Intuitive Surgical Inc.
10/22/2025 | Press release | Distributed by Public on 10/22/2025 15:19
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition as of September 30, 2025, and results of operations for the three and nine months ended September 30, 2025, and 2024, should be read in conjunction with management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to expectations concerning matters that are not historical facts. Statements using words such as "estimates," "projects," "believes," "anticipates," "plans," "expects," "intends," "may," "will," "could," "should," "would," "targeted," and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements related to future results of operations, future financial condition, our financing plans and future capital requirements, our potential tax assets or liabilities, and statements based on current expectations, estimates, forecasts, projections, and assumptions about the economies and geographic markets in which we operate and our beliefs and assumptions regarding these economies and markets. These forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements should be considered in light of various important factors, including, but not limited to, the following: the overall macroeconomic environment, which may impact customer spending and our costs, including tariffs, the levels of inflation, and interest rates; the conflict between Ukraine and Russia; conflicts in the Middle East; disruption to our supply chain, including difficulties in obtaining a sufficient supply of materials; curtailed or delayed capital spending by hospitals; the impact of global and regional economic and credit market conditions on healthcare spending; delays in obtaining new product approvals, clearances, or certifications from the Food and Drug Administration ("FDA"), comparable regulatory authorities, or notified bodies; the risk of our inability to comply with complex FDA and other regulations, which may result in significant enforcement actions; regulatory approvals, clearances, certifications, and restrictions or any dispute that may occur with any regulatory body; healthcare reform legislation in the U.S. and its impact on hospital spending, reimbursement, and fees levied on certain medical device revenues; changes in hospital admissions and actions by payers to limit or manage surgical procedures; the timing and success of product development and customer acceptance of developed products; the results of any collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships, including the joint venture with Shanghai Fosun Pharmaceutical (Group) Co., Ltd.; our completion of and ability to successfully integrate acquisitions; intellectual property positions and litigation; risks associated with our operations and any expansion outside of the U.S.; unanticipated manufacturing disruptions or the inability to meet demand for products; our reliance on sole- and single-sourced suppliers; the results of legal proceedings to which we are or may become a party; adverse publicity regarding us and the safety of our products and adequacy of training; the impact of changes to tax legislation, guidance, and interpretations; changes in tariffs, trade barriers, and regulatory requirements (including changes to tariffs imposed by the U.S. on imports from various countries, including Mexico, where we currently manufacture a significant majority of our instruments and accessories, Germany, where we currently manufacture a majority of our endoscopes, and China, where we currently import certain materials); and other risks and uncertainties, including those listed under the caption "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report and which are based on current expectations and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those risk factors described throughout this filing and identified under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, as updated by our other filings with the Securities and Exchange Commission ("SEC"). Our actual results may differ materially and adversely from those expressed in any forward-looking statement, and we undertake no obligation to publicly update or release any revisions to these forward-looking statements, except as required by law.
Product and brand names and logos, including Intuitive, da Vinci, and Ion, are trademarks or registered trademarks of Intuitive Surgical, Inc. or one of its subsidiaries or of their respective owners. Additional information about our trademarks can be found on our website at www.intuitive.com/trademarks. Although we reference our trademarks located on our website, this list of trademarks and any other materials on our corporate website are not incorporated by reference into this Form 10-Q or any of our other filings under the Securities Act of 1933, as amended, or the Exchange Act.
Overview
As part of our mission, we believe that minimally invasive care is life-enhancing care. Since our founding 30 years ago, we have been delivering on this mission by combining innovative technology with clinical expertise to advance minimally invasive care. We do so by providing a comprehensive ecosystem that includes robotic-assisted systems, instruments and accessories, customer learning, and support services all connected by a digital portfolio that enables actionable insights across the care continuum.
To ensure continued alignment with the patients and healthcare communities we serve, we have adopted the Quintuple Aim as our "north star." Starting foremost with a focus on patients, we seek to demonstrate that our products can deliver better outcomes that are validated by rigorous peer-reviewed evidence. Second, we aim to work with clinicians and care teams to create better patient experiences that enable patients to more quickly get back to what matters most in their lives, with fewer complications, less pain and discomfort, and greater predictability. Third, we aim to enable the care teams who use our platforms and technology-enabled ecosystem to have better experiences that augment their skills while reducing fatigue and increasing efficiency and reliability. Fourth, we aim to help lower the total cost of care per patient episode when compared with existing treatment alternatives, providing a return on investment for hospitals and healthcare systems and value for payers. Lastly, we aim to expand access to high-quality minimally invasive care by partnering with hospitals, healthcare systems, and patient advocacy groups to address barriers to care.
While surgery and acute interventions have improved significantly in the past few decades, there remains a significant need to improve across all aspects of the Quintuple Aim. Stakeholders continue to expect better clinical outcomes and decreased variability of outcomes across clinicians and care teams. Globally, some healthcare systems continue to be stressed and lacking in critical resources, including the professionals who staff care teams. At the same time, healthcare providers, payers, and governments strain to cover the healthcare needs of their aging populations and demand lower total cost per patient to treat disease. In the face of these challenges, we continue to believe that we are well-positioned to synthesize scientific and technological advances in biology, computing, imaging, algorithms, and robotics to deliver meaningful and measurable value to all of our stakeholders.
Globally, open surgery remains a prevalent form of surgery and is used in almost every area of the body. However, the large incisions required for open surgery create trauma to patients, typically resulting in longer hospitalization and recovery times, increased hospitalization costs, and additional pain and suffering relative to minimally invasive surgery ("MIS"), where MIS is available. For over four decades, MIS has reduced trauma to patients by allowing selected surgeries to be performed through small ports rather than large incisions. MIS has been widely adopted for certain surgical procedures.
Da Vinci surgical systems enable surgeons to extend the benefits of MIS to many patients who would otherwise undergo a more invasive surgery by using computational, robotic, and imaging technologies to overcome many of the limitations of traditional open surgery or conventional MIS. Surgeons using a da Vinci surgical system operate while seated comfortably at a console viewing a 3D, high-definition image of the surgical field. This immersive console connects surgeons to the surgical field and their instruments. While seated at the console, the surgeon manipulates instrument controls in a natural manner, similar to open surgical technique. Our technology is designed to provide surgeons with a range of articulation of the surgical instruments used in the surgical field analogous to the motions of a human wrist, while filtering out the tremor inherent in a surgeon's hand. In designing our products, we focus on making our technology easy and safe to use.
Our da Vinci products fall into five broad categories: da Vinci surgical systems, da Vinci instruments and accessories, da Vinci stapling, da Vinci energy, and da Vinci vision, including Firefly fluorescence imaging systems and da Vinci endoscopes. We provide a comprehensive suite of systems, learning, and services offerings. Digitally enabled for nearly three decades, these three offerings aim to decrease variability by providing dependable, consistent functionality and an integrated user experience. Our systems category includes robotic platforms, software, vision, energy, and instruments and accessories. Our learning category includes learning and enabling technology, such as simulation and telepresence, as well as technical training programs and personalized peer-to-peer learning opportunities. We have a global network of field service engineers and distributors through which we deliver a suite of services, including installation, repair, maintenance, around-the-clock technical support, and system monitoring. We also offer customized analytics and consultation to hospitals for program optimization.
We have commercialized the following da Vinci surgical systems: the da Vinci standard surgical system in 1999, the da Vinci S surgical system in 2006, the da Vinci Si surgical system in 2009, the fourth-generation da Vinci Xi surgical system in 2014, and the fifth-generation da Vinci 5 surgical system in 2024. We extended our fourth-generation platform by adding the da Vinci X surgical system, commercialized in 2017 and targeted at more cost-sensitive markets.
In March 2024, we obtained FDA clearance for our da Vinci 5 surgical system, our next-generation multi-port robotic system, for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac and pediatric indications. In October 2024, we obtained regulatory clearance in South Korea for the da Vinci 5 surgical system for use in urologic, general, gynecologic, thoracoscopic, thoracoscopically-assisted cardiotomy, and transoral otolaryngology surgical procedures. In June 2025, we obtained regulatory clearance in Japan for the da Vinci 5 surgical system for use in all surgical specialties and
procedures indicated for da Vinci Xi, except for cardiac indications. In July 2025, we obtained European certification in accordance with the EU MDR for the da Vinci 5 surgical system for adult and pediatric use in minimally invasive endoscopic procedures across abdominopelvic and thoracoscopic surgical procedures, including urologic, gynecologic, and general laparoscopic procedures, excluding the use of force feedback. We intend to seek European certification for the use of force feedback in the future. In our markets outside of the U.S. ("OUS"), we are in the midst of a phased launch of our da Vinci 5 surgical system, which we expect to extend over several quarters, giving us time to mature our supply and manufacturing processes for the new system. As of September 30, 2025, we have an installed base of 929 da Vinci 5 surgical systems.
Additionally, we extended our fourth-generation platform by adding the da Vinci SP surgical system, commercialized in 2018. The da Vinci SP surgical system accesses the body through a single incision, while the other da Vinci surgical systems access the body through multiple incisions. All da Vinci systems include a surgeon's console (or consoles), imaging electronics, a patient-side cart, and computational hardware and software.
We are in the early stages of launching our da Vinci SP surgical system and have an installed base of 343 da Vinci SP surgical systems as of September 30, 2025. We have received FDA clearance for the da Vinci SP surgical system for urologic, colorectal, general thoracoscopic, and certain transoral procedures. Additionally, the da Vinci SP surgical system has received regulatory clearance in South Korea for a broad set of procedures. The da Vinci SP surgical system has also received regulatory clearance in Japan for the same set of procedures that are currently allowed with the da Vinci Xi surgical system in Japan. In January 2024, the da Vinci SP surgical system received European certification in accordance with Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices (the "EU MDR") for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, and breast surgical procedures, and we are commercializing the da Vinci SP surgical system in select major European countries as part of a measured rollout. In August 2024, we obtained regulatory clearance in Taiwan for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, transanal total mesorectal excision, and breast surgical procedures. We plan to seek FDA clearances for additional indications for the da Vinci SP surgical system and expand the system's regulatory approvals (including for additional indications) in other OUS markets over time. The success of the da Vinci SP surgical system is dependent on positive experiences and improved clinical outcomes for the procedures for which it has been cleared as well as securing additional clinical clearances.
We offer approximately 70 different multi-port da Vinci instruments to provide surgeons with flexibility in choosing the types of tools needed to perform a particular surgery. These multi-port instruments are generally robotically controlled and provide end effectors (tips) that are similar to those used in either open or laparoscopic surgery. We offer advanced instrumentation for the da Vinci 5, da Vinci X, and da Vinci Xi surgical systems, including da Vinci energy and da Vinci stapler products, to provide surgeons with sophisticated, computer-aided tools to precisely and efficiently interact with tissue. The da Vinci 5, da Vinci X, and da Vinci Xi surgical systems generally share the same instruments, whereas the da Vinci Si surgical system uses instruments that are not compatible with the da Vinci 5, da Vinci X, and da Vinci Xi systems. Additionally, we have introduced a unique set of force feedback instruments that are only compatible with our da Vinci 5 surgical system. We also currently offer 16 core instruments on our da Vinci SP surgical system. We plan to expand our da Vinci SP instrument offering over time.
Our learning and enabling technology offerings facilitate access to education and training on our products. Our enabling technologies include telepresence and Advanced Insights Suite (which includes Case Insights and Insights Engine), and our learning technology solutions include Intuitive Learning, SimNow, customized training models, remote case observations, and remote proctoring.
In 2019, we commercialized our Ion endoluminal system, which is a flexible, robotic-assisted, catheter-based platform that utilizes instruments and accessories for which the first cleared indication is minimally invasive biopsies in the lung. Our Ion system extends our commercial offering beyond surgery into diagnostic, endoluminal procedures. The system features an ultra-thin, ultra-maneuverable catheter that can articulate 180 degrees in all directions and allows navigation far into the peripheral lung and provides the stability necessary for precision in a biopsy. Many suspicious lesions found in the lung may be small and difficult to access, which can make diagnosis challenging, and Ion helps physicians obtain tissue samples from deep within the lung, which could help enable earlier diagnosis. Our Ion endoluminal system has received FDA clearance, and OUS regulatory clearances include European certification in accordance with the EU MDR, regulatory clearance in South Korea, and National Medical Products Administration ("NMPA") regulatory clearance in China. We plan to seek additional clearances, approvals, and certifications for our Ion endoluminal system in OUS markets over time.
The success of new product introductions depends on a number of factors including, but not limited to, pricing, competition, geographic market and consumer acceptance, the effective forecasting and management of product demand, inventory levels, the management of manufacturing and supply costs, and the risk that new products may have quality or other defects in the early stages of introduction.
Trade and Tariffs Update
Beginning in 2025, the U.S. imposed new tariffs on imports from various countries including Mexico, Germany, and China, among others. We currently manufacture a significant majority of our instruments and accessories in Mexicali, Mexico, most of which qualify as originating under the United States-Mexico-Canada Agreement ("USMCA") and, therefore, have not been subject to recently imposed tariffs. We also import certain raw materials and finished goods from outside of the U.S. that are subject to tariffs, including our endoscopes, a majority of which are manufactured in Germany. In addition, our operations involve importing certain raw materials from China, importing sub-assemblies to support our local da Vinci Xi surgical system manufacturing in China, and selling U.S.-manufactured da Vinci Xi surgical systems into China. These imports into the U.S. and China are subject to tariffs, which we expect to have an adverse impact on the product cost of our da Vinci Xi surgical system in China.
Some of our suppliers have also incurred incremental tariffs and have passed or may pass on those additional costs to us. These pass-through tariffs and other specific tariff actions against steel and aluminum, critical minerals, semiconductors, and other products have not had a material direct impact on our operations to date, but the long-term effect of these and other existing and future tariff actions is difficult to predict.
U.S. tariffs have also given rise to trade measures by other countries, including additional restrictions on certain exports. These trade measures could impact the reliability and efficiency of our supply chain if they are imposed on materials important to our production operations. In particular, restrictions on the export of rare earth elements, including magnets, and critical minerals from China could potentially restrict access to components used in many of our products and could have a material adverse effect on our business, financial condition, or results of operations.
During the three and nine months ended September 30, 2025, tariffs and other trade measures have increased our cost of revenues by approximately $22 million and $37 million, respectively. Based on the announced and implemented global tariffs as of the date of this report, and assuming such tariffs remain in place, we expect increases to our cost of revenues driven by tariffs and other trade measures to continue to increase into the fourth quarter of 2025. Future changes to tariff rates and the imposition of new tariffs by the U.S. and/or other countries could result in a material impact to our results of operations. The ultimate impact of changes to tariffs and trade barriers will depend on various factors, including the timing, amount, scope, and nature of any tariffs or trade barriers that are implemented, all of which could have a material adverse effect on our business, financial condition, or results of operations.
Macroeconomic Environment
Our future results of operations and liquidity could be materially adversely affected by uncertainties surrounding macroeconomic and geopolitical factors both in the U.S. and globally. These uncertainties include any introduction or modification of tariffs or trade barriers, supply chain challenges, inflationary pressures, elevated interest rates, and disruptions in commodity markets stemming from conflicts, such as those between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran.
During the third quarter of 2025, we continued to experience isolated stresses to supply, particularly for specific component materials impacted by evolving trade requirements and at certain subcontract suppliers that were operationally challenged to meet our production requirements. These isolated instances did not have a material impact on our business during the third quarter of 2025. As a result of the escalation in tariffs, new country-specific trade requirements, and other trade measures between major economies, we may experience tariff-related inflation in raw materials costs as well as supply shortages as companies seek alternative sources of supply of critical materials and navigate adjustments in logistics and transportation routes.
Elevated interest rates may also impact the ability of certain suppliers to fund necessary investments in capacity and infrastructure. Any insolvency of certain suppliers, including sole- and single-sourced suppliers, may present heightened continuity risks. Additionally, although incidents of cybersecurity breaches have not significantly impacted our supply chain to date, they continue to be actively monitored to protect supply continuity. We are actively engaged in activities that seek to mitigate the impact of any supply chain risks and disruptions on our operations.
Some hospitals continue to experience challenges with staffing and cost pressures that could affect their ability to provide patient care. Additionally, certain hospitals are facing significant financial pressure as supply chain constraints and inflation have driven up operating costs and elevated interest rates have made access to credit more expensive. Hospitals may also be adversely affected by the liquidity concerns as a result of the broader macroeconomic environment. Any or all of these factors could negatively impact the number of da Vinci procedures performed or surgical systems placed and have a material adverse effect on our business, financial condition, or results of operations.
Remanufactured Instruments
Third parties have offered, and may continue to offer, instruments that have been modified to support the use of some of our limited-use instruments beyond their labeled life. We are aware that the FDA has granted 510(k) clearance for the remanufacturing of certain of these instruments for use with our da Vinci Si, da Vinci X, and da Vinci Xi surgical systems. To date, such offerings have not had a material impact on our revenues, but such activities could result in reduced revenue if these products have broader uptake as well as generate negative publicity for us if these products cause injuries and/or do not function as intended when used. Both of these possibilities could have a material adverse effect on our business, financial condition, or results of operations.
For further details on remanufactured instruments, refer to the "Products & Services - Da Vinci - Instruments" section of our corporate website. The inclusion of a reference to our corporate website in this filing does not include or incorporate by reference the information on our website into this Form 10-Q.
Business Model
Overview
We generate up-front revenue from the placement of da Vinci surgical systems through sales or sales-type lease arrangements and recurring revenue over time through fixed-payment or usage-based operating lease arrangements. We also earn recurring revenue from the sales of instruments, accessories, and services.
The da Vinci surgical system generally sells for between $0.7 million and $3.1 million (generally inclusive of one year of service), depending on the model, configuration, and geography, and represents a significant capital equipment investment for our customers when purchased. Our instruments and accessories have limited lives and will either expire or wear out as they are used in surgery, at which point they need to be replaced. We generally earn between $1,000 and $3,600 of instruments and accessories revenue per surgical procedure performed, depending on the type and complexity of the specific procedures performed and the number and type of instruments used. We typically enter into service contracts at the time systems are sold or leased at an annual fee between $100,000 and $225,000, depending on the configuration of the underlying system and the composition of the services offered under the contract. Our system sale arrangements generally include a five-year period of service, with the first year of service generally included in the selling price of the system. These service contracts have generally been renewed at the end of the initial contractual service periods.
We generate revenue from our Ion endoluminal system in a business model consistent with the da Vinci surgical system model described above. We generate up-front revenue from the placement of Ion systems through sales or sales-type lease arrangements and recurring revenue over time through fixed-payment or usage-based operating lease arrangements. We also earn recurring revenue from the sales of instruments, accessories, and services. The Ion endoluminal system generally sells for between $500,000 and $815,000 (generally inclusive of one year of service). Our instruments and accessories have limited lives and will either expire or wear out as they are used in procedures, at which point they need to be replaced. We typically enter into service contracts at the time systems are sold or leased at an annual fee between $55,000 and $80,000.
Additionally, as part of our ecosystem of products and services, we provide a portfolio of learning offerings and digital solutions. We do not currently generate material revenue from these offerings.
Recurring Revenue
Recurring revenue consists of instruments and accessories revenue, service revenue, and operating lease revenue. Recurring revenue increased to $7.04 billion, or 84% of total revenue in 2024, compared to $5.94 billion, or 83% of total revenue in 2023, and $4.92 billion, or 79% of total revenue in 2022.
Instruments and accessories revenue has grown at a faster rate than systems revenue over time. Instruments and accessories revenue increased to $5.08 billion in 2024, compared to $4.28 billion in 2023 and $3.52 billion in 2022. The increase in instruments and accessories revenue largely reflects continued procedure adoption.
Service revenue was $1.31 billion in 2024, compared to $1.17 billion in 2023 and $1.02 billion in 2022. The increase in service revenue was primarily driven by the growth of the base of installed da Vinci surgical systems producing service revenue. The installed base of da Vinci surgical systems grew 15% to approximately 9,902 as of December 31, 2024; 14% to approximately 8,606 as of December 31, 2023; and 12% to approximately 7,544 as of December 31, 2022.
We use the number of procedures, type of procedures, installed base, number of placements, and utilization of systems as metrics for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Management believes that these metrics provide meaningful supplemental information regarding our performance and certain of these metrics are indicators of the rate of adoption of our robotic-assisted medical procedures, as well as an indicator of future recurring revenue (including revenue from usage-based operating lease arrangements). These metrics facilitate management's internal comparisons of historical performance, and management believes that both management and investors benefit from
referring to them in assessing the Company's performance and when planning, forecasting, and analyzing future periods. Management believes that these metrics are useful to investors, because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and (2) they are used by institutional investors and the analyst community to help them analyze the performance of our business. The vast majority of our installed systems are connected via the internet. System logs can also be accessed by field engineers for systems that are not connected to the internet. We utilize certain methods that rely on information collected from the installed systems, as well as other information from agreements and discussions with our customers for determining these metrics that involve estimates and judgments, which are, by their nature, subject to substantial uncertainties and assumptions. Estimates and judgments for determining these metrics may be impacted over time by various factors, including system internet connectivity, hospital and distributor reporting behavior, inherent complexities in new agreements, changes in treatment modalities, and hospital and distributor reporting behavior. Such estimates and judgments are also susceptible to algorithmic or other technical errors. The relationship between these metrics and our revenues may fluctuate from period to period, and growth rates for each metric may not correspond to an increase in revenue. These operational metrics supplement our financial results prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP") and should be considered alongside, not as a replacement for, revenue and other financial measures.
Intuitive System Leasing
Since 2013, we have entered into sales-type and fixed-payment operating lease arrangements directly with certain qualified customers as a way to offer customers flexibility in how they acquire systems and expand their robotic-assisted programs while leveraging our balance sheet. These leases generally have commercially competitive terms as compared to other third-party entities that offer equipment leasing. We also enter into usage-based operating lease arrangements with qualified customers that have committed da Vinci programs where we charge for the system and service as procedures are performed, offering greater predictability in costs for customers. We believe that all of these alternative financing structures have been effective and well-received, and we are willing to expand the proportion of any of these structures based on customer needs and demand.
We include systems placed under fixed-payment and usage-based operating lease arrangements, as well as sales-type lease arrangements, in our system placement and installed base disclosures. We exclude operating lease-related revenue, including usage-based revenue, and Ion system revenue from our da Vinci surgical system average selling price ("ASP") computations.
The following table summarizes our system placements under leasing arrangements:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
|
Da Vinci System Placements under Leasing Arrangements
|
|||||||||||||||||
| Fixed-payment operating lease arrangements | 309 | 304 | 276 | ||||||||||||||
| Usage-based operating lease arrangements | 467 | 355 | 216 | ||||||||||||||
| Total da Vinci system placements under operating lease arrangements | 776 | 659 | 492 | ||||||||||||||
| % of Total da Vinci system placements | 51 | % | 48 | % | 39 | % | |||||||||||
| Sales-type lease arrangements | 88 | 45 | 99 | ||||||||||||||
| Total da Vinci system placements under leasing arrangements | 864 | 704 | 591 | ||||||||||||||
|
Ion System Placements under Leasing Arrangements
|
|||||||||||||||||
| Fixed-payment operating lease arrangements | 85 | 63 | 61 | ||||||||||||||
| Usage-based operating lease arrangements | 68 | 54 | 40 | ||||||||||||||
| Total Ion system placements under operating lease arrangements | 153 | 117 | 101 | ||||||||||||||
| % of Total Ion system placements | 56 | % | 55 | % | 53 | % | |||||||||||
| Sales-type lease arrangements | 4 | 5 | 11 | ||||||||||||||
| Total Ion system placements under leasing arrangements | 157 | 122 | 112 | ||||||||||||||
Operating lease revenue has grown at a faster rate than overall systems revenue and was $654 million, $501 million, and $377 million for the years ended December 31, 2024, 2023, and 2022, respectively, of which $338 million, $217 million, and $133 million, respectively, was variable lease revenue related to our usage-based operating lease arrangements. Variable lease revenue related to our usage-based operating lease arrangements has been included in our operating lease metrics herein.
Revenue for systems sold or placed under a sales-type lease arrangement is recognized upfront whereas revenue for fixed-payment operating lease arrangements is recognized on a straight-line basis over time. Therefore, in a period when the number of operating lease placements increases as a proportion of total system placements, total systems revenue is reduced, which can
create volatility in the systems revenue recognized in any given period. We generally set fixed-payment and usage-based operating lease arrangements' pricing at a modest premium relative to purchased systems reflecting the time value of money and, in the case of usage-based operating lease arrangements, the risk that system utilization may fall short of anticipated levels.
Revenue for usage-based operating lease arrangements is recognized as the system is used to perform procedures. Variable usage-based arrangements create better matching of reimbursements and cost for our customers. They also reduce our customers' overall risk and need for capital outlay. However, because the number of procedures performed in any given period can vary significantly for many reasons, including but not limited to healthcare emergencies, alternative treatment options, and patient preferences, revenue recognized from these arrangements can be highly volatile.
Customers generally do not have the right to exit or terminate a fixed-payment lease without incurring a penalty. Generally, lease transactions generate similar gross profit margins as our sale transactions. However, because of the variability in revenue recognized for usage-based lease arrangements, including our customers' ability to exit or cancel those arrangements prior to the end of the lease term, there is no guarantee that we will recuperate the cost of the leased system, which, in turn, could adversely impact our gross profit margins if utilization of those systems are different than our expectations.
The following table summarizes our systems installed at customers under operating leasing arrangements:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Da Vinci System Installed Base under Operating Leasing Arrangements | |||||||||||||||||
| Fixed-payment operating lease arrangements | 1,307 | 1,204 | 1,018 | ||||||||||||||
| Usage-based operating lease arrangements | 1,492 | 1,023 | 665 | ||||||||||||||
| Total da Vinci system installed base under operating lease arrangements | 2,799 | 2,227 | 1,683 | ||||||||||||||
| Ion System Installed Base under Operating Leasing Arrangements | |||||||||||||||||
| Fixed-payment operating lease arrangements | 126 | 96 | 72 | ||||||||||||||
| Usage-based operating lease arrangements | 193 | 118 | 60 | ||||||||||||||
| Total Ion system installed base under operating lease arrangements | 319 | 214 | 132 | ||||||||||||||
Our exposure to the credit risks relating to our lease financing arrangements may increase if our customers are adversely affected by economic pressures or uncertainty, changes in healthcare laws, coverage and reimbursement, or other customer-specific factors. As a result of these macroeconomic factors impacting our customers, we may be exposed to defaults under our lease financing arrangements. Moreover, usage-based operating lease arrangements generally contain no minimum payments; therefore, customers may exit such arrangements without paying a financial penalty to us.
For some operating lease arrangements, our customers are provided with the right to purchase the leased system at certain points during and/or at the end of the lease term. Revenue generated from customer purchases of systems under operating lease arrangements ("Lease Buyouts") was $109 million, $74 million, and $72 million for the years ended December 31, 2024, 2023, and 2022, respectively. We expect that revenue recognized from customer exercises of buyout options will fluctuate based on the timing of when, and if, customers choose to exercise such buyout options.
Systems Revenue
System placements are driven by procedure growth in most geographic markets. In some markets, system placements are constrained by regulation. In geographies where da Vinci procedure adoption is in an early stage or system placements are constrained by regulation, system sales will precede procedure growth. System placements also vary due to seasonality, largely aligned with hospital budgeting cycles. On an annual basis, we typically place a higher proportion of systems in the fourth quarter and a lower proportion in the first quarter as many customer budgets are reset. Systems revenue is also affected by the proportion of system placements under operating lease arrangements, which can fluctuate period to period depending on customer preference, recurring fixed-payment and usage-based operating lease revenue, Lease Buyouts, product mix, ASPs, trade-in activities, customer mix, and specified-price trade-in rights. We generally do not provide specified-price trade-in rights or upgrade rights at the time of a system purchase; however, as we continue the phased launch of our next-generation da Vinci 5 surgical system, specified-price trade-in rights will continue to be included in certain arrangements. For trade-in activities involving operating lease upgrades, depending on the timing and terms of the upgrade transaction, the amount of revenue generated on the initial and new lease arrangements may not, in the aggregate, generate the same amount of revenue that a traditional sale and trade-in transaction would. Systems revenue increased 17% to $1.97 billion in 2024. Systems revenue remained flat at $1.68 billion in 2023. Systems revenue declined 1% to $1.68 billion in 2022.
Procedure Mix / Products
Our da Vinci surgical systems are generally used for soft tissue surgery for areas of the body between the pelvis and the neck, primarily in general, gynecologic, urologic, cardiothoracic, and head and neck surgical procedures. Within these categories, procedures range in complexity from cancer and other highly complex procedures to less complex procedures for benign conditions. Cancer and other highly complex procedures tend to be reimbursed at higher rates than less complex procedures for benign conditions. Thus, hospitals are more sensitive to the costs associated with treating less complex, benign conditions. Our strategy is to provide hospitals with attractive clinical and economical solutions across the spectrum of procedure complexity. Our fully featured da Vinci 5 and da Vinci Xi surgical systems with advanced instruments (including da Vinci energy and da Vinci stapler products) and our Integrated Table Motion product target the more complex procedure segment. Our da Vinci X surgical system is targeted toward price-sensitive geographic markets and procedures. Our da Vinci SP surgical system complements the da Vinci 5, da Vinci X, and da Vinci Xi surgical systems by enabling surgeons to access narrow workspaces.
Procedure and Placement Seasonality
For the years ended December 31, 2024, 2023, and 2022, more than half of the da Vinci procedures performed were for benign conditions, most notably hernia repairs, hysterectomies, and cholecystectomies. These benign procedures and other short-term elective procedures tend to be more seasonal than cancer operations and surgeries for other life-threatening conditions. Seasonality in the U.S. for procedures for benign conditions typically results in higher fourth quarter procedure volume when more patients have met annual deductibles and lower first quarter procedure volume when deductibles are reset. Seasonality outside of the U.S. varies and is more pronounced around local holidays and vacation periods, which have lower procedure volume.
In addition, historically, placements of our da Vinci surgical systems have tended to be heavier in the fourth quarter and lighter in the first quarter, as hospital budgets are reset.
Distribution Channels
We sell our products and services through direct sales organizations in the U.S., Europe (excluding Italy, Spain, Portugal, Greece, and Eastern European countries), China (through our majority-owned joint ventures, Intuitive Surgical-Fosun Medical Technology (Shanghai) Co., Ltd. and Intuitive Surgical-Fosun (HongKong) Co., Ltd. (collectively, the "Joint Venture"), with Fosun Pharma), Japan, South Korea, India, Taiwan, and Canada. In the U.S. (for some government customers), China, and Japan, we also utilize certain distributors in addition to our direct sales organizations. In the remainder of our OUS markets, we provide our products for sale through distributors.
Regulatory Activities
Overview
Our products must meet the requirements of a large and growing body of international regulations and standards that govern the product safety, efficacy, advertising, labeling, safety reporting design, manufacture, materials content and sourcing, testing, certification, packaging, installation, use, and disposal of our products. Examples of such standards include electrical safety standards, such as those of the International Electrotechnical Commission, and composition standards, such as the Reduction of Hazardous Substances and the Waste Electrical and Electronic Equipment Directives in the European Union ("EU"). Failure to meet these standards could limit our ability to market our products in those regions that require compliance with such standards.
Our products and operations are also subject to increasingly stringent medical device, privacy, and other regulations by national, regional, federal, state, and local authorities. After a device is placed on the market, numerous FDA and comparable foreign regulatory requirements continue to apply. These requirements include establishment registration, potential quality system and manufacturing audits and inspections, and device listing with the FDA or other foreign regulatory authorities and compliance with medical device reporting regulations, which require that manufacturers report to the FDA or other foreign regulatory authorities if their device caused or contributed, or may have caused or contributed, to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur.
We anticipate that timelines for the introduction of new products and/or indications may be extended relative to past experience as a result of these regulations. For example, we have seen elongated regulatory approval timelines in the U.S. and Europe.
Clearances, Approvals, and Certifications
We have generally obtained the regulatory clearances, approvals, and certifications required to market our products for our targeted surgical specialties within the U.S., South Korea, Japan, and the European markets in which we operate. We have obtained regulatory clearances, approvals, and certifications for the following products over the past several years:
Da Vinci Surgical System
Multi-port
•In July 2025, we obtained European certification in accordance with the EU MDR for our da Vinci 5 surgical system, our next-generation multi-port robotic system, for adult and pediatric use in minimally invasive endoscopic procedures across abdominopelvic and thoracoscopic surgical procedures, including urologic, gynecologic, and general laparoscopic procedures, excluding the use of force feedback. We intend to seek European certification for the use of force feedback in the future. In June 2025, we obtained regulatory clearance in Japan for the da Vinci 5 surgical system for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac indications. In October 2024, we obtained regulatory clearance in South Korea for the da Vinci 5 surgical system for use in urologic, general, gynecologic, thoracoscopic, thoracoscopically-assisted cardiotomy, and transoral otolaryngology surgical procedures. In March 2024, we obtained FDA clearance for our da Vinci 5 surgical system for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac and pediatric indications as well as one contraindication related to the use of force feedback in hysterectomy and myomectomy surgical procedures. In our OUS markets, we are early in the launch of our da Vinci 5 surgical system.
•In September 2025, we obtained regulatory clearance in Japan for our Vessel Sealer Curved for use with our da Vinci 5, da Vinci X, and da Vinci Xi surgical systems for grasping and blunt dissection of tissue, as well as bipolar coagulation and mechanical transection of blood vessels (veins and arteries) up to 7mm in diameter, lymphatic vessels, and tissue bundles that fit within the instrument's jaws. In June 2025, we obtained FDA clearance for the same instrument.
•In December 2024, we obtained European certification in accordance with the EU MDR for our E-200 generator. In July 2023, we received regulatory clearance for our E-200 generator in Japan and South Korea. In November 2022, we obtained FDA clearance for our E-200 generator. The E-200 generator can be used in da Vinci robotic procedures, as well as non-robotic open and laparoscopic procedures, to deliver high-frequency energy for cutting, coagulation, and vessel sealing of tissues. The E-200 generator includes the same advanced energy capability as the E-100 generator and supports the same vessel sealing instruments.
•In September 2024, we obtained FDA clearance for our redesigned 8 mm SureForm 30 stapler and 8 mm SureForm 30 Curved-Tip stapler instruments and reloads for use with our da Vinci 5, da Vinci X, and da Vinci Xi surgical systems in general, thoracic, gynecologic, urologic, and pediatric surgical procedures. In April 2024, we obtained European certification in accordance with the EU MDR for our redesigned 8 mm SureForm 30 stapler and 8 mm SureForm 30 Curved-Tip stapler instruments and reloads for use in general, thoracic, gynecologic, urologic, and pediatric surgical procedures.
•In August 2023, following approval by China's NMPA for a local version of our da Vinci Xi surgical system in June 2023, our Joint Venture received a manufacturing license that permits the Joint Venture to manufacture our da Vinci Xi surgical system for sale to customers in China.
Single-port
•In June 2025, we obtained regulatory clearances in South Korea and Japan for our SP SureForm 45 stapler and our SP SureForm 45 curved-tip stapler for use with our da Vinci SP surgical system. In March 2025, we obtained FDA clearance for our SP SureForm 45 stapler and our SP SureForm 45 curved-tip stapler for use with our da Vinci SP surgical system, which may be particularly useful in thoracic and colorectal surgical procedures.
•In May 2025, we obtained FDA clearance for the use of our da Vinci SP surgical system in transanal local excision/resection, a form of minimally invasive surgery performed through a natural orifice to avoid abdominal surgical incisions, for select procedures. In December 2024, we obtained FDA clearance for the use of our da Vinci SP surgical system in colorectal surgical procedures. In July 2024, we obtained FDA clearance for the use of our da Vinci SP surgical system in general thoracoscopic surgical procedures. In April 2023, we obtained FDA clearance for the use of our da Vinci SP surgical system in simple prostatectomy procedures. We also obtained FDA clearance for the use of our da Vinci SP surgical system in transvesical approaches to simple and radical prostatectomy.
•In August 2024, we obtained regulatory clearance in Taiwan for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, transanal total mesorectal excision, and breast surgical procedures. In January 2024, we obtained European certification in accordance with the EU MDR for
our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, and breast surgical procedures. In September 2022, we obtained regulatory clearance for our da Vinci SP surgical system in Japan for use in general, thoracic (excluding cardiac procedures and intercostal approaches), urologic, gynecologic, and transoral head and neck surgical procedures.
Ion Endoluminal System
•In October 2025, we obtained FDA clearance for software advancements for the Ion endoluminal system. This software release introduces artificial intelligence across Ion's entire navigational workflow, while also integrating new advanced imaging capabilities to support accurate and efficient lung biopsies.
•In February 2025, we obtained European certification in accordance with the EU MDR to extend the number of uses of our catheter instrument used with our Ion endoluminal system from five to eight uses. In April 2024, we obtained FDA clearance to extend the number of uses of our catheter instrument from five to eight uses.
•In March 2024, we received NMPA regulatory clearance for our Ion endoluminal system in China. We placed our first Ion systems in China during the third quarter of 2024 and will continue our rollout of the Ion system in China in a measured fashion while we optimize training pathways and collect additional clinical data. In September 2023, we received regulatory clearance in South Korea for our Ion endoluminal system. We expect the introduction of the Ion system in South Korea to follow the refinement of our training pathways in the region and the gathering of local clinical and economic data. In March 2023, we obtained European certification in accordance with the EU MDR for our Ion endoluminal system. In Europe, we continued commercialization, with certain system placements focusing on the collection of clinical data in support of our European reimbursement strategy.
Refer to the descriptions of our new products that received regulatory clearances, approvals, or certifications in 2025, 2024, and 2023 in the Recent Product Introductionssection below.
In June 2023, the China National Health Commission published the 14th five-year plan quota for major medical equipment to be sold in China on its official website (the "2023 Quota"). Under the original 2023 Quota, the government will allow for the sale of 559 new surgical robots into China, which could include da Vinci surgical systems as well as surgical systems introduced by others. As of September 30, 2025, including systems that were sold in prior quarters, we have placed 146 da Vinci surgical systems under the original 2023 Quota and 5 da Vinci surgical systems under special approvals. Future sales of da Vinci surgical systems under this and any previously published open quotas are uncertain, as they are open to other medical device companies that have introduced robotic-assisted surgical systems and are dependent on hospitals completing a tender process and receiving associated approvals. Our ability to track the number of systems that could be sold under these quotas in the future is limited by provincial and national agencies making such information publicly available.
Since 2022, several provinces in China have implemented significant limits on what hospitals can charge patients for surgeries using robotic surgical technology, including soft tissue surgery. These limits have significantly impacted the number of procedures performed and have impacted our instruments and accessories revenue in those provinces. However, as of the date of this report, these limits have not had a material impact on our business, financial condition, or results of operations, as only a small portion of our installed base in China is currently located in the impacted provinces. Companies providing robotic surgical technology, including our Joint Venture, have been meeting with Chinese government healthcare agencies to discuss these developments and to provide feedback. We cannot assure you that additional provincial or national healthcare agencies and administrations will not impose similar limits, and we expect to continue to face increased pricing pressure, both of which could further impact the number of procedures performed and our instruments and accessories revenue in China.
The Japanese Ministry of Health, Labor, and Welfare ("MHLW") considers reimbursement for procedures in April of even-numbered years. The process for obtaining reimbursement requires Japanese university hospitals and surgical societies, with our support, to seek reimbursement. There are multiple pathways to obtain reimbursement for procedures, including those that require in-country clinical and economic data. An additional five da Vinci procedures were granted reimbursement in April 2024, including lobectomy for benign conditions. In addition, we received higher reimbursement for certain da Vinci rectal resection procedures, as compared to open procedure reimbursements. The additional reimbursed procedures have varying levels of conventional laparoscopic penetration and will generally be reimbursed at rates equal to the conventional laparoscopic procedures. Given the reimbursement level and laparoscopic penetration for these additional procedures, there can be no assurance that the adoption pace for these procedures will be similar to prostatectomy or partial nephrectomy, given their higher reimbursement, or any other da Vinci procedure.
Field Actions, Recalls, and Corrections
Medical device companies have regulatory obligations to correct or remove medical devices in the field that could pose a risk to health. The definition of "recalls and corrections" is expansive and includes repair, replacement, inspections, relabeling, and issuance of new or additional instructions for use or reinforcement of existing instructions for use and training when such actions are taken for specific reasons of safety or compliance. These field actions require stringent documentation, reporting,
and monitoring worldwide. There are other actions that a medical device manufacturer may take in the field without reporting including, but not limited to, routine servicing and stock rotations.
As we determine whether a field action is reportable in any regulatory jurisdiction, we prepare and submit notifications to the appropriate regulatory agency for the particular jurisdiction. Regulators can require the expansion, reclassification, or change in scope and language of the field action. In general, upon submitting required notifications to regulators regarding a field action that is a recall or correction, we will notify customers regarding the field action, provide any additional documentation required in their national language, and arrange, as required, the return or replacement of the affected product or a field service visit to perform the correction.
Field actions, as well as certain outcomes from regulatory activities, can result in adverse effects on our business, including damage to our reputation, delays by customers of purchase decisions, reduction or stoppage of the use of installed systems, and reduced revenue as well as increased expenses.
Procedures
We model patient value as equal to procedure efficacy / invasiveness. In this equation, procedure efficacyis defined as a measure of the success of the procedure in resolving the underlying disease, and invasivenessis defined as a measure of patient pain and disruption of regular activities. When the patient value of a robotic-assisted procedure is greater than that of alternative treatment options, patients may benefit from seeking out surgeons or physicians and hospitals that offer robotic-assisted medical procedures, which could potentially result in a local market share shift. Adoption of robotic-assisted procedures occurs by procedure and by market and is driven by the relative patient value and total treatment costs of robotic-assisted procedures as compared to alternative treatment options for the same disease state or condition.
Da Vinci Procedures
The adoption of robotic-assisted surgery using the da Vinci surgical system has the potential to grow for those procedures that offer greater patient value than to non-da Vinci alternatives and competitive total economics for healthcare providers. Our da Vinci surgical systems are used primarily in general, gynecologic, urologic, cardiothoracic, and head and neck surgical procedures. We focus our organization and investments on developing, marketing, and training products and services for procedures in which da Vinci can bring patient value relative to alternative treatment options and/or economic benefit to healthcare providers. Target procedures in general surgery include hernia repair (both ventral and inguinal), colorectal, cholecystectomy, and bariatric procedures. Target procedures in urology include prostatectomy and partial nephrectomy. Target procedures in gynecology include hysterectomy for both cancer and benign conditions and sacrocolpopexy. In cardiothoracic surgery, target procedures include lung resection. In head and neck surgery, target procedures include transoral surgery. Not all indications, procedures, or products described may be available in a given country or region or on all generations of da Vinci surgical systems. Surgeons and their patients need to consult the product labeling in their specific country and for each product in order to determine the cleared uses, as well as important limitations, restrictions, or contraindications.
In 2024, approximately 2,683,000 surgical procedures were performed with da Vinci surgical systems, compared to approximately 2,286,000 and 1,875,000 surgical procedures performed with da Vinci surgical systems in 2023 and 2022, respectively. The increase in our overall procedure volume in 2024 was largely attributable to growth in U.S. general surgery, OUS general surgery (particularly cancer), OUS urologic surgery, and U.S. gynecologic surgery procedures. The overall procedure volume in the 2022 comparative year reflects disruption caused by the COVID-19 pandemic.
U.S. da Vinci Procedures
Overall U.S. procedure volume with da Vinci surgical systems grew to approximately 1,757,000 in 2024, compared to approximately 1,532,000 in 2023 and approximately 1,282,000 in 2022. General surgery was our largest and fastest growing U.S. specialty in 2024 with procedure volume that grew to approximately 1,063,000 in 2024, compared to approximately 896,000 in 2023 and approximately 720,000 in 2022. Gynecology was our second largest U.S. surgical specialty in 2024 with procedure volume that grew to approximately 423,000 in 2024, compared to approximately 390,000 in 2023 and approximately 341,000 in 2022. Urology was our third largest U.S. surgical specialty in 2024 with procedure volume that grew to approximately 186,000 in 2024, compared to approximately 173,000 in 2023 and approximately 162,000 in 2022.
OUS da Vinci Procedures
Overall OUS procedure volume with da Vinci surgical systems grew to approximately 926,000 in 2024, compared to approximately 754,000 in 2023 and approximately 593,000 in 2022. Urology was our largest OUS surgical specialty in 2024 with procedure volume that grew to approximately 435,000 in 2024, compared to approximately 381,000 in 2023 and approximately 316,000 in 2022. General surgery was our second largest and fastest growing OUS specialty in 2024 with procedure volume that grew to approximately 254,000 in 2024, compared to approximately 188,000 in 2023 and approximately 133,000 in 2022. Gynecology was our third largest OUS surgical specialty in 2024 with procedure volume that grew to approximately 142,000 in 2024, compared to approximately 110,000 in 2023 and approximately 86,000 in 2022.
Ion Procedures
The adoption of robotic-assisted bronchoscopy using the Ion endoluminal system has the potential to grow if it can offer greater patient value than non-Ion alternatives and competitive total economics for healthcare providers.
In 2024, approximately 95,500 biopsy procedures were performed with Ion systems, compared to approximately 53,800 in 2023 and approximately 23,500 in 2022. The increase in our overall procedure volume in 2024 reflects a larger installed base of approximately 805 systems, an increase of 51% compared to the installed base of approximately 534 systems as of 2023. In 2024, 2023, and 2022, the vast majority of Ion biopsy procedures were performed in the U.S.
Recent Business Events and Trends
Da Vinci Procedures
Overall. Total da Vinci procedures performed by our customers grew approximately 19% for the three months ended September 30, 2025, compared to approximately 18% for the three months ended September 30, 2024. Total da Vinci procedures performed by our customers grew approximately 18% for the nine months ended September 30, 2025, compared to approximately 17% for the nine months ended September 30, 2024. The third quarter 2025 procedure growth was largely attributable to growth in general surgery, OUS urology, and U.S. gynecology procedures.
U.S. Procedures.U.S. da Vinci procedures grew approximately 16% for the three months ended September 30, 2025, compared to approximately 16% for the three months ended September 30, 2024. U.S. da Vinci procedures grew approximately 14% for the nine months ended September 30, 2025, compared to approximately 15% for the nine months ended September 30, 2024. The third quarter 2025 U.S. procedure growth was largely attributable to strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and appendectomy procedures, as well as growth in gynecological procedures. The number of U.S. da Vinci bariatric procedures performed declined in the high-single digits in the third quarter of 2025 compared to the third quarter of 2024. Da Vinci bariatric procedures comprise approximately 3% of our total da Vinci procedures.
OUS Procedures.OUS da Vinci procedures grew approximately 24% for the three months ended September 30, 2025, compared to approximately 24% for the three months ended September 30, 2024. OUS da Vinci procedures grew approximately 24% for the nine months ended September 30, 2025, compared to approximately 22% for the nine months ended September 30, 2024. The third quarter 2025 OUS procedure growth was largely attributable to growth in general surgery procedures, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures, most notably hysterectomy procedures. The third quarter 2025 OUS procedure growth rate reflects continued da Vinci adoption in Asian and European markets. We saw strong procedure growth in India, South Korea, and Brazil during the third quarter of 2025. We believe that growth in these global markets is being driven by increased acceptance among surgeons and health systems, supported by expanded global evidence validating the clinical and economic value of da Vinci procedures as well as increased surgeon training. In South Korea, the doctor strikes that began in the first quarter of 2024 have ended; we saw a recovery in the number of procedures performed in the first nine months of 2025, and the growth rate in South Korea exceeded the overall OUS procedure growth rate.
Ion Procedures
Overall. Total Ion procedures performed by our customers grew approximately 52% for the three months ended September 30, 2025, compared to approximately 73% for the three months ended September 30, 2024. Total Ion procedures performed by our customers grew approximately 54% for the nine months ended September 30, 2025, compared to approximately 81% for the nine months ended September 30, 2024. The third quarter 2025 procedure growth was largely attributable to a larger installed base of Ion systems and the conversion of other lung biopsy modalities.
System Demand
We placed 427 da Vinci surgical systems in the third quarter of 2025, compared to 379 systems in the third quarter of 2024. The increase in system placements reflects continued demand for additional capacity by our customers as a result of procedure growth as well as increased demand for our next-generation da Vinci 5 system, including the impact from customers beginning to trade in fourth-generation da Vinci systems. During the third quarter of 2025, we placed 240 da Vinci 5 systems, compared to 110 systems in the third quarter of 2024.
We placed 50 Ion systems in the third quarter of 2025, compared to 58 systems in the third quarter of 2024. In the U.S., where we estimate that penetration of lung biopsy is approaching the halfway point, our customers' focus has begun to shift from increasing capacity to increasing utilization of their existing systems.
We continue to see some customers challenged by decreased government funding in healthcare (particularly in Europe and Japan), staffing shortages, and other financial pressures. As a result, we expect some customers to continue to be cautious in their overall capital spending. In addition, system demand in China has been adversely impacted by increasing robotic-assisted surgical system competition from domestic companies and, to a lesser extent, a broader central government focus on systematic governance. Currently, the extent and impact of the competitive dynamics and this campaign in China on our business remains uncertain.
We expect that future placements of da Vinci surgical systems will be impacted by a number of factors: supply chain risks; economic and geopolitical factors; the trade environment; inflationary pressures; high interest rates; hospital staffing shortages; procedure growth rates; evolving system utilization and point-of-care dynamics; capital replacement trends; additional reimbursements in various global markets, such as in Japan; the timing around governmental tenders and authorizations, as well
as governmental actions impacting the tender process, such as the governance campaign in China; hospitals' response to the evolving healthcare environment; the timing of when we receive regulatory clearance in our other OUS markets for our da Vinci 5, da Vinci X, da Vinci Xi, and da Vinci SP surgical systems and related instruments; and the market response.
Demand may also be impacted by the competition we currently face, or expect to face, from companies offering products for open or MIS surgeries, companies providing other therapeutic approaches for target clinical conditions, and companies developing diagnostic solutions that could serve as alternatives to current or planned Intuitive offerings. Companies that have introduced products in the field of robotic-assisted medical procedures, or have made explicit statements about their efforts to enter the field, include, but are not limited to, the following: Beijing Surgerii Robotics Company Limited; CMR Surgical Ltd.; Distalmotion SA; Harbin Sizhe Rui Intelligent Medical Equipment Co., Ltd.; Johnson & Johnson; Karl Storz SE & Co. KG; Medicaroid Corporation; Medtronic plc; meerecompany Inc.; Noah Medical Corporation; Shandong Weigao Group Medical Polymer Company Ltd.; Shanghai Microport Medbot (Group) Co., Ltd.; Shenzhen Edge Medical Co., Ltd.; and SS Innovations International, Inc.
Many of the above factors will also impact future demand for our Ion endoluminal system, as we extend our commercial offering into diagnostics, along with additional factors associated with a new product introduction, including, but not limited to, our ability to optimize manufacturing and our supply chain, competition, clinical data to demonstrate value, and market acceptance.
Recent Product Introductions
Da Vinci 5. Da Vinci 5 builds on da Vinci Xi's highly functional design, featuring force feedback technology and instruments that enable surgeons to sense and measure the force exerted on tissue during surgery. It also includes new surgeon controllers, powerful vibration and tremor controls, a next-generation 3D display and image system, and throughput and workflow enhancements, such as an integrated electrosurgical unit and insufflation capabilities technology. Da Vinci 5 has more than 10,000 times the computing power of da Vinci Xi, allowing for innovative new system capabilities and advanced digital experiences, including integration with our My Intuitive app, SimNow (virtual reality simulator), Case Insights (computational observer), and Intuitive Hub (edge computing system). Additionally, the redesigned console provides greater surgeon comfort with customizable positioning, allowing surgeons to find their best fit for surgical viewing and comfort, including the ability to sit completely upright.
E-200 Generator. The E-200 generator is an advanced electrosurgical generator designed to provide high-frequency energy for cutting, coagulation, and vessel sealing of tissues. The E-200 generator is integrated with the da Vinci 5 surgical system, is compatible with the da Vinci X and Xi surgical systems, and can also function as a standalone electrosurgical generator. When connected to a da Vinci system, the E-200 delivers high-frequency energy to da Vinci instruments, with control and status messages communicated through an Ethernet cable. The E-200 generator is also compatible with third-party handheld monopolar and bipolar instruments, as well as fingerswitch-equipped instruments and Intuitive-provided auxiliary footswitches. The E-200 generator includes the same advanced energy capability as the E-100 generator and supports the same vessel sealing instruments.
SureForm 30 Curved-Tip Stapler and Reloads.The 8 mm SureForm 30 curved-tip stapler and reloads (gray, white, and blue) were designed for use with our multi-port da Vinci surgical systems to help surgeons better visualize and reach anatomy through a combination of the 8 mm diameter instrument shaft and jaws, 120-degree cone of wristed articulation, and the curved tip. As it fits through the 8 mm da Vinci surgical system instrument cannula, the stapler allows different angles for surgeons to approach patient anatomy. Consistent with our other SureForm staplers, the 8 mm SureForm 30 curved-tip stapler integrates SmartFire technology, which makes automatic adjustments to the firing process as staples are formed and the transection is made. The technology makes more than 1,000 measurements per second, helping achieve a consistent staple line.
SP SureForm 45 Stapler and SP SureForm 45 Curved-Tip Stapler. The SP SureForm 45 stapler and SP SureForm 45 curved-tip stapler were both designed for use with the da Vinci SP surgical system, providing precision and versatility in minimally invasive procedures. Featuring wristed articulation and a 45 mm staple line, these staplers enhance access to anatomical structures through a single-port approach. Consistent with our multi-port SureForm staplers, these staplers integrate SmartFire technology to monitor tissue compression and make automatic adjustments during firing to optimize staple formation and transection. With real-time monitoring of over 1,000 measurements per second, these staplers help achieve a secure and consistent staple line. The staplers use the same reloads (gray, white, blue, green, and black) as the multi-port SureForm 45 staplers.
Vessel Sealer Curved. The Vessel Sealer Curved is a single-use, fully wristed, advanced bipolar electrosurgical instrument designed for use with our da Vinci 5, da Vinci X, and da Vinci Xi surgical systems. It is intended for grasping and blunt dissection of tissue as well as for bipolar coagulation and mechanical transection of blood vessels (veins and arteries) up to 7 mm in diameter, lymphatic vessels, and tissue bundles that fit within the jaws of the instrument. Vessel Sealer Curved offers enhanced multifunctionality and precision via its slim, curved jaw designed to follow the natural contours of anatomy, helping
improve visibility and control especially in tight spaces and around critical structures. The Vessel Sealer Curved enables surgeons to seal and cut vessels and tissue using a combination of electrode sealing surfaces and a mechanical cutting blade housed within the instrument jaws.
Third Quarter 2025 Operational and Financial Highlights
•Total revenue increased by 23% to $2.51 billion for the three months ended September 30, 2025, compared to $2.04 billion for the three months ended September 30, 2024.
•Approximately 797,000 da Vinci procedures were performed during the three months ended September 30, 2025, an increase of 19% compared to approximately 670,000 da Vinci procedures for the three months ended September 30, 2024.
•Approximately 37,900 Ion procedures were performed during the three months ended September 30, 2025, an increase of 52% compared to approximately 24,900 Ion procedures for the three months ended September 30, 2024.
•Instruments and accessories revenue increased by 20% to $1.52 billion for the three months ended September 30, 2025, compared to $1.26 billion for the three months ended September 30, 2024.
•Systems revenue increased by 33% to $590 million for the three months ended September 30, 2025, compared to $445 million during the three months ended September 30, 2024.
•During the three months ended September 30, 2025, we placed 427 da Vinci surgical systems compared to 379 systems during the three months ended September 30, 2024. The third quarter 2025 da Vinci surgical system placements included 240 da Vinci 5 systems compared to 110 systems in the third quarter of 2024.
•As of September 30, 2025, we had a da Vinci surgical system installed base of approximately 10,763 systems, an increase of 13% compared to an installed base of approximately 9,539 systems as of September 30, 2024.
•Utilization of da Vinci surgical systems, measured in terms of procedures per system per year, increased 4% relative to the third quarter of 2024.
•During the three months ended September 30, 2025, we placed 50 Ion systems compared to 58 systems during the three months ended September 30, 2024.
•As of September 30, 2025, we had an Ion system installed base of approximately 954 systems, an increase of 30% compared to an installed base of approximately 736 systems as of September 30, 2024.
•Gross profit as a percentage of revenue was 66.4% for the three months ended September 30, 2025, compared to 67.4% for the three months ended September 30, 2024.
•Operating income increased by 32% to $760 million for the three months ended September 30, 2025, compared to $577 million during the three months ended September 30, 2024. Operating income included $206 million and $176 million of share-based compensation expense related to employee stock plans and $3.9 million and $3.5 million of intangible asset-related charges for the three months ended September 30, 2025, and 2024, respectively.
•During the three months ended September 30, 2025, we repurchased 4.0 million shares of our common stock for $1.92 billion.
•As of September 30, 2025, we had $8.43 billion in cash, cash equivalents, and investments. Cash, cash equivalents, and investments decreased by $0.40 billion, compared to $8.83 billion as of December 31, 2024, primarily as a result of cash used for repurchases of common stock, capital expenditures, and taxes paid related to net share settlements of equity awards, partially offset by cash provided by operating activities and proceeds from stock option exercises and employee stock purchases.
Results of Operations
The following discussion should be read in conjunction with our unaudited Condensed Consolidated Financial Statements ("Financial Statements") and Notes thereto.
Certain information from our unaudited Condensed Consolidated Statements of Income has been summarized below (in millions, except percentages):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 |
% of Total Revenue |
2024 |
% of Total Revenue |
2025 |
% of Total Revenue |
2024 |
% of Total Revenue |
||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Product | $ | 2,109.2 | 84 | % | $ | 1,709.2 | 84 | % | $ | 6,048.4 | 84 | % | $ | 4,978.9 | 84 | % | |||||||||||||||||||||||||||||||
| Service | 395.9 | 16 | % | 328.9 | 16 | % | 1,150.1 | 16 | % | 959.7 | 16 | % | |||||||||||||||||||||||||||||||||||
| Total revenue | 2,505.1 | 100 | % | 2,038.1 | 100 | % | 7,198.5 | 100 | % | 5,938.6 | 100 | % | |||||||||||||||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Product | 699.4 | 28 | % | 555.4 | 27 | % | 2,056.3 | 29 | % | 1,649.2 | 28 | % | |||||||||||||||||||||||||||||||||||
| Service | 143.3 | 6 | % | 108.8 | 6 | % | 404.2 | 6 | % | 297.4 | 5 | % | |||||||||||||||||||||||||||||||||||
| Total cost of revenue | 842.7 | 34 | % | 664.2 | 33 | % | 2,460.5 | 35 | % | 1,946.6 | 33 | % | |||||||||||||||||||||||||||||||||||
| Product gross profit | 1,409.8 | 56 | % | 1,153.8 | 57 | % | 3,992.1 | 55 | % | 3,329.7 | 56 | % | |||||||||||||||||||||||||||||||||||
| Service gross profit | 252.6 | 10 | % | 220.1 | 10 | % | 745.9 | 10 | % | 662.3 | 11 | % | |||||||||||||||||||||||||||||||||||
| Gross profit | 1,662.4 | 66 | % | 1,373.9 | 67 | % | 4,738.0 | 65 | % | 3,992.0 | 67 | % | |||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
|
Selling, general, and administrative
|
573.3 | 23 | % | 510.6 | 25 | % | 1,697.9 | 24 | % | 1,527.4 | 26 | % | |||||||||||||||||||||||||||||||||||
| Research and development | 329.4 | 13 | % | 286.0 | 14 | % | 958.9 | 13 | % | 850.6 | 14 | % | |||||||||||||||||||||||||||||||||||
| Total operating expenses | 902.7 | 36 | % | 796.6 | 39 | % | 2,656.8 | 37 | % | 2,378.0 | 40 | % | |||||||||||||||||||||||||||||||||||
| Income from operations | 759.7 | 30 | % | 577.3 | 28 | % | 2,081.2 | 28 | % | 1,614.0 | 27 | % | |||||||||||||||||||||||||||||||||||
| Interest and other income, net | 95.5 | 4 | % | 93.7 | 5 | % | 274.6 | 4 | % | 250.0 | 4 | % | |||||||||||||||||||||||||||||||||||
| Income before taxes | 855.2 | 34 | % | 671.0 | 33 | % | 2,355.8 | 32 | % | 1,864.0 | 31 | % | |||||||||||||||||||||||||||||||||||
| Income tax expense | 146.0 | 6 | % | 100.4 | 5 | % | 278.7 | 4 | % | 214.5 | 3 | % | |||||||||||||||||||||||||||||||||||
| Net income | 709.2 | 28 | % | 570.6 | 28 | % | 2,077.1 | 28 | % | 1,649.5 | 28 | % | |||||||||||||||||||||||||||||||||||
| Less: net income attributable to noncontrolling interest in joint venture | 4.8 | - | % | 5.5 | - | % | 15.9 | - | % | 12.6 | - | % | |||||||||||||||||||||||||||||||||||
| Net income attributable to Intuitive Surgical, Inc. | $ | 704.4 | 28 | % | $ | 565.1 | 28 | % | $ | 2,061.2 | 28 | % | $ | 1,636.9 | 28 | % | |||||||||||||||||||||||||||||||
Total Revenue
Total revenue increased by 23% to $2.51 billion for the three months ended September 30, 2025, compared to $2.04 billion for the three months ended September 30, 2024, resulting from 20% higher instruments and accessories revenue, 33% higher systems revenue, and 20% higher service revenue.
Total revenue increased by 21% to $7.20 billion for the nine months ended September 30, 2025, compared to $5.94 billion for the nine months ended September 30, 2024, resulting from 19% higher instruments and accessories revenue, 29% higher systems revenue, and 20% higher service revenue.
We generally sell our products and services in local currencies where we have direct distribution channels. Revenue denominated in foreign currencies as a percentage of total revenue was approximately 24% and 25% for the three and nine months ended September 30, 2025, and 24% and 25% for the three and nine months ended September 30, 2024, respectively. Fluctuations in foreign currency exchange rates had a favorable impact on OUS total revenue of $3 million and $9 million for the three and nine months ended September 30, 2025, respectively. Fluctuations in foreign currency exchange rates had an unfavorable impact on OUS total revenue of $2 million and $29 million for the three and nine months ended September 30, 2024, respectively. The impact of fluctuations in foreign currency exchange rates was determined by comparing current period revenue converted to USD using exchange rates that were effective in the comparable prior year period, net of the impacts from foreign currency hedging.
Revenue generated in the U.S. accounted for 69% and 68% oftotal revenue for the three and nine months ended September 30, 2025, respectively, and 68% and 66% of total revenue for the three and nine months ended September 30, 2024, respectively. We believe that U.S. revenue has accounted for the large majority of total revenue due to U.S. patients' ability to choose their provider and method of treatment, reimbursement structures supportive of innovation and MIS, and our initial investments focused on U.S. infrastructure. We have been investing in our business in OUS markets, and our OUS procedures have grown faster in comparison to U.S. procedures. We expect that our OUS procedures and revenue will make up a greater portion of our business in the long term.
The following table summarizes our revenue and system unit placements (in millions, except percentages and unit placements):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Instruments and accessories | $ | 1,518.8 | $ | 1,264.2 | $ | 4,360.6 | $ | 3,667.5 | |||||||||||||||
| Systems | 590.4 | 445.0 | 1,687.8 | 1,311.4 | |||||||||||||||||||
| Total product revenue | 2,109.2 | 1,709.2 | 6,048.4 | 4,978.9 | |||||||||||||||||||
|
Service
|
395.9 | 328.9 | 1,150.1 | 959.7 | |||||||||||||||||||
| Total revenue | $ | 2,505.1 | $ | 2,038.1 | $ | 7,198.5 | $ | 5,938.6 | |||||||||||||||
| U.S. | $ | 1,717.6 | $ | 1,379.4 | $ | 4,885.2 | $ | 3,937.1 | |||||||||||||||
| OUS | 787.5 | 658.7 | 2,313.3 | 2,001.5 | |||||||||||||||||||
| Total revenue | $ | 2,505.1 | $ | 2,038.1 | $ | 7,198.5 | $ | 5,938.6 | |||||||||||||||
| % of Revenue - U.S. | 69% | 68% | 68% | 66% | |||||||||||||||||||
| % of Revenue - OUS | 31% | 32% | 32% | 34% | |||||||||||||||||||
| Instruments and accessories | $ | 1,518.8 | $ | 1,264.2 | $ | 4,360.6 | $ | 3,667.5 | |||||||||||||||
|
Service
|
395.9 | 328.9 | 1,150.1 | 959.7 | |||||||||||||||||||
| Operating lease revenue | 223.0 | 167.8 | 632.0 | 472.7 | |||||||||||||||||||
| Total recurring revenue | $ | 2,137.7 | $ | 1,760.9 | $ | 6,142.7 | $ | 5,099.9 | |||||||||||||||
| % of Total revenue | 85% | 86% | 85% | 86% | |||||||||||||||||||
|
Da Vinci Surgical System Placements by Region
|
|||||||||||||||||||||||
| U.S. unit placements | 263 | 219 | 683 | 516 | |||||||||||||||||||
| OUS unit placements | 164 | 160 | 506 | 517 | |||||||||||||||||||
| Total unit placements* | 427 | 379 | 1,189 | 1,033 | |||||||||||||||||||
| *Systems placed under fixed-payment operating lease arrangements (included in total unit placements) | 116 | 79 | 276 | 227 | |||||||||||||||||||
| *Systems placed under usage-based operating lease arrangements (included in total unit placements) | 115 | 141 | 346 | 327 | |||||||||||||||||||
|
Da Vinci Surgical System Placements involving Trade-ins or Lease Upgrades
|
|||||||||||||||||||||||
|
Unit placements involving trade-ins or lease upgrades
|
141 | 38 | 291 | 88 | |||||||||||||||||||
|
Unit placements not involving trade-ins or lease upgrades
|
286 | 341 | 898 | 945 | |||||||||||||||||||
| Ion System Placements** | 50 | 58 | 153 | 202 | |||||||||||||||||||
| **Systems placed under fixed-payment operating lease arrangements (included in total unit placements) | 11 | 19 | 38 | 61 | |||||||||||||||||||
| **Systems placed under usage-based operating lease arrangements (included in total unit placements) | 6 | 17 | 42 | 54 | |||||||||||||||||||
Product Revenue
Three Months Ended September 30, 2025
Product revenue increased by 23% to $2.11 billion for the three months ended September 30, 2025, compared to $1.71 billion for the three months ended September 30, 2024.
Instruments and accessories revenue increased by 20% to $1.52 billion for the three months ended September 30, 2025, compared to $1.26 billion for the three months ended September 30, 2024. The increase in instruments and accessories revenue was primarily driven by approximately 19% higher da Vinci procedure volume and approximately 52% higher Ion procedure volume. The third quarter 2025 U.S. da Vinci procedure growth was approximately 16%, driven primarily by strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and appendectomy procedures, as well as growth in gynecological procedures. The number of U.S. da Vinci bariatric procedures performed declined in the high-single digits in the third quarter of 2025 compared to the third quarter of 2024. The third quarter 2025 OUS da Vinci procedure growth was approximately 24%, driven by growth in general surgery procedures, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures, most notably hysterectomy procedures. Geographically, the third quarter 2025 OUS da Vinci procedure growth was driven by several markets with particular strength in India, South Korea, and Brazil.
Systems revenue increased by 33% to $590 million for the three months ended September 30, 2025, compared to $445 million for the three months ended September 30, 2024. The higher third quarter 2025 system revenue was primarily driven by an increase in da Vinci system placements, including a decrease in the proportion of da Vinci system placements under operating leases, higher operating lease revenue, and higher ASPs in the third quarter of 2025, driven by an increase in da Vinci 5 system placements.
During the third quarter of 2025,427 da Vinci surgical systems were placed compared to 379 systems during the third quarter of 2024. By geography, 263 systems were placed in the U.S., 63 in Europe, 60 in Asia, and 41 in other markets during the third quarter of 2025, compared to 219 systems placed in the U.S., 65 in Europe, 74 in Asia, and 21 in other markets during the third quarter of 2024. The increase in system placements was primarily driven by continued demand for additional capacity by our customers as a result of procedure growth as well as increased demand for our next-generation da Vinci 5 system, including the impact from customers beginning to trade in fourth-generation da Vinci systems. As of September 30, 2025, we had a da Vinci surgical system installed base of approximately 10,763 systems, compared to an installed base of approximately 9,539 systems as of September 30, 2024. The incremental system installed base reflects continued procedure growth and further customer validation that robotic-assisted surgery addresses their Quintuple Aim objectives.
The following table summarizes our da Vinci system placements and systems installed at customers under leasing arrangements:
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Da Vinci System Placements under Leasing Arrangements
|
|||||||||||
| Fixed-payment operating lease arrangements | 116 | 79 | |||||||||
| Usage-based operating lease arrangements | 115 | 141 | |||||||||
| Total da Vinci system placements under operating lease arrangements | 231 | 220 | |||||||||
| % of Total da Vinci system placements | 54% | 58% | |||||||||
| Sales-type lease arrangements | 12 | 13 | |||||||||
| Total da Vinci system placements under leasing arrangements | 243 | 233 | |||||||||
| Da Vinci System Installed Base under Operating Leasing Arrangements | |||||||||||
| Fixed-payment operating lease arrangements | 1,379 | 1,289 | |||||||||
| Usage-based operating lease arrangements | 1,736 | 1,352 | |||||||||
| Total da Vinci system installed base under operating leasing arrangements | 3,115 | 2,641 | |||||||||
Operating lease revenue, including the contribution from Ion systems, was $223 million for the three months ended September 30, 2025, of which $138 million was variable lease revenue related to usage-based arrangements, compared to $168 million for the three months ended September 30, 2024, of which $87 million was variable lease revenue related to usage-based arrangements. Revenue from Lease Buyouts was $22 million for the three months ended September 30, 2025, compared to $24 million for the three months ended September 30, 2024. We expect revenue from Lease Buyouts to fluctuate period to period depending on the timing of when, and if, customers choose to exercise buyout options embedded in their leases.
The da Vinci surgical system ASP, excluding systems placed under fixed-payment or usage-based operating lease arrangements, Ion systems, and the impact of specified-price trade-in rights, was approximately $1.60 million for the three months ended September 30, 2025, compared to approximately $1.51 million for the three months ended September 30, 2024. The higher third quarter 2025 ASP was largely driven by favorable product mix, including from da Vinci 5 system placements, partially offset by higher pricing discounts and more trade-ins. ASP fluctuates from period to period based on geographic and product mix, product pricing, systems placed involving trade-ins, and changes in foreign exchange rates.
During the third quarter of 2025, 50 Ion systems were placed compared to 58 systems during the third quarter of 2024. By geography, 41 systems were placed in the U.S., 5 in Europe, and 4 in Asia during third quarter of 2025, compared to 53 systems placed in the U.S. and 3 in Europe during the third quarter of 2024. In the U.S., where we estimate that penetration of lung biopsy is approaching the halfway point, our customers' focus has begun to shift from increasing capacity to increasing utilization of their existing systems. As of September 30, 2025, we had an Ion system installed base of approximately 954 systems, compared to an installed base of approximately 736 systems as of September 30, 2024.
The following table summarizes our Ion system placements and systems installed at customers under leasing arrangements:
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Ion System Placements under Leasing Arrangements
|
|||||||||||
| Fixed-payment operating lease arrangements | 11 | 19 | |||||||||
| Usage-based operating lease arrangements | 6 | 17 | |||||||||
| Total Ion system placements under operating lease arrangements | 17 | 36 | |||||||||
| % of Total Ion system placements | 34% | 62% | |||||||||
|
Sales-type lease arrangements
|
5 | 2 | |||||||||
| Total Ion system placements under leasing arrangements | 22 | 38 | |||||||||
| Ion System Installed Base under Operating Leasing Arrangements | |||||||||||
| Fixed-payment operating lease arrangements | 123 | 117 | |||||||||
| Usage-based operating lease arrangements | 239 | 179 | |||||||||
| Total Ion system installed base under operating leasing arrangements | 362 | 296 | |||||||||
Nine Months Ended September 30, 2025
Product revenue increased by 21% to $6.05 billion for the nine months ended September 30, 2025, compared to $4.98 billion for the nine months ended September 30, 2024.
Instruments and accessories revenue increased by 19% to $4.36 billion for the nine months ended September 30, 2025, compared to $3.67 billion for the nine months ended September 30, 2024. The increase in instruments and accessories revenue was primarily driven by approximately 18% higher da Vinci procedure volume and approximately 54% higher Ion procedure volume. The year-to-date 2025 U.S. da Vinci procedure growth was approximately 14%, driven primarily by strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and appendectomy procedures, as well as growth in gynecological procedures. The number of U.S. da Vinci bariatric procedures continued to decline in the high-single digits in the first nine months of 2025 compared with the first nine months of 2024. The year-to-date 2025 OUS da Vinci procedure growth was approximately 24%, driven by growth in general surgery procedures, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures, most notably hysterectomy procedures. Geographically, the year-to-date 2025 OUS da Vinci procedure growth was driven by several markets with particular strength in India and South Korea.
Systems revenue increased by 29% to $1.69 billion for the nine months ended September 30, 2025, compared to $1.31 billion for the nine months ended September 30, 2024. The higher year-to-date 2025 system revenue was primarily driven by an increase in da Vinci system placements, including a decrease in the proportion of da Vinci system placements under operating leases, higher operating lease revenue, and higher year-to-date 2025 ASPs, driven by an increase in da Vinci 5 system placements.
During the nine months ended September 30, 2025, a total of 1,189 da Vinci surgical systems were placed compared to 1,033 systems during the nine months ended September 30, 2024. By geography, 683 systems were placed in the U.S., 224 in Europe, 181 in Asia, and 101 in other OUS markets during the nine months ended September 30, 2025, compared to 516 systems placed in the U.S., 220 in Europe, 225 in Asia, and 72 in other OUS markets during the nine months ended September 30, 2024. The increase in system placements was primarily driven by continued demand for additional capacity by
our customers as a result of procedure growth as well as increased demand for our next-generation da Vinci 5 system, including the impact from customers beginning to trade in fourth-generation da Vinci systems.
The following table summarizes our da Vinci system placements and systems installed at customers under leasing arrangements:
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Da Vinci System Placements under Leasing Arrangements
|
|||||||||||
| Fixed-payment operating lease arrangements | 276 | 227 | |||||||||
| Usage-based operating lease arrangements | 346 | 327 | |||||||||
| Total da Vinci system placements under operating lease arrangements | 622 | 554 | |||||||||
| % of Total da Vinci system placements | 52% | 54% | |||||||||
| Sales-type lease arrangements | 28 | 45 | |||||||||
| Total da Vinci system placements under leasing arrangements | 650 | 599 | |||||||||
| Da Vinci System Installed Base under Operating Leasing Arrangements | |||||||||||
| Fixed-payment operating lease arrangements | 1,379 | 1,289 | |||||||||
| Usage-based operating lease arrangements | 1,736 | 1,352 | |||||||||
| Total da Vinci system installed base under operating leasing arrangements | 3,115 | 2,641 | |||||||||
Operating lease revenue, including the contribution from Ion systems, was $632 million for the nine months ended September 30, 2025, of which $380 million was variable lease revenue related to usage-based arrangements, compared to $473 million for the nine months ended September 30, 2024, of which $237 million was variable lease revenue related to usage-based arrangements. Revenue from Lease Buyouts was $91 million for the nine months ended September 30, 2025, compared to $81 million for the nine months ended September 30, 2024. We expect revenue from Lease Buyouts to fluctuate period to period depending on the timing of when, and if, customers choose to exercise buyout options embedded in their leases.
The da Vinci surgical system ASP, excluding systems placed under fixed-payment or usage-based operating lease arrangements, Ion systems, and the impact of specified-price trade-in rights, was approximately $1.57 million for the nine months ended September 30, 2025, compared to approximately $1.44 million for the nine months ended September 30, 2024. The higher year-to-date 2025 ASP was largely driven by favorable product mix, including from da Vinci 5 system placements, partially offset by more trade-ins. ASP fluctuates from period to period based on geographic and product mix, product pricing, systems placed involving trade-ins, and changes in foreign exchange rates.
During the nine months ended September 30, 2025, 153 Ion systems were placed compared to 202 systems during the nine months ended September 30, 2024. By geography, 133 systems were placed in the U.S., 11 in Europe, 6 in Asia, and 3 in other markets during nine months ended September 30, 2025, compared to 191 systems placed in the U.S. and 9 in Europe during the nine months ended September 30, 2024. In the U.S., where we estimate that penetration of lung biopsy is approaching the halfway point, our customers' focus has begun to shift from increasing capacity to increasing utilization of their existing systems. As of September 30, 2025, we had an Ion system installed base of approximately 954 systems, compared to an installed base of approximately 736 systems as of September 30, 2024.
The following table summarizes our Ion system placements and systems installed at customers under leasing arrangements:
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Ion System Placements under Leasing Arrangements
|
|||||||||||
| Fixed-payment operating lease arrangements | 38 | 61 | |||||||||
| Usage-based operating lease arrangements | 42 | 54 | |||||||||
| Total Ion system placements under operating lease arrangements | 80 | 115 | |||||||||
| % of Total Ion system placements | 52% | 57% | |||||||||
| Sales-type lease arrangements | 10 | 2 | |||||||||
| Total Ion system placements under leasing arrangements | 90 | 117 | |||||||||
| Ion System Installed Base under Operating Leasing Arrangements | |||||||||||
| Fixed-payment operating lease arrangements | 123 | 117 | |||||||||
| Usage-based operating lease arrangements | 239 | 179 | |||||||||
| Total Ion system installed base under operating leasing arrangements | 362 | 296 | |||||||||
Service Revenue
Service revenue increased by 20% to $396 million for the three months ended September 30, 2025, compared to $329 million for the three months ended September 30, 2024. The increase in service revenue was primarily driven by a larger installed base of systems producing service revenue and favorable product mix, including from da Vinci 5 system placements.
Service revenue increased by 20% to $1.15 billion for the nine months ended September 30, 2025, compared to $0.96 billion for the nine months ended September 30, 2024. The increase in service revenue was primarily driven by a larger installed base of systems producing service revenue and favorable product mix, including from da Vinci 5 system placements.
Gross Profit
Product
Product gross profit for the three months ended September 30, 2025, increased by 22% to $1.41 billion, representing 66.8% of product revenue, compared to $1.15 billion, representing 67.5% of product revenue, for the three months ended September 30, 2024. The lower product gross profit margin for the three months ended September 30, 2025, was primarily driven by the impact of tariffs.
Product gross profit for the nine months ended September 30, 2025, increased by 20% to $3.99 billion, representing 66.0% of product revenue, compared to $3.33 billion, representing 66.9% of product revenue, for the nine months ended September 30, 2024. The lower product gross profit margin for the nine months ended September 30, 2025, was primarily driven by the impact of tariffs, higher costs associated with the phased launch of our da Vinci 5 surgical system, and incremental fixed overhead costs, including depreciation expense, associated with expanded manufacturing capacity in the U.S., partially offset by lower excess and obsolete inventory charges.
Product gross profit for the three and nine months ended September 30, 2025, included share-based compensation expense of $31.5 million and $92.0 million, respectively, compared with $24.9 million and $71.2 million for the three and nine months ended September 30, 2024, respectively. Product gross profit for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $2.2 million and $6.7 million, respectively, compared with $2.2 million and $9.3 million for the three and nine months ended September 30, 2024, respectively.
Compared to historical levels, our capital expenditures increased in 2024 and 2025 as a result of the investments made to build the infrastructure needed to scale our business. Therefore, in 2025, depreciation expense has increased and is expected to continue to increase as additional projects are placed in service, which may impact our future gross profit margin.
Service
Service gross profit for the three months ended September 30, 2025, increased by 15% to $253 million, representing 63.8% of service revenue, compared to $220 million, representing 66.9% of service revenue, for the three months ended September 30, 2024. The higher service gross profit for the three months ended September 30, 2025, was primarily driven by higher service revenue, reflecting a larger installed base of da Vinci surgical systems, partially offset by a lower service gross profit margin. The lower service gross profit margin for the three months ended September 30, 2025, was primarily driven by higher costs associated with the phased launch of our da Vinci 5 surgical system, an unfavorable repair mix, incremental fixed costs,
including depreciation expense, and the impact of tariffs, partially offset by lower excess and obsolete inventory charges and lower logistics costs.
Service gross profit for the nine months ended September 30, 2025, increased by 13% to $746 million, representing 64.9% of service revenue, compared to $662 million, representing 69.0% of service revenue, for the nine months ended September 30, 2024. The higher service gross profit for the nine months ended September 30, 2025, was primarily driven by higher service revenue, reflecting a larger installed base of da Vinci surgical systems, and a lower service gross profit margin. The lower service gross profit margin for the nine months ended September 30, 2025, was primarily driven by higher costs associated with the phased launch of our da Vinci 5 surgical system, an unfavorable repair mix, incremental fixed costs, including depreciation expense, and the impact of tariffs, partially offset by lower logistics costs and lower excess and obsolete inventory charges.
Service gross profit for the three and nine months ended September 30, 2025, included share-based compensation expense of $8.8 million and $25.6 million, respectively, compared with $7.9 million and $22.5 million for the three and nine months ended September 30, 2024, respectively. Service gross profit for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $0.2 million and $0.6 million, respectively, compared with $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses include costs for sales, marketing, and administrative personnel, sales and marketing activities, trade show expenses, legal expenses, regulatory fees, and general corporate expenses.
Selling, general, and administrative expenses for the three months ended September 30, 2025, increased by 12% to $573 million, compared to $511 million for the three months ended September 30, 2024. The increase in selling, general, and administrative expenses for the three months ended September 30, 2025, was primarily driven by higher headcount and personnel-related expenses, including variable compensation and share-based compensation expense, and higher litigation charges, partially offset by lower legal expenses.
Selling, general, and administrative expenses for the nine months ended September 30, 2025, increased by 11% to $1.70 billion, compared to $1.53 billion for the nine months ended September 30, 2024. The increase in selling, general, and administrative expenses for the nine months ended September 30, 2025, was primarily driven by higher headcount and personnel-related expenses, including share-based compensation expense and variable compensation, and increased infrastructure costs to support our growth.
Selling, general, and administrative expenses for the three and nine months ended September 30, 2025, included share-based compensation expense of $88.1 million and $256.7 million, respectively, compared with $77.6 million and $225.4 million for the three and nine months ended September 30, 2024, respectively. Selling, general, and administrative expenses for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $0.1 million and $0.7 million, respectively, compared with $0.6 million and $2.2 million for the three and nine months ended September 30, 2024, respectively.
Research and Development Expenses
Research and development costs are expensed as incurred and primarily include costs associated with research and the design, development, testing, and significant enhancement of our products. Our main product development initiatives include multi-port, Ion, and SP platform investments as well as digital products and services and various research projects.
Research and development expenses for the three months ended September 30, 2025, increased by 15% to $329 million, compared to $286 million for the three months ended September 30, 2024. Research and development expenses for the nine months ended September 30, 2025, increased by 13% to $959 million, compared to $851 million for the nine months ended September 30, 2024. The increase in research and development expenses for the three and nine months ended September 30, 2025, was primarily driven by higher headcount and personnel-related expenses, including share-based compensation expense, and other project costs incurred to support a broad set of product development initiatives.
Research and development expenses for the three and nine months ended September 30, 2025, included share-based compensation expense of $77.6 million and $221.3 million, respectively, compared with $65.4 million and $188.7 million for the three and nine months ended September 30, 2024, respectively. Research and development expenses for the three and nine months ended September 30, 2025, included intangible asset-related charges of $1.4 million and $9.2 million, respectively, compared with $0.5 million and $1.7 million for the three and nine months ended September 30, 2024, respectively.
Research and development expenses fluctuate with project timing. Based upon our broader set of product development initiatives and the stage of the underlying projects, we expect to continue to make substantial investments in research and development and anticipate that research and development expenses will continue to increase in the future.
Interest and Other Income, Net
Interest and other income, net, for the three months ended September 30, 2025, increased by 2% to $95.5 million, compared to $93.7 million for the three months ended September 30, 2024. The increase in interest and other income, net, for the three months ended September 30, 2025, was primarily driven by unrealized gains on strategic investments (compared to unrealized losses during the three months ended September 30, 2024) and higher interest income earned due to higher average cash and investment balances, partially offset by foreign exchange losses, net of the impacts of derivatives and hedging (compared to foreign exchange gains during the three months ended September 30, 2024).
Interest and other income, net, for the nine months ended September 30, 2025, increased by 10% to $275 million, compared to $250 million for nine months ended September 30, 2024. The increase in interest and other income, net, for the nine months ended September 30, 2025, was primarily driven by higher interest income earned due to higher average cash and investment balances and an increase in average interest rates, partially offset by foreign exchange losses, net of the impacts of derivatives and hedging (compared to foreign exchange gains during the nine months ended September 30, 2024), and unrealized losses on strategic investments (compared to unrealized gains during the nine months ended September 30, 2024).
Income Tax Expense
Income tax expense for the three months ended September 30, 2025, was $146.0 million, or 17.1% of income before taxes, compared to $100.4 million, or 15.0% of income before taxes, for the three months ended September 30, 2024. Income tax expense for the nine months ended September 30, 2025, was $278.7 million, or 11.8% of income before taxes, compared to $214.5 million, or 11.5% of income before taxes, for the nine months ended September 30, 2024.
Our higher effective tax rate for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, was primarily due to a lower tax rate benefit from excess tax benefits, as discussed below, and lower federal research and development credit benefits, partially offset by lower U.S. taxes on foreign earnings.
Our provision for income taxes for the three months ended September 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $24.2 million and $42.2 million, respectively, which reduced our effective tax rate by 2.8 and 6.3 percentage points, respectively. Our provision for income taxes for the nine months ended September 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $202.5 million and $189.0 million, respectively, which reduced our effective tax rate by 8.6 and 10.1 percentage points, respectively. The amount of excess tax benefits or deficiencies will fluctuate from period to period based on the price of our stock, the volume of share-based awards settled or vested, and the value assigned to employee equity awards under GAAP, which results in increased income tax expense volatility.
On July 4, 2025, the One Big Beautiful Bill Act (the "OBBB Act") was enacted, introducing amendments to U.S. tax laws with various effective dates from 2025 to 2027. The changes introduced by the OBBB Act are not expected to have a material impact on our annual effective tax rate for 2025.
In 2021, the Organization for Economic Co-operation and Development ("OECD") established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate ("Pillar Two"). The OECD issued Pillar Two model rules and continues to release guidance on these rules. In January 2025, the OECD released additional guidance, which includes a limitation on certain deferred tax assets recognized after November 2021. Various countries, including Switzerland and EU member states, have enacted or have announced plans to enact new tax laws to implement the global minimum tax. We considered the applicable tax law changes and additional guidance on Pillar Two implementation in the relevant countries, and there is no material impact to our tax provision for the three and nine months ended September 30, 2025. We will continue to evaluate the impact of any additional guidance and tax law changes on future reporting periods.
We file federal, state, and foreign income tax returns in many jurisdictions in the U.S. and OUS. Years before 2020 are considered closed for significant jurisdictions. Certain of our unrecognized tax benefits could change due to activities of various tax authorities, including evolving interpretations of existing tax laws in the jurisdictions in which we operate, potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect our effective tax rate in the period in which they change.
We are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. Management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.
Liquidity and Capital Resources
Sources and Uses of Cash and Cash Equivalents
Our principal source of liquidity is cash provided by our operations. Cash and cash equivalents plus short- and long-term investments decreased by $0.40 billion to $8.43 billion as of September 30, 2025, from $8.83 billion as of December 31, 2024, primarily as a result of cash used for repurchases of common stock, capital expenditures, and taxes paid related to net share settlements of equity awards, partially offset by cash provided by operating activities and proceeds from stock option exercises and employee stock purchases.
Our cash requirements depend on numerous factors, including market acceptance of our products, the resources we devote to developing and supporting our products, and other factors. We expect to continue to devote substantial resources to expand procedure adoption and acceptance of our products. We have made substantial investments in our commercial operations, product development activities, facilities, and intellectual property. Based on our business model, we anticipate that we will continue to be able to fund future growth through cash provided by our operations. We believe that our current cash, cash equivalents, and investment balances, together with income to be derived from our business, will be sufficient to meet our liquidity requirements for the foreseeable future. However, we may experience reduced cash flow from operations as a result of macroeconomic and geopolitical headwinds.
See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Form 10-K for the fiscal year ended December 31, 2024, for discussion on the impact of interest rate risk and market risk on our investment portfolio.
Condensed Consolidated Cash Flow Data
The following table summarizes our cash flows (in millions):
| Nine Months Ended September 30, | |||||||||||
|
2025
|
2024
|
||||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | 2,138.0 | $ | 1,592.4 | |||||||
| Investing activities | 875.2 | (2,008.6) | |||||||||
| Financing activities | (2,226.6) | 101.5 | |||||||||
| Effect of exchange rates on cash, cash equivalents, and restricted cash | 0.5 | (9.1) | |||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | $ | 787.1 | $ | (323.8) | |||||||
Operating Activities
For the nine months ended September 30, 2025, net cash provided by operating activities of $2.14 billion exceeded our net income of $2.08 billion, primarily due to the following factors:
1.Our net income included non-cash charges of $1.08 billion, consisting primarily of share-based compensation of $585 million and depreciation expense and losses on the disposal of property, plant, and equipment of $446 million.
2.Changes in operating assets and liabilities resulted in $1.02 billion of cash used in operating activities during the nine months ended September 30, 2025. Inventory, including the transfer of equipment from inventory to property, plant, and equipment, increased by $810 million, primarily to address the growth in our business, including the expansion of our leasing business, and to mitigate risks of disruption that could arise from global supply chain shortages. Refer to Note 4 to the Financial Statements for further details in the supplemental cash flow information. Prepaids and other assets increased by $249 million, primarily driven by tax payments, an increase in lease incentive assets associated with operating leases, and new and extended facilities leases. Accrued compensation and employee benefits decreased by $80 million, primarily due to payments for 2024 incentive compensation and stock purchases related to our ESPP. The unfavorable impact of these items on cash provided by operating activities was partially offset by an increase in accounts payable of $97 million, primarily due to more inventory purchases, and an increase in deferred revenue of $48 million, primarily due to an increased volume of sales contracts.
Investing Activities
Net cash provided by investing activities for the nine months ended September 30, 2025, consisted primarily of proceeds from maturities and sales of investments, net of purchases of investments of $1.25 billion, partially offset by $377 million paid for the acquisition of property, plant, and equipment. We invest predominantly in high quality, fixed income securities. Our investment portfolio may, at any time, contain investments in money market funds, U.S. treasury and U.S. government agency
securities, high-quality corporate notes and bonds, commercial paper, non-U.S. government agency securities, and taxable and tax-exempt municipal notes.
Financing Activities
Net cash used in financing activities for the nine months ended September 30, 2025, consisted primarily of cash used in the repurchase of 4.4 million shares of our common stock for $2.09 billion and cash used for taxes paid on behalf of employees related to net share settlements of vested employee equity awards of $406 million, partially offset by cash proceeds from stock option exercises and employee stock purchases of $274 million.
Capital Expenditures
We expect to continue to invest in infrastructure needed to scale and supply our customers with highly differentiated products manufactured in highly automated factories to facilitate outstanding performance in product quality, availability, and cost. A significant portion of this investment involves the construction of facilities to expand our manufacturing and commercial capabilities. We have also been vertically integrating key technologies to develop a more robust supply chain, enabling us to bring important products to market at attractive price points. These integration efforts include increased ownership of our imaging pipelines and investments in strategic instruments and accessories technologies that allow us to serve our customers better. We expect these capital investments to range between $625 million and $675 million in 2025, the majority of which will be facilities-related investments. We intend to fund these capital investments with cash generated from operations.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate our critical accounting estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no new or material changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, that are of significance, or potential significance, to the Company.
Intuitive Surgical Inc. published this content on October 22, 2025, and is solely responsible for the information contained herein. Distributed via EDGAR on October 22, 2025 at 21:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]