Intuitive(ISRG)

Search documents
ISRG's Post-Earnings Slide: Margin Worries Overshadow Growth Story
ZACKS· 2025-08-12 13:21
Core Viewpoint - Intuitive Surgical (ISRG) reported strong second-quarter fiscal 2025 results with a solid top-line beat and healthy procedure growth, but shares fell over 7% due to concerns about margin pressures, cost headwinds, and demand risks overshadowing the positives [1][8]. Financial Performance - ISRG's stock declined by 7.7% since July 22, underperforming the industry growth of 0.7% and peers like Medtronic (MDT) and Zimmer Biomet (ZBH), which gained 1.1% and 3.6% respectively [2]. Margin and Cost Pressures - Management indicated that recently enacted tariffs will negatively impact cost of sales by approximately 100 basis points in 2025, compounding existing pressures from higher facility costs and increased service costs related to the da Vinci 5 rollout [3]. - Pro-forma gross margin decreased to 67.9% from 70% year-over-year [3]. Capital Expenditure Risks - Ongoing budgetary constraints in international markets such as Japan, China, and parts of Europe may slow hospital capital spending, with potential U.S. CapEx risks if macro or policy pressures intensify [4]. Procedure Mix and Revenue Impact - A shift in procedure mix is dampening revenue per case, with fewer bariatric procedures leading to lower instrument and accessory revenues, while an increase in cholecystectomy procedures, which yield lower revenue, adds to the pressure [5]. - A higher mix of trade-in transactions and expectations for increased leasing may weigh on near-term capital sales [5]. Operating Expenses - Rising headcount and increased depreciation from newly commissioned facilities are driving higher operating expenses, limiting near-term operating leverage [6]. Growth Opportunities - The da Vinci 5 platform is gaining traction, with increasing procedures and placements, despite near-term margin pressures [8][13]. - ISRG has secured approvals for new instruments and procedures, expanding the addressable market and offering opportunities for higher instrument and accessory utilization per case [17]. - The company continues to expand its footprint internationally, contributing meaningfully to top-line growth [18]. Long-Term Growth Potential - Management is committed to developing Intuitive Telepresence, a platform for remote surgeries, which could significantly extend the reach of skilled surgeons and address surgical expertise shortages [19][20]. - If successful, telesurgery could create multi-billion-dollar incremental opportunities, opening new revenue streams alongside traditional system sales [21]. Investment Considerations - The post-earnings pullback reflects investor concerns regarding margin resilience amid tariffs, cost inflation, and an evolving procedure mix [22]. - Structural tailwinds remain compelling, with the da Vinci 5's clinical differentiation and ongoing international market penetration providing avenues for growth [23]. - Investors will focus on milestones such as tariff mitigation strategies, gross-margin stabilization, and easing supply constraints for high-value da Vinci 5 instruments [24].
2 Surefire Stocks to Invest $1,000 in for the Long Haul
The Motley Fool· 2025-08-10 11:00
Core Viewpoint - Investing in well-established companies like Alphabet and Intuitive Surgical can yield strong long-term returns despite short-term challenges [2][3]. Group 1: Alphabet - Alphabet is currently undervalued among trillion-dollar tech leaders, facing potential antitrust lawsuits in the U.S. regarding its Chrome browser [5]. - The company reported a 14% year-over-year revenue growth to $96.4 billion, with net earnings per share (EPS) of $2.31, up 22.2% compared to the previous year [6]. - Alphabet's cloud division, Google Cloud, has a revenue run rate exceeding $50 billion, indicating strong growth potential in cloud computing and AI [6][8]. - The diversification of Alphabet's business reduces reliance on advertising, which is crucial if the company loses Chrome [7]. - Alphabet has significant free cash flow of $5.3 billion and plans to invest $85 billion in capital expenditures to support growth opportunities [9]. - The company is well-positioned to outperform the market over the next decade, with an investment of $1,000 allowing the purchase of five shares [10]. Group 2: Intuitive Surgical - Intuitive Surgical leads the robotic-assisted surgery (RAS) market but has faced challenges this year due to tariffs impacting earnings [11]. - The company reported second-quarter revenue of $2.44 billion, a 21% increase year-over-year, driven by a 17% rise in procedures using the Da Vinci System [12]. - Adjusted EPS for Intuitive Surgical was $2.19, reflecting a 23% increase compared to the previous year [13]. - High switching costs and a lack of competition in the RAS field provide Intuitive Surgical with a strong market position [14]. - The aging population presents significant growth opportunities, as RAS procedures currently capture only 5% of eligible surgeries [15]. - Despite current stock performance, Intuitive Surgical has the potential for superior long-term returns, with $1,000 allowing the purchase of two shares [16].
ISRG's Ion Platform Sees Uptick in Utilization, Eyes Efficiency
ZACKS· 2025-08-05 12:36
Core Insights - Intuitive Surgical's Ion platform achieved a 52% year-over-year increase in procedures, reaching approximately 35,000 in Q2 2025, with system utilization rising by 8% [1][11] - The company is focusing on workflow optimization and operational efficiency to enhance Ion's profitability, despite a decrease in system placements from 74 to 54 units [2][11] - Intuitive Surgical aims to boost utilization growth in the U.S. while expanding internationally, with initial commercial procedures completed in Australia and Korea [3] Utilization and Revenue - Higher utilization of the Ion platform not only improves hospitals' return on investment but also increases recurring revenue through instrument and accessory sales [4] - The 8% growth in utilization, while incremental, is significant in the capital equipment sector, potentially enhancing customer loyalty and long-term value [5] Competitive Landscape - Stryker's Mako platform is experiencing strong global utilization growth and record installations, contributing to higher recurring revenues [7][8] - Zimmer Biomet's ROSA platform is seeing ongoing adoption in knee procedures, although results are more muted compared to competitors [9][10] Financial Performance - Intuitive Surgical's shares have declined by 7.4% year-to-date, compared to a 10.7% decline in the industry [14] - The company trades at a forward price-to-earnings ratio of 55.05, which is above the industry average but lower than its five-year median of 72.26 [15] - The Zacks Consensus Estimate for Intuitive Surgical's 2025 earnings suggests an 11.3% increase from the previous year [17]
美股市场速览:市场突发回撤,大盘价值刚性较优
Guoxin Securities· 2025-08-03 07:04
Investment Rating - The report maintains a "Weaker than Market" rating for the U.S. stock market [1] Core Insights - The U.S. stock market experienced a sudden pullback influenced by non-farm employment data, with the S&P 500 declining by 2.4% and the Nasdaq by 2.2% [3] - Among sectors, large-cap value stocks outperformed large-cap growth and small-cap stocks, indicating a preference for stability in turbulent market conditions [3] - The report highlights that three sectors saw gains while 21 sectors faced declines, with utilities, food and staples retailing, and media and entertainment being the only sectors to rise [3] Summary by Sections Price Trends - The S&P 500 fell by 2.4% and the Nasdaq by 2.2% this week, with large-cap value stocks declining by 1.8% compared to a 3.1% drop in large-cap growth stocks [3] - Utilities (+1.6%), food and staples retailing (+0.9%), and media and entertainment (+0.2%) were the only sectors to increase, while transportation (-5.9%), materials (-5.1%), and retail (-4.8%) faced the largest declines [3] Fund Flows - The estimated fund flow for S&P 500 constituents was -$16.95 billion this week, a significant increase from the previous week's -$2.2 billion [4] - Media and entertainment (+$1.59 billion), utilities (+$0.27 billion), and food and staples retailing (+$0.042 billion) saw inflows, while healthcare equipment and services (-$3.47 billion) and financials (-$4.15 billion) experienced the largest outflows [4] Earnings Forecast - The report indicates a 0.6% upward adjustment in the 12-month EPS forecast for S&P 500 constituents, with 18 sectors seeing an increase and 5 sectors experiencing downgrades [5] - Retail (+3.3%), media and entertainment (+2.0%), and technology hardware (+1.5%) led the upward revisions, while healthcare equipment and services faced a significant downgrade of -3.6% [5]
年入超10亿?2024最赚钱的医疗科技CEO TOP10
思宇MedTech· 2025-07-29 08:29
Core Insights - The article highlights the significant increase in CEO compensation within the global medical technology sector, with the top ten MedTech CEOs earning nearly $680 million in total, reflecting an average year-on-year increase of 46% [1]. Group 1: CEO Compensation Overview - DaVita's CEO, Javier Rodriguez, saw his total income rise to $164.07 million, a staggering increase of 317.29%, primarily due to the cashing out of a high-value stock option granted in 2019 [4]. - Thermo Fisher Scientific's CEO, Marc Casper, earned a total of $116.32 million, up 43.85%, following a strategic acquisition of Olink for $3.1 billion [7]. - Stryker's CEO, Kevin Lobo, reported a total income of $78.94 million, a 32.46% increase, driven by significant acquisitions and internal growth strategies [10]. - Boston Scientific's CEO, Michael Mahoney, achieved a total income of $63.31 million, marking a 64.88% increase, largely due to the success of the Farapulse system and multiple acquisitions [13]. - Intuitive's former CEO, Gary Guthart, earned $54.99 million, a 31.50% increase, as he oversaw major upgrades to the da Vinci platform [16]. - Solventum's CEO, Bryan Hanson, reported a total income of $44.40 million, an 85.80% increase, following the company's successful IPO and strategic divestitures [19]. - Abbott's CEO, Robert Ford, earned $41.15 million, a 36.30% increase, as the company returned to growth post-COVID [22]. - Johnson & Johnson MedTech's CEO, Joaquin Duato, experienced a decline in total income to $40.12 million, down 18.63%, despite the company's revenue growth [25]. - Masimo's former CEO, Joe Kiani, earned $38.11 million, a 54.73% increase, despite being ousted from the company [28]. - Danaher's CEO, Rainer Blair, reported a total income of $38.10 million, a 17.16% increase, as the company shifted focus from acquisitions to internal innovation [30]. Group 2: Trends in Executive Compensation - The article notes that stock option cash-outs significantly influenced the income spikes for CEOs at companies like DaVita and Intuitive, with some executives earning over $100 million in a single year [31]. - There is a trend towards increasing performance-based incentives, as seen in companies like Thermo Fisher and Abbott, which are moving away from time-based RSUs to align more closely with shareholder interests [31]. - Organizational changes and leadership transitions at companies like Sonova and Masimo are closely linked to executive compensation, indicating a strategic alignment between pay and company direction [31].
高盛聚焦“有钱的老年人”,脑机接口、基因药物是中国高端自费医疗的未来
Hua Er Jie Jian Wen· 2025-07-29 03:53
Core Insights - The rise of the "silver economy" indicates that the high-net-worth elderly population is expected to become a significant growth engine for the market [1][5]. Group 1: Market Dynamics - Goldman Sachs reports that the medical expenditures of individuals aged 50 and above with net assets exceeding 3 million yuan will be a key driver for the growth of the high-end medical market in China [2]. - This demographic, while only representing 3% of the population over 50, currently contributes 5% of total medical expenditures, which is projected to increase to 13% by 2035 as their population share grows to 5% [3][8]. - The medical spending of this group is expected to rise from 221 billion yuan in 2024 to 963 billion yuan by 2035, reflecting a compound annual growth rate (CAGR) of 14.3%, significantly higher than the overall elderly population growth rate of 5.3% and the all-age growth rate of 4.7% [3][7]. Group 2: Self-Payment Market - As national health insurance budgets tighten, the role of out-of-pocket (OOP) medical expenses is becoming increasingly important, with the self-payment ratio expected to rise from 65% in 2024 to 86% by 2035 [4][9]. - This shift indicates that traditional models reliant on insurance reimbursements are inadequate for meeting the needs of this affluent elderly demographic, which prefers high-quality, elective medical services [9]. Group 3: Health Trends and Opportunities - The report highlights a rising incidence of diseases such as tooth loss, cataracts, and diabetes among the over-50 population, suggesting a growing demand for early screening, preventive care, and high-quality treatment options [10]. - Companies that offer high-end and self-paid medical products are expected to benefit significantly, with revenue growth projected at 13%-21% CAGR, outpacing other business segments [11]. Group 4: Emerging Technologies - The report emphasizes the potential of cutting-edge technologies such as brain-machine interfaces, gene therapies, and rehabilitation robotics to reshape the healthcare industry [4][12]. - The global market for gene medicine is estimated to reach $4.8 trillion, driven by advancements in CRISPR/Cas9 technology and decreasing gene sequencing costs [12]. - Although these technologies are still in early stages, their early applications in healthcare present significant opportunities for growth in the high-end self-pay medical market [13].
ISRG's Gross Margin Falls on Product Transition and Trade Pressures
ZACKS· 2025-07-28 13:21
Core Insights - Intuitive Surgical (ISRG) reported a second-quarter 2025 gross margin of 67.9%, down from 70% in the prior-year period, indicating structural shifts in operations and product mix [1][9] - The margin contraction is driven by the increasing contribution of newer, lower-margin platforms, particularly the da Vinci 5 and Ion systems, which have higher manufacturing and service costs [2][5] - Depreciation from recent capacity investments, including a new facility in Bulgaria, adds overhead costs, impacting short-term margins [3][9] - Tariff-related expenses reduced gross margin by approximately 60 basis points in Q2, with an expected annual drag of about 100 basis points [4][9] - Management anticipates long-term margin recovery through scale efficiencies and increased procedure volumes, despite near-term volatility [5][9] Peer Performance - Boston Scientific (BSX) reported an adjusted gross margin of 69.4%, down 100 basis points year over year, primarily due to inventory charges, but benefited from a favorable product mix [6] - Thermo Fisher (TMO) had an adjusted gross margin of 41.3%, down about 80 basis points, impacted by tariffs and foreign exchange, though productivity gains helped cushion the decline [7] Valuation and Estimates - ISRG shares have lost 5% year-to-date, compared to the industry's decline of 6.8% [8] - The forward price-to-earnings ratio for ISRG is 56.6, above the industry average but lower than its five-year median of 72.4 [11] - The Zacks Consensus Estimate for ISRG's 2025 earnings implies an 11.3% rise from the previous year [12]
Where Will Intuitive Surgical Be in 5 Years?
The Motley Fool· 2025-07-26 11:00
Core Viewpoint - Intuitive Surgical has a strong history of wealth creation for long-term shareholders, with stock returns exceeding 25,000% since its IPO in 2000, driven by its pioneering role in robotic-assisted surgery [1] Company Performance - The da Vinci system remains the company's flagship product, contributing to profitable growth from an expanding installed base [2] - As of June 30, there are 10,488 da Vinci systems installed globally, which performed 17% more procedures in Q2 compared to the previous year, indicating healthy growth [9] - The company estimates its core addressable market at approximately 8 million annual soft tissue procedures, with over 3 million procedures expected this year, suggesting solid growth potential [10] Financial Metrics - Intuitive Surgical currently has a price-to-earnings (P/E) ratio of 75, with analysts projecting an average earnings growth of 13.8% annually in the long term [4] - The company has zero debt, is highly profitable, and holds $4.5 billion in cash, allowing for potential share repurchases to enhance earnings per share [11] Market Sentiment - The broader S&P 500 healthcare sector is trading near the low end of its 52-week range, indicating a lack of popularity for healthcare stocks at this time [5] - Market sentiment is currently unfavorable for the healthcare sector, which may be impacting Intuitive Surgical's stock price [6] Future Projections - Based on a 13.8% growth rate applied to trailing-12-month earnings per share of $6.82, potential future stock prices by July 2030 could range from $456 to $976 depending on the P/E ratio [12] - The company may face a period of underwhelming returns if its valuation adjusts to more appropriate levels for its expected growth [13]
Can ISRG's Strong Q2 Procedure Volume Translate Into Durable EPS Upside?
ZACKS· 2025-07-25 13:41
Core Insights - Intuitive Surgical (ISRG) reported a strong second-quarter 2025 performance with procedure volumes increasing by 17% year over year, driven by growth in general surgery and gynecology, particularly in hernia repair, bariatrics, and colorectal procedures [1][9] - Despite robust procedure growth, gross margin declined by 200 basis points to 67.9% due to higher component and logistics costs, foreign exchange pressures, and a higher mix of new platforms like da Vinci 5, which have lower margins [2][9] - The company placed 395 da Vinci systems in the second quarter, with a growing mix of operating leases that may depress near-term revenue but provide long-term recurring benefits [3] - ISRG reiterated its 2025 margin guidance of 66-67% and emphasized operational efficiency improvements through automation, scale, and digital tools [4][9] - Near-term EPS expansion will depend on managing margin pressures from foreign exchange, inflation, and platform mix, but operational efficiencies could lead to durable EPS growth [5] Peer Performance - Globus Medical (GMED) reported strong first-quarter 2025 results with net sales of $598.1 million and adjusted EPS of 68 cents, benefiting from integration with NuVasive and volume-driven growth in musculoskeletal solutions [6] - Zimmer Biomet (ZBH) achieved first-quarter 2025 sales of $1.91 billion, a 2.3% increase at constant currency, with adjusted EPS of $1.81, despite modest EPS pressure from tariffs and acquisition costs [7] Valuation and Estimates - ISRG shares have declined by 6.4% year-to-date, compared to the industry's decline of 7.7% [8] - The company trades at a forward price-to-sales ratio of 16.7, above the industry average but below its five-year median of 17.1, with a Value Score of D [11] - The Zacks Consensus Estimate for ISRG's 2025 earnings suggests a 6.8% increase from the previous year [12]
Intuitive(ISRG) - 2025 Q2 - Quarterly Report
2025-07-23 20:53
[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Intuitive Surgical's unaudited condensed consolidated financial statements present the company's financial position and performance for the period [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$20.16 billion** driven by cash, while liabilities remained stable and equity grew Condensed Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$20,163.2** | **$18,743.2** | | Total current assets | $8,745.9 | $7,111.0 | | Cash and cash equivalents | $3,403.1 | $2,027.4 | | Inventory | $1,667.0 | $1,487.2 | | **Total Liabilities** | **$2,210.1** | **$2,213.6** | | Total current liabilities | $1,692.6 | $1,745.3 | | **Total Stockholders' Equity** | **$17,953.1** | **$16,529.6** | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For Q2 2025, total revenue grew **21.4%** to **$2.44 billion** with net income rising **25.0%** to **$658.4 million**, reflecting strong performance Q2 2025 vs Q2 2024 Performance (in millions, except per share amounts) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$2,440.0** | **$2,009.9** | **+21.4%** | | Product Revenue | $2,048.8 | $1,692.6 | +21.0% | | Service Revenue | $391.2 | $317.3 | +23.3% | | Gross Profit | $1,617.9 | $1,372.7 | +17.9% | | Income from Operations | $743.4 | $567.3 | +31.0% | | **Net Income Attributable to Intuitive** | **$658.4** | **$526.9** | **+25.0%** | | Diluted EPS | $1.81 | $1.46 | +24.0% | H1 2025 vs H1 2024 Performance (in millions, except per share amounts) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$4,693.4** | **$3,900.5** | **+20.3%** | | Gross Profit | $3,075.6 | $2,618.1 | +17.5% | | Income from Operations | $1,321.5 | $1,036.7 | +27.5% | | **Net Income Attributable to Intuitive** | **$1,356.8** | **$1,071.8** | **+26.6%** | | Diluted EPS | $3.72 | $2.97 | +25.3% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$1.30 billion** for the six months ended June 30, 2025, with investing activities providing cash and financing activities using cash Cash Flow Summary for Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,297.0 | $885.9 | | Net cash provided by (used in) investing activities | $474.2 | $(595.6) | | Net cash provided by (used in) financing activities | $(383.6) | $3.3 | | **Net increase in cash, cash equivalents, and restricted cash** | **$1,384.1** | **$296.7** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, financial instruments, revenue recognition, and legal contingencies, including the company's business and investment portfolio - The company develops, manufactures, and markets the da Vinci surgical systems and the Ion endoluminal system, aiming to improve minimally invasive care[19](index=19&type=chunk) - Future results could be adversely affected by macroeconomic and geopolitical factors, including tariffs, supply chain challenges, inflation, and interest rates[23](index=23&type=chunk) - As of June 30, 2025, the company held **$9.53 billion** in cash, cash equivalents, and available-for-sale debt securities, primarily in U.S. treasuries and money market funds[30](index=30&type=chunk) - The company is involved in various legal proceedings, including product liability, patent, and commercial litigation, but cannot reasonably estimate potential losses for most cases at this time[68](index=68&type=chunk)[73](index=73&type=chunk)[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a **21%** revenue increase driven by strong procedure growth and system placements, alongside external factors and liquidity [Overview and Business Strategy](index=27&type=section&id=Overview%20and%20Business%20Strategy) Intuitive Surgical advances minimally invasive care through its da Vinci and Ion systems, focusing on the 'Quintuple Aim' and launching the new da Vinci 5 system - The company's mission is to advance minimally invasive care, guided by the 'Quintuple Aim' to deliver value to patients, clinicians, and healthcare systems[110](index=110&type=chunk)[111](index=111&type=chunk) - The da Vinci 5 surgical system, cleared by the FDA in March 2024, is in a phased launch, with the installed base reaching **689 units** as of June 30, 2025[117](index=117&type=chunk)[118](index=118&type=chunk) - The Ion endoluminal system for minimally invasive lung biopsies has received clearances in the U.S., Europe, South Korea, and China, with plans for further expansion[123](index=123&type=chunk) [External Factors and Market Environment](index=29&type=section&id=External%20Factors%20and%20Market%20Environment) The company faces significant external pressures including new U.S. tariffs, macroeconomic uncertainties, and increasing competition in the robotic-assisted surgical market - New U.S. tariffs on imports, including a **145%** tariff on Chinese goods (later reduced to **30%**), are expected to significantly increase cost of revenues in H2 2025[126](index=126&type=chunk)[127](index=127&type=chunk)[131](index=131&type=chunk) - Macroeconomic uncertainties, including inflation, high interest rates, and supply chain stress, could adversely affect operations and customer spending[132](index=132&type=chunk)[133](index=133&type=chunk) - Competition is growing, with third parties offering remanufactured instruments and several companies introducing or developing robotic-assisted medical procedure products[136](index=136&type=chunk)[189](index=189&type=chunk) [Business Model and Revenue Streams](index=30&type=section&id=Business%20Model%20and%20Revenue%20Streams) Intuitive's business model relies on upfront system sales combined with a significant and growing stream of recurring revenue from instruments, accessories, and service contracts - Recurring revenue (instruments, accessories, service, operating leases) is a core part of the business model, accounting for **84%** of total revenue in 2024[138](index=138&type=chunk)[142](index=142&type=chunk) - The company offers various leasing arrangements, with operating leases making up **51%** of da Vinci system placements in 2024, up from **39%** in 2022[147](index=147&type=chunk) - The installed base of da Vinci systems grew **15%** to approximately **9,902** as of December 31, 2024, driving growth in service and instrument revenue[144](index=144&type=chunk) [Procedures and System Demand](index=36&type=section&id=Procedures%20and%20System%20Demand) Procedure volume is a key performance indicator, with da Vinci procedures growing **17%** and Ion procedures **52%** year-over-year, alongside system placement trends Procedure Growth YoY (Q2 2025 vs Q2 2024) | Procedure Type | Q2 2025 Growth | Key Drivers | | :--- | :--- | :--- | | **Total da Vinci** | **~17%** | U.S. general surgery, OUS general surgery & urology | | U.S. da Vinci | ~14% | General surgery (cholecystectomy, hernia) | | OUS da Vinci | ~23% | Broad growth, especially in Asia and Europe | | **Total Ion** | **~52%** | Larger installed base, conversion from other modalities | System Placements (Q2 2025 vs Q2 2024) | System Type | Q2 2025 Placements | Q2 2024 Placements | | :--- | :--- | :--- | | **da Vinci** | **395** | **341** | | - da Vinci 5 | 180 | 70 | | **Ion** | **54** | **74** | [Results of Operations Analysis](index=41&type=section&id=Results%20of%20Operations%20Analysis) Q2 2025 total revenue increased **21%** to **$2.44 billion** driven by instruments and systems, despite a decline in product gross margin due to launch costs and tariffs Q2 2025 Revenue Breakdown (in millions) | Revenue Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Instruments and accessories | $1,474.1 | $1,244.4 | +18% | | Systems | $574.7 | $448.2 | +28% | | Service | $391.2 | $317.3 | +23% | | **Total Revenue** | **$2,440.0** | **$2,009.9** | **+21%** | - Product gross profit margin decreased from **68.1%** to **66.5%** in Q2 2025 YoY, primarily due to higher costs from the da Vinci 5 launch, new tariffs, and expanded manufacturing overhead[221](index=221&type=chunk) - Selling, general, and administrative (SG&A) expenses increased **7%** YoY to **$561 million** in Q2 2025, driven by higher headcount and compensation expenses[230](index=230&type=chunk) - Research and development (R&D) expenses grew **12%** YoY to **$313 million** in Q2 2025, reflecting increased investment in a broad set of product development initiatives[234](index=234&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with cash and investments totaling **$9.53 billion**, supported by robust operating cash flow and planned capital expenditures - As of June 30, 2025, cash, cash equivalents, and investments totaled **$9.53 billion**, an increase of **$0.70 billion** from year-end 2024[247](index=247&type=chunk) - Net cash from operating activities for the first six months of 2025 was **$1.30 billion**, up from **$885.9 million** in the same period of 2024[250](index=250&type=chunk)[251](index=251&type=chunk) - Capital expenditures for 2025 are projected to be between **$650 million** and **$725 million**, focused on expanding infrastructure and manufacturing[254](index=254&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states there have been no material changes in its market risk during the six months ended June 30, 2025 - There have been no material changes in market risk during the first six months of 2025[256](index=256&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of the end of the reporting period[258](index=258&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[259](index=259&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference information on legal proceedings detailed in Note 8 of the financial statements, covering product liability, patent, and commercial litigation - Information regarding legal proceedings is detailed in Note 8 to the Condensed Consolidated Financial Statements[260](index=260&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the detailed risk factors discussed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - The company refers to the risk factors disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024[261](index=261&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities but repurchased **349,550** shares for approximately **$181 million** during Q2 2025 Issuer Purchases of Equity Securities for Q2 2025 | Fiscal Period | Total Shares Repurchased | Average Price Paid Per Share | Approximate Dollar Amount Remaining for Purchase | | :--- | :--- | :--- | :--- | | April 2025 | — | $— | $1.1 billion | | May 2025 | 100 | $533.20 | $4.0 billion | | June 2025 | 349,450 | $517.69 | $3.8 billion | | **Total** | **349,550** | **$517.70** | **$3.8 billion** | - In May 2025, the Board increased the authorized amount for the stock repurchase program to **$4.0 billion**[82](index=82&type=chunk)[263](index=263&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) Several company executives and board members adopted Rule 10b5-1 trading plans between April and June 2025 to manage stock transactions - Between April and June 2025, several executives and directors adopted Rule 10b5-1 trading plans for the potential sale of company stock, including plans by CEO David J. Rosa, CFO Jamie E. Samath, and Executive Chair Gary S. Guthart[266](index=266&type=chunk)[268](index=268&type=chunk)[272](index=272&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, including required CEO and CFO certifications and XBRL data files - The report includes standard exhibits, such as CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and Inline XBRL documents[273](index=273&type=chunk)