ISRG · Q4 2025 Earnings

Cautious

Intuitive Surgical

Reported January 14, 2026

30-second summary

Intuitive delivered Q4 revenue of $2.87B (+19% YoY) and FY2025 revenue of $10.06B (+21%), with Q4 da Vinci procedure growth of +17% YoY on 849k procedures and 532 system placements (303 DV5). The substantive concern is the FY2026 guide architecture, delivered in prepared remarks on the call: da Vinci procedure growth of 13–15% (a ~400bps midpoint deceleration from FY2025's ~18% actual), non-GAAP gross margin 67–68% (vs. 67.6% in 2025), tariff drag stepping up to 120bps (vs. 65bps in 2025, a +55bps increment), OPEX growth 11–15% (wider upper bound than FY2025's narrowed 11–13% band), tax rate 22–23% (vs. ~21% in 2025), SBC $890–920M, and other income $355–375M. The procedure-growth step-down is the headline read; tariff/OPEX dynamics compound the cautious framing.

Headline numbers

Revenue

Q4 FY2025

$2.87B

+19.0% YoY

Key financials

Q4 FY2025

Metric	Q4 FY2025	Q4 FY2024	YoY	Q3 FY2024	QoQ
Revenue	$2.87B	$2.87B	-0.1%	$2.51B	+14.2%

Guidance

Intuitively Surgical reported FY2025 revenue of $10.06B (21% YoY growth) and provided only qualitative guidance for FY2026; substantive margin and OpEx guidance for FY2025 were not confirmed in actuals, and no specific FY2026 numerical targets were disclosed this quarter.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	FY2025	—	$10.0647 billion	No prior FY2025 revenue guide to compare	Beat
Da Vinci Procedure Growth	FY2025	approximately 17% to 17.5%	actual procedure growth not explicitly stated in reported actuals	Insufficient data to quantify beat magnitude	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Non-GAAP Gross Profit Margin	FY2025	67% to 67.5% of revenue	Withdrawn — no replacement	—	Withdrawn
Non-GAAP Operating Expense Growth	FY2025	11% to 13%	Withdrawn — no replacement	—	Withdrawn

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	Q4 FY2024	YoY
Instruments and accessories	$1.658B	—	+17.0%
Systems	$0.786B	$0.786B	-0.0%
Service	$0.422B	—	+21.0%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	Q4 FY2024	YoY
Da Vinci Surgical System Placements	532 units	—	—
Da Vinci Procedures	849 thousand	—	—
Ion System Placements	42 units	42	—
Average Selling Price	$1.68 million	—	—
I&A Revenue per Procedure	$1.85 thousand	—	—
Installed Base	11,106 systems	—	—
Total Recurring Revenue	81% of revenue	—	—
US Da Vinci Placements	304 units	—	—

Management tone

Q2 anchor: "Q2 op margin not the new normal" → Q3 anchor: confident raise on procedure growth and gross margin → Q4 anchor: formal FY2026 guide that decelerates procedure growth, widens OPEX upper bound, and nearly doubles tariff drag.

The tariff narrative has fully reversed. Q2 framed tariffs as ~100bps with ±20bps uncertainty; Q3 cut the midpoint to 70bps and halved the band to ±10bps, presenting the de-risking as fact; Q4 walks the FY2026 drag to ~120bps. That is a +55bps step-up vs. the 2025 actual of 65bps — a near-doubling. Whatever drove the Q3 confidence (policy delay, mitigation expectation, mix) is not extending into 2026, and management is signaling that directly through the formal guide.

The OPEX guide widened in a direction the prior quarter narrowed. Q3 narrowed OPEX growth to 11–13% (cutting the upper bound from 14% to 13%). The FY2026 guide widens it back to 11–15% — 200bps higher on the top end than FY2025's narrowed band. Management framed this as procedure-range variance plus Italy/Spain/Portugal direct-distribution costs and higher early-stage R&D spending. Q3's watch item — whether the new CFO maintained the guidance architecture — looks more like "the architecture loosened" than "held."

On procedure growth, the formal 13–15% FY2026 band is the most consequential disclosure. Against FY2025's ~18% actual, the midpoint of 14% implies ~400bps of deceleration. Management cited ACA premium subsidy and Medicaid funding changes, European capital pressure, China tender intensity, Japan capital weakness, and new obesity pharmaceutical products as factors considered in the range. Separately, the multi-year "direct line of sight" framing (7M procedures in 2024 → 8M in 2025 → 9M in 2026) continues to anchor the qualitative TAM story.

Risks management surfaced:

Unspecified risks and uncertainties described in SEC filingsMaterial differences between expressed/implied results and actual results

Q&A highlights

Travis Steed · Bank of America

Requested clarification on FDA approval for cardiac non-force feedback instruments on DaVinci 5, what it opens up, and how it relates to new disease states mentioned in 2026 priorities.

Management explained cardiac clearance received in U.S., with foundational work ongoing including geographies, force feedback instruments, training pathways, cardiac-specific instrumentation, and collaboration with surgical societies. Provided TAM context: ~17,000 procedures globally in 2025 on older platforms; ~160,000 procedures/year opportunity for DaVinci 5 in current cleared geographies (U.S., Korea) with expansion potential.

17,000 cardiac procedures performed globally in 2025 on SI and XI platforms160,000 procedures per year addressable opportunity for DaVinci 5 cardiac in U.S. and KoreaMulti-year development timeline for cardiac-specific instrumentation and force feedback integrationFDA clearance received for non-force feedback cardiac instruments on DaVinci 5 in U.S.

Robbie Marcus · JP Morgan

Requested detailed breakdown of gross margin and OPEX guidance drivers, including impact of XIR ramp, trade-ins, and assumptions at high/low end of expense ranges.

Management detailed multiple offsetting gross margin dynamics: higher trade-ins, DaVinci 5 not yet at target costs, product cost reductions, new facility depreciation, and 120 basis points tariff headwind in 2026 vs. 65 bps in 2025. XIR margins described as healthy despite lower pricing than new XI. OPEX guidance of 11-15% reflects procedure range variance and Italy/Spain/Portugal go-direct costs.

2026 gross margin guidance: 67-68% (vs. 67.6% in 2025)120 basis points tariff impact forecast for 2026 (vs. 65 bps in 2025)50 basis points incremental tariff headwind year-over-yearXIR pricing lower than new XI but with healthy margins

David Roman · Goldman Sachs

Inquired about SP platform inflection drivers, technology gaps (vessel sealer), instrument portfolio completeness, and macro headwind impact observed in Q4 2025 and early January.

Management expressed encouragement with SP technology adoption and procedure growth; identified remaining development needs (vessel sealer clearance, global stapler clearances) and international expansion opportunity. On macro: explicitly stated no evidence of impact from Medicaid/exchange subsidy concerns in Q4 or recent customer feedback, contradicting Q3 pullforward discussion.

SP procedures grew 87% in 2025 with 78% growth in Q4Positive early feedback on SP stapler in thoracic and colorectalRemaining development: vessel sealer device clearance and global stapler approvals neededSP expansion ongoing in Europe, Japan, Taiwan, and U.S.

Rick Weiss · Stifel

Questioned significant increase in 'direct line of sight' procedures (7M in 2024 to 9M in 2026) and requested unpacking of drivers; also asked about digital subscription (MIA+) economics and adoption dynamics.

Management attributed procedure line-of-sight growth primarily to strengthening clinical validation and supportive economics in benign procedures, modest impact from new clearances (nipple sparing mastectomy, SP in U.S.), and demographic tailwinds. On MIA+: explained subscription model activation starting Q2 2026 when free trial period ends; accounting treatment (deferral of system revenue portion to service revenue); positive early customer feedback but work remaining on case insights refinement.

Direct line of sight procedures: 7M (2024) → 8M (2025) → 9M (2026)Primary driver: strengthening clinical validation and economics in benign proceduresSecondary drivers: new procedure clearances, demographic aging impactMIA+ subscription activation beginning Q2 2026 as free trial expires

Larry Bigelson · Wells Fargo

Asked to expand on ASC opportunity size, key procedures migrating to ASCs, and required capabilities/economics to unlock growth; also inquired about 2026 utilization and system ASP implications.

Management framed ASC opportunity around customer needs (clinical outcomes, reliability, routine infrastructure, aligned economics) and identified cholecystectomy, hernia repair, benign GYN as core procedures. Noted ASC procedures currently small but growing at accretive rate; XIR with refurbished XI positioning well-suited for lower-acuity, high-volume environment. On ASPs: declined to predict 2026 direction but identified offsetting dynamics (higher DV5 mix, higher XIR mix at lower ASPs, higher trade-ins); ~half of placements are purchases subject to ASP variability.

ASC procedures today represent small proportion of U.S. total but growing at accretive rateTarget procedures: cholecystectomy, hernia repairs, benign GYN (lower acuity, high-volume repeatable)Approximately 70% of ASC procedure opportunity is in ASCs affiliated with existing IDN customersXIR positioned as core vehicle for ASC expansion given lower capital requirements and healthy margins

Answers to last quarter's watch list

Whether FY2025 procedure growth lands at or above the new 17–17.5% guide top end — FY2025 da Vinci procedures grew ~18% to 3,153k, above the 17.5% upper bound. Status: Resolved positively

DV5 share of placements above 60% — Q4 DV5 mix was 57% (303/532); FY2025 DV5 mix was 51% (870/1,721). Below the 60% threshold being monitored. Status: Resolved (below threshold)

Non-GAAP gross margin landing inside or above the new 67–67.5% FY band — FY2025 non-GAAP GM was 67.6%, above the upper bound of the raised Q3 guide. Status: Resolved positively

CFO replacement and continuity of guidance architecture — A new CFO transition was not explicitly addressed. The FY-only guidance cadence held and a full quantitative FY2026 package was issued, but the OPEX band widened from 11–13% (FY2025) to 11–15% (FY2026). The architecture is intact but loosening at the edges. Status: Continue monitoring

Tariff line at 0.7% ±10bps holding through Q4 — FY2025 tariff drag was ~65bps (within the prior band). FY2026 tariff drag steps up to ~120bps — a +55bps increment. The 2025 line held; the 2026 setup is materially worse. Status: Resolved negatively for 2026

Europe CE mark for DV5 by end of 2025 and Japan regulatory clarity — DV5 was launched in Europe, the UK, and Japan in the second half of 2025, with 58 DV5 systems placed OUS in the year. The Japanese Ministry of Health is in the final stages of evaluating reimbursement for additional robotic procedures starting June 2026. Status: Resolved positively (DV5 launches); Continue monitoring (Japan reimbursement)

What to watch into next quarter

Whether FY2026 da Vinci procedure growth tracks toward the 15% upper bound or the 13% lower bound — the midpoint implies ~400bps of deceleration vs. 2025's ~18%. ACA premium subsidy changes, Medicaid funding, European capital pressure, China competitive intensity, and obesity pharmaceutical products are the cited swing factors.

Whether the 120bps 2026 tariff drag holds or expands — Q3's 70bps figure proved durable in 2025 actuals; the 2026 line nearly doubles. A walk-up of the 120bps midpoint or a wider uncertainty band on subsequent calls would signal further deterioration.

DV5 mix trajectory in 2026 — Q4 DV5 mix was 57% and FY2025 was 51%. Management flagged "higher DV5 mix in 2026" but did not commit to a level; mix above 65% in Q1 or Q2 prints would validate the broad-launch absorption thesis.

OPEX growth landing inside the 11–15% FY2026 band, with the actual print closer to 11% than 15% — the upper-bound widening from FY2025's 13% to FY2026's 15% is the single biggest implicit operating-leverage concession in this quarter's guide.

SP vessel-sealer clearance and global stapler approvals — SP stapler is moving to broad launch this quarter; SP procedure growth of 87% in 2025 has more runway only if additional clearances arrive.

China tender win ratio recovery — Q4 win ratio fell on local-supplier preference and pricing pressure; ~273 systems remain in the current quota.

Japan reimbursement outcome in June 2026 — additional robotic procedure reimbursement is in final evaluation; an update is expected on the next earnings call.

Sources

Intuitive Surgical Q4 2025 earnings pre-release, filed with SEC (https://www.sec.gov/Archives/edgar/data/1035267/000103526726000003/q425ex-992q4prereleaseq4on.htm)
Intuitive Surgical Q4 2025 earnings call prepared remarks and Q&A (analyst exchanges with Bank of America, Wells Fargo, JP Morgan, Stifel)

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