Intuitive Surgical Earnings Beat Forecasts

Intuitive Surgical (ISRG) reported Q4 2025 earnings on Jan. 22, 2026, surpassing Street estimates as rising da Vinci and Ion procedure volumes boosted revenue and profits. Management cautioned that tariff-related pressures will weigh on 2026 margins.

Quarterly Results and Fiscal Performance

Intuitive Surgical posted pro forma earnings per share (EPS) of $2.53 for Q4 2025, about 12.0% above the $2.26 consensus, with revenue of $2.9 billion, roughly 4.4% ahead of forecasts, the company said in a Jan. 22 press release. Constant-currency revenue grew 18.0%, and pro forma net income rose to $914 million from $805 million a year earlier.

Recurring revenue accounted for 81% of sales at $2.3 billion. Instruments and accessories contributed $1.7 billion, systems revenue was $786 million, and services generated $422 million.

For the full year, revenue reached $10.1 billion, up 21.0% from 2024, with pro forma EPS of $8.93, a 22.0% increase. The pro forma operating margin rose about 70 basis points to 37.0%. Free cash flow more than doubled to $2.5 billion, and year-end cash and investments totaled $9.0 billion. The company repurchased $2.3 billion of stock at an average price of $478 per share.

Procedure Volume and System Growth

Procedure demand drove the beat, with total da Vinci and Ion procedures rising 19.0% for the year and 18.0% in Q4. Da Vinci procedures reached 3.153 million, an 18.0% increase from 2024, including over 2 million in the U.S. (up 15.0%) and more than 1.1 million internationally (up 23.0%). Da Vinci procedures grew 17.0% in Q4, while after-hours acute-care procedures jumped 35.0%, led by cholecystectomy and appendectomy.

Ion procedures surged 51.0% for the year and 44.0% in Q4. Single-port procedures increased 87.0%, indicating broader adoption beyond urology.

The installed base expanded with 11,106 da Vinci systems at year-end, a 12.0% increase, including 1,721 placements in 2025, of which 870 were da Vinci 5 units. Average da Vinci utilization rose 4.0% in Q4. Ion’s installed base approached 1,000 systems, up 24.0% year-over-year, though Q4 placements slowed to 42 from 69 a year earlier. Ion utilization climbed 11.0% in the quarter.

Instruments and accessories revenue per da Vinci procedure was about $1,850, roughly flat from the prior year, while Ion revenue per procedure was about $2,200. International procedure growth was strong, with Europe up 21.0%, Asia 24.0%, and the rest of the world 27.0%. International procedures accounted for 35.0% of the global total.

Guidance, Margins, and Challenges

Management forecast da Vinci procedure growth of 13%–15% for 2026 and set a pro forma gross-margin range of 67%–68%, noting tariff pressures as a significant headwind. CFO Jamie Samath said, "We forecast an impact from tariffs of 1.2% of net revenue, plus or minus 10 basis points." The outlook implies roughly flat margins year-over-year after accounting for tariffs and product-mix shifts.

Q4 pro forma gross margin declined to 67.8% from 69.5% a year earlier. The decrease reflected a 95-basis-point tariff impact, higher facility costs, and a shift toward lower-margin da Vinci 5 and Ion sales, partially offset by product-cost reductions and purchase-component savings.

Pro forma operating expenses rose 16.0% in Q4, driven by a $70 million Intuitive Foundation donation (up from $45 million), about 200 new employees, higher variable compensation, and increased facility spending. The quarter’s effective tax rate was 20.6%, aided by an $11 million discrete tax benefit. Operating expenses increased 12.0% for the full year.

For 2026, management expects operating expenses to rise 11%–15% as it scales early-stage research and development and absorbs costs from a distributor acquisition. Non-cash stock compensation is projected between $890 million and $920 million, other income around $355 million to $375 million, and the pro forma tax rate about 22%–23%. The company will no longer provide specific capital-expenditure guidance.

The company secured several 510(k) clearances in Q4 for procedures including nipple-sparing mastectomy, inguinal hernia repair, cholecystectomy, and appendectomy. It plans a measured rollout of nipple-sparing mastectomy in 2026 and beyond. Da Vinci 5 has been expanding internationally since mid-2025. A broad launch of a single-port stapler is planned for Q1 2026. Intuitive also intends to shift to direct sales in Italy, Spain, and Portugal by the end of Q1 2026, transferring about 250 employees.

Investors will monitor the company’s early-2026 product cadence and the transition to direct international sales, which management says will influence utilization and margin trends throughout the year.