placements over the last several quarters, impacting procedure growth; reflected in 2026 da Vinci procedure growth guidance of 13-15%

    Mitigation: Awaiting potential reimbursement for additional robotic procedures starting June 2026.

    Changes to ACA premium subsidies and Medicaid funding in the U.S.FY26

    Potential impact on hospital and patient behavior; reflected in 2026 da Vinci procedure growth guidance of 13-15%

    Mitigation: Monitoring trends and adapting strategies.

    Impact of new pharmaceutical products for obesity managementFY26

    Potential impact on procedures; reflected in 2026 da Vinci procedure growth guidance of 13-15%

    Mitigation: Monitoring market developments and clinical implications.

    Downward pressure from lower bariatric proceduresQ4 FY25

    Contributed to da Vinci I&A revenue per procedure of $1,850 in Q4, compared to $1,860 last year

    Mitigation: Offset by higher SP procedures and da Vinci 5-specific I&A.

    Higher facility costsQ4 FY25

    Contributed to Q4 pro forma gross margin decline to 67.8% from 69.5% last year

    Mitigation: Cost efficiency initiatives helped partially offset these pressures.

    Greater mix of lower-margin da Vinci 5 and Ion revenueQ4 FY25

    Contributed to Q4 pro forma gross margin decline to 67.8% from 69.5% last year

    Mitigation: Cost efficiency initiatives helped partially offset these pressures.

    Higher service costs related to da Vinci 5Q4 FY25

    Contributed to Q4 pro forma gross margin decline to 67.8% from 69.5% last year

    Mitigation: Cost efficiency initiatives helped partially offset these pressures.

    What to watch in Q1 FY26

    5

    Japan reimbursement for robotic procedures

    Starting June 2026
    CurrentJapanese Ministry of Health, Labour and Welfare is in final stages of evaluation.
    TargetGranting reimbursement for additional robotic procedures.

    Why it matters

    This could significantly impact procedure growth and capital placements in Japan, a key international market.

    The Japanese Ministry of Health, Labour and Welfare is currently in the final stages of evaluating granting reimbursement for additional robotic procedures starting in June of 2026. We will provide an update on the outcome on our next earnings call.

    Q&A highlights

    7

    What does the FDA approval for cardiac non-Force Feedback instruments open up, and are new disease states like cardiac part of the 2026 priorities?

    Management explained the foundational work for cardiac surgery, including clearances, training pathways, and instrument development. They noted 17,000 cardiac procedures globally in 2025 and a da Vinci 5 TAM of 160,000 procedures per year in cleared geographies (US, Korea).

    The initial clearance here, I think incorporates our entire portfolio of non-Forced Feedback instruments and has value today for cardiac procedures. And again, we'll work to add Force Feedback in time through the regulatory pathway.

    asked by Travis Steed · answered by David Rosa

    3 min read6 chapters

    Detailed Narrative

    01

    FY25 Performance and Strategic Priorities

    Intuitive Surgical concluded FY25 with strong performance, achieving 19% total procedure growth, 21% revenue growth to $10.1 billion, and a 22% increase in pro forma EPS. The company's strategic priorities for 2025 focused on the full launch of da Vinci 5, increasing adoption of focused procedures, building industrial scale, and enhancing digital tools. For 2026, priorities include global expansion of platforms, digital feature releases, continued adoption efforts, manufacturing optimization, and advancing innovation into new disease states.

    02

    da Vinci 5 Expansion and Cardiac Clearance

    Demand for da Vinci 5 strengthened throughout 2025, with 870 systems placed globally, including 58 in Europe, the U.K., and Japan following H2 launches. Customer feedback highlights benefits like greater autonomy and enhanced efficiency, leading to higher utilization. The company received FDA clearance for several cardiac procedures on da Vinci 5 using non-Force Feedback instruments, with a measured rollout planned to support training and adoption in this complex surgical area. The My Intuitive+ digital subscription package, offered with da Vinci 5, includes simulation, telecollaboration, and case insights.

    03

    Single-Port (SP) Platform Momentum and New Indications

    The Single-Port platform demonstrated significant momentum in 2025, with procedures growing 87% and the installed base increasing 39% to 377 systems. Key growth drivers included Korea and the U.S., with early traction in Europe, Japan, and Taiwan. In Q4, the SP platform received 510(k) clearance for additional indications, including nipple-sparing mastectomy, inguinal hernia repair, cholecystectomy, and appendectomy. The SP stapler, following positive initial feedback, is moving into a broad launch this quarter to support deeper penetration in thoracic and colorectal procedures.

    04

    Ion Platform Growth and Capability Expansion

    The Ion platform continued its robust clinical growth, with worldwide procedures increasing 51% to over 144,000 in 2025, and a global installed base approaching 1,000 systems. The company remains focused on growing utilization of existing domestic systems and ensuring strong early results in international markets. Efforts are underway to expand Ion's capabilities, including the integration of ROSE (rapid on-site tissue evaluation technology) and endobronchial ultrasound, aiming to minimize time from detection to treatment for lung cancer patients.

    05

    ASC Strategy and Refurbished XiR Systems

    Intuitive is expanding its footprint in Ambulatory Surgery Centers (ASCs), a multi-year effort leveraging its refurbished da Vinci Xi systems (XiR). In 2025, 42 XiR systems were placed. The company believes there is a sizable long-term opportunity for XiR and related economic programs to expand access internationally and in U.S. ASCs, particularly in higher-volume centers and those affiliated with existing IDN customers. This strategy also supports customers upgrading to da Vinci 5 by facilitating the redeployment of their existing Xi systems to HOPD or ASC settings.

    06

    Clinical Evidence Supporting Robotic Surgery

    Recent clinical studies underscore the benefits of robotic-assisted surgery. The CONVERSION Study, a 20-year meta-analysis, found that robotic-assisted procedures were approximately 50% less likely to convert to open surgery compared to laparoscopic procedures across various general surgeries. A Danish study on ventral and incisional hernia repair showed that robotic-assisted procedures resulted in significantly shorter length of stay (0.5 days vs. 1.2 days), a 44% reduction in readmission rates, and lower mean total perioperative costs (EUR 660 difference) compared to laparoscopic approaches.

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