Intuitive Surgical, Inc.
ISRG · Nasdaq
Next quarter
Reports Oct 20, 2026.
Consensus is $2.13 EPS for Sep 2026 across 8 estimates, ranging $2.05 to $2.25.
ISRG Jun 2026
- 17.33%
- -14.15%
- $2.02
- $2.37
- —
- $2.89B
Reported results
- $2.89B
- 67.78%
- $971.90M
- 33.60%
- $818.10M
- $2.29
Highlights
- Revenue: Q2 revenue increased 19% year over year to $2.89 billion, up from $2.44 billion, and 4% sequentially from $2.77 billion in Q1.
- Earnings: The supplied consensus comparison shows EPS of $2.37 versus a $2.02 expectation, a 17.33% surprise; the release reports GAAP diluted EPS of $2.29 and non-GAAP diluted EPS of $2.80.
- Procedure growth: Combined da Vinci and Ion procedures grew approximately 16%, with da Vinci procedures up 15% to approximately 889,000 and Ion procedures up 36% to approximately 47,900.
- System placements: Da Vinci placements rose 18% to 468 systems, including 246 da Vinci 5 systems versus 180 a year ago; the installed base reached 11,710, up 12%.
- Recurring revenue: Instruments and accessories revenue grew 18% to $1.73 billion, while services revenue rose 21% to $472.4 million, reflecting procedure growth and the larger installed base.
- Profitability: GAAP operating income increased 31% year over year to $971.9 million, while GAAP operating margin expanded to 33.6% from 30.5%; gross margin rose to 67.8% from 66.3%.
- Tariff benefit: Q2 GAAP and non-GAAP earnings included an $0.08-per-share, $28 million after-tax benefit from refunds of prior-period IEEPA tariffs; tariffs and trade measures still cost $20.8 million in the quarter.
- Capital allocation: Intuitive repurchased 0.9 million shares for $379 million in Q2, leaving $4.7 billion authorized, while cash, cash equivalents, and investments ended at $8.63 billion.
- International expansion: The company’s $533.1 million acquisition of distribution businesses in Italy, Spain, Portugal, Malta, San Marino, and related territories shifted those markets to a direct-sales model.
Analysis
Intuitive Surgical’s second quarter was another strong growth print, led by procedure volume, da Vinci 5 adoption, and recurring instruments, accessories, and service revenue. Revenue of $2.89 billion rose 19% from $2.44 billion a year ago and 4% from $2.77 billion in Q1. GAAP net income was $818.1 million, up 24% year over year but essentially flat sequentially versus $821.5 million, while diluted GAAP EPS increased to $2.29 from $1.81 a year ago and $2.28 in Q1. The supplied expectation data identifies reported EPS of $2.37 versus a $2.02 consensus, a 17.33% surprise; the company’s release separately reports non-GAAP EPS of $2.80.
The operational core remained healthy: da Vinci procedures grew 15%, Ion procedures 36%, and total da Vinci placements 18% to 468. Profitability also improved, with operating income up 31% and GAAP operating margin rising to 33.6%. However, the quarter included a $28 million after-tax tariff-refund benefit, and the outlook continues to assume a 1.0% of revenue tariff drag on full-year non-GAAP gross margin. The company also completed its Iberian and Italian distribution acquisition, while maintaining substantial buybacks and ending the quarter with $8.63 billion of cash and investments.
Procedure-led revenue growth
The recurring economics of the installed base continued to drive the quarter. Instruments and accessories revenue increased 18% to $1.73 billion, primarily reflecting 15% da Vinci procedure growth and 36% Ion procedure growth. Services revenue rose 21% to $472.4 million as the system base expanded. Operating lease revenue increased to $261.8 million from $213.8 million, including $168.8 million of usage-based revenue versus $130.0 million a year ago.
- Da Vinci: Approximately 889,000 procedures were performed, up 15% year over year, with utilization per system increasing 3%. U.S. procedures grew 12%, while OUS procedures grew 20%.
- Ion: Approximately 47,900 procedures were performed, up 36%, supported by a 21% increase in the installed base to 1,096 systems.
- Geographic mix: U.S. revenue grew 19% to $1.93 billion, while OUS revenue grew 18% to $959.1 million; OUS markets represented 33% of total revenue.
Da Vinci 5 adoption
System demand accelerated, with 468 da Vinci systems placed compared with 395 a year ago. Da Vinci 5 accounted for 246 placements, up from 180, indicating that replacement and upgrade activity is becoming an increasingly important part of system demand. Of total da Vinci placements, 254 were under operating leases, or 54%, versus 193, or 49%, a year ago. The higher lease mix supports recurring revenue but can reduce upfront systems revenue recognition relative to a conventional sale.
- Installed base: The da Vinci installed base reached 11,710 systems, up 12% from 10,488 a year ago.
- Regional placements: The company placed 267 systems in the U.S. and 201 outside the U.S.; OUS demand remained particularly strong in Europe and Asia.
- China: Placements were below the company’s expectations because of domestic competition, industrial-policy measures, and delays associated with heightened scrutiny of healthcare tenders.
Margins and tariff effects
Operating leverage was a major feature of the print. GAAP gross profit increased to $1.96 billion from $1.62 billion, lifting gross margin to 67.8% from 66.3%. GAAP operating income rose 31% to $971.9 million despite operating expenses increasing to $988.5 million from $874.5 million. Non-GAAP operating income was $1.22 billion, up from $946.6 million.
- Underlying cost pressure: Tariffs and other trade measures were $20.8 million in Q2, while a $35.9 million pre-tax refund of prior IEEPA tariffs reduced cost of revenue.
- Earnings benefit: The tariff refund contributed $28 million after tax, or $0.08 per diluted share, to both GAAP and non-GAAP earnings.
- Full-year framework: Intuitive continues to expect 2026 da Vinci procedure growth of approximately 13.5% to 15.5%, non-GAAP gross margin of 68.0% to 69.0%, including a 1.0% tariff impact, and non-GAAP operating expense growth of 11% to 13%.
European distribution acquisition
The March acquisition of the da Vinci and Ion distribution businesses previously operated by ab medica, Abex, Excelencia Robótica, and affiliates established direct commercial operations across Italy, Spain, Portugal, Malta, San Marino, and associated territories. The transaction cost approximately $533.1 million in cash, net of the settlement of existing receivables. Its reported contribution to current-period revenue and earnings was not significant, but the acquired customer relationships and distribution rights should give Intuitive greater control over sales, service, and market development in these regions.
- Purchase accounting: The company recorded $218.0 million of goodwill and $219.4 million of acquisition-related intangible assets, primarily customer relationships valued at $195.5 million.
- Balance-sheet effect: Goodwill rose to $580.6 million from $370.3 million at year-end, while acquisition-related amortization contributed $24.0 million of Q2 expense.
- Strategic rationale: Intuitive cited operational synergies, the acquired workforce, and the benefit of establishing a direct presence in markets previously served through distributors.
Cash and share repurchases
Intuitive remained highly cash generative while funding the distribution acquisition and increased repurchases. Operating cash flow was $1.97 billion in the first six months, up from $1.30 billion a year earlier, although inventory increased to $2.03 billion from $1.84 billion at year-end.
- Liquidity: Cash, cash equivalents, and investments totaled $8.63 billion at June 30, down from $9.03 billion at December 31, 2025, primarily because of the acquisition and repurchases.
- Repurchases: The company bought back 0.9 million shares for $379 million in Q2 at an average price of $438.68; six-month repurchases totaled $1.51 billion.
- Authorization: The April 2026 authorization increased remaining repurchase capacity to approximately $4.7 billion at quarter-end.
