Intuitive Surgical Q1 Earnings Call Highlights

Key Points

• Total procedures rose 17%, driven by da Vinci (up 16% to 847,000) and Ion (up 39% to 43,000); the company placed 431 da Vinci systems (232 da Vinci 5) and SP procedures jumped 68%, though China and Japan showed continued headwinds.
• Q1 revenue increased 23% to $2.77 billion with a non-GAAP operating margin of 39% and non-GAAP EPS of $2.50; Intuitive finished the quarter with $8 billion in cash after $1.1 billion of buybacks and raised its 2026 da Vinci procedure growth outlook to 13.5%–15.5%.
• Product and clinical progress includes FDA clearances expanding da Vinci 5 force‑feedback instrument uses, strong Mayo Clinic data for Ion, and a stated AI roadmap leveraging unique video/force/kinematic data toward anatomy ID and automation, while a contained cyber incident did not materially disrupt operations.

Intuitive Surgical NASDAQ: ISRG reported what CEO Dave Rosa described as “a solid start to the year” in the first quarter, driven by procedure growth across its da Vinci surgical systems and Ion endoluminal platform, along with higher revenue and margins.

Procedure growth led by da Vinci and Ion

Rosa said total procedures rose 17% in the quarter, supported by broad-based adoption as customers “continue to advance minimally invasive care.” da Vinci procedures increased 16% to 847,000, while Ion procedures climbed 39% to 43,000.

Performance was strongest in the U.S. and Europe, with “mixed results” in Asia, according to Rosa. In the U.S., da Vinci procedures grew 14% year over year, led by general surgery. Rosa highlighted a 31% increase in after-hours procedures and higher overall utilization. He also said da Vinci 5 utilization continues to exceed da Vinci Xi, helping drive U.S. utilization growth to 4%.

Outside the U.S., da Vinci procedures rose 19%, with strength in general surgery and gynecology as adoption expands beyond urology. However, both Rosa and CFO Jamie Samath pointed to continued headwinds in China and Japan.

In China, Rosa said the environment remains consistent with recent quarters, citing “relatively low tender activity across the category, domestic competition, and policy-driven pricing pressure.” Samath added that China procedure growth was below the corporate average due to “lower tenders” and competitive and pricing pressures, noting that discussions on potential new charge code and reimbursement policies are ongoing but that the company does not expect clarity “until 2027.”

In Japan, Rosa said procedure growth improved sequentially but remained below historical levels following fewer system placements in 2025. Samath said Japan procedure growth was also below the company average, reflecting lower capital placements over several quarters, though he pointed to policy developments the company views as supportive beginning in June 2026.

System placements and platform updates

Intuitive placed 431 da Vinci systems in the quarter, including 232 da Vinci 5 systems, 34 SP systems, and 34 Xi-R systems, Rosa said. The company also placed 52 Ion systems.

Samath said the installed base of da Vinci 5 is now “almost 1,500 systems” used by “almost 13,000 surgeons” since launch. He also said customers acquired 34 refurbished Xi systems in Q1, compared with two in the year-ago quarter, with most refurbished placements outside the U.S. in cost-sensitive segments. Trade-in activity also rose, with 119 trade-in transactions in Q1 versus 67 a year ago, “primarily driven by U.S. customers upgrading to da Vinci 5,” Samath said.

On da Vinci 5, Rosa highlighted progress in force feedback instrumentation. He said Intuitive received FDA 510(k) clearance in March for additional uses of force feedback instruments, with five of six instruments now cleared for 15 uses and the Mega SutureCut needle driver cleared for 10 uses. Rosa said the clearance, together with supply chain and manufacturing investments, supports broader availability in Q2 that will increase over the rest of the year.

Intuitive also discussed its digital and AI roadmap. In response to an analyst question, Rosa said the company’s approach to AI is guided by whether it advances the “Quintuple Aim,” and he outlined a layered strategy starting with high-quality data (including video, kinematic, and force data, as well as connected electronic medical records), turning that into insights, and delivering it to customers “in a consumable fashion” and “at the right time.” He cited early examples such as AI-enabled anatomy identification and longer-term opportunities such as augmented dexterity and aspects of automation, including camera control assistance. Rosa said Intuitive’s scale and “unique data sets,” including those enabled by force feedback, provide differentiation over the next “three to five years.”

For the single-port platform, Rosa said SP procedure momentum continued, with procedures up 68% year over year, driven by growth in Korea and the U.S. and early adoption in select international markets. He also noted the first U.S. non-IDE nipple-sparing mastectomy cases and said the single-port stapler has moved into broad launch. Samath added that in the U.S., the SP stapler was used in “almost 40% of cases where we would expect a stapler to be used,” and that the company plans a measured launch in Korea and Europe in Q2 as manufacturing capacity expands.

Financial results and margins

Samath said Q1 revenue increased 23% to $2.77 billion, while recurring revenue rose 23% to $2.4 billion, representing 86% of total revenue. On a constant currency basis, revenue growth was 22%. Non-GAAP operating margin was 39%, which Samath said primarily reflected leverage of fixed costs.

Non-GAAP net income rose to $901 million from $662 million a year earlier, and non-GAAP earnings per share increased to $2.50 from $1.81. On a GAAP basis, net income was $822 million, or $2.28 per share, compared with $698 million, or $1.92 per share, in the year-ago quarter.

Systems revenue grew 24% to $651 million. Samath said leasing represented 56% of da Vinci placements versus 47% in the prior quarter and 54% a year ago, driven by customer preference. The average selling price for purchased da Vinci systems was $1.7 million, up from $1.6 million last year, reflecting a higher mix of da Vinci 5 and dual console systems, partially offset by higher trade-ins.

Intuitive’s non-GAAP gross margin was 67.8%, up from 66.4% in the year-ago quarter. Samath said the improvement reflected product cost reductions and fixed overhead leverage, partly offset by tariffs. He added that da Vinci 5 achieved contribution margins comparable with Xi in the quarter, and Ion contribution margins were “close to the corporate average.”

The company ended the quarter with $8 billion in cash and investments, down from $9 billion in the prior quarter, driven by $1.1 billion in stock repurchases, the acquisition of its distributor business in Italy, Spain, and Portugal, and $103 million in capital expenditures, partially offset by cash generated from operations and employee equity activity.

Cyber incident disclosure

Samath also addressed a cyber incident in the first quarter that resulted in unauthorized access to some customer business and contact information, as well as certain Intuitive employee and corporate data in certain IT business applications. He said the incident did not disrupt business or manufacturing operations, did not affect products, and did not have a significant impact on first quarter financial results. Samath said Intuitive contained the incident, notified customers, informed data privacy regulators, and is taking steps to strengthen cybersecurity protocols.

Clinical update and 2026 outlook

During the call, the company highlighted a Mayo Clinic publication covering 2,115 peripheral pulmonary lesions biopsied in 1,904 patients using Ion alongside mobile cone-beam CT, spanning July 2019 through August 2024. Intuitive said the study reported a diagnostic yield of 79% using the ATS/ACCP consensus statement definition and sensitivity of malignancy of 85%, with a pneumothorax requiring intervention rate of 1.4% and severe bleeding rate of 0.3%. The company also noted that 74% of patients had concurrent endobronchial ultrasound lymph node staging, and that the rate of early-stage primary lung cancer diagnosis increased from 46% in 2019 to 69% in 2024 in the study population.

Intuitive raised its full-year 2026 da Vinci procedure growth outlook. Daniel Oh, vice president of investor relations, said the company now expects da Vinci procedure growth of 13.5% to 15.5%, up from a prior range of 13% to 15%. The updated range continues to reflect several uncertainties, including potential impacts from changes to ACA premium subsidies, capital pressures in parts of Europe, tender volumes and competitive intensity in China, capital challenges in Japan, and obesity management pharmaceuticals.

Oh also updated non-GAAP gross margin expectations to 67.5% to 68.5% of revenue, compared with the prior outlook of 67% to 68%. The updated range reflects an estimated 100 basis points of tariff impact (previously 120 basis points) and higher input costs including freight and semiconductor memory. The company expects non-GAAP operating expense growth of 11% to 14%, non-cash stock compensation expense of $890 million to $920 million, other income of $315 million to $335 million, and a non-GAAP tax rate of 22% to 23%.

Separately, Rosa announced a leadership transition, noting that Chief Medical Officer Dr. Myriam Curet is retiring after more than 20 years with the company, and that Dr. Jaime Wong has been promoted to chief medical officer and will lead the global medical office overseeing training, clinical evidence generation and research, and reimbursement and market access efforts.

About Intuitive Surgical NASDAQ: ISRG

Intuitive Surgical, founded in 1995 and headquartered in Sunnyvale, California, is a medical technology company focused on the design, manufacture and service of robotic-assisted surgical systems. The company is best known for its da Vinci surgical systems, which enable minimally invasive procedures by translating a surgeon's hand movements into finer, scaled motions of small instruments inside the patient. Intuitive's business centers on supplying hospitals and surgical centers with systems, instruments and related technologies that aim to improve precision, visualization and control in the operating room.

In addition to its core surgical platforms, Intuitive markets a portfolio of reusable and disposable instruments, accessories, and proprietary software, and provides training, servicing and clinical support to its customers.

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