Intuitive(ISRG) - 2025 Q4 - Annual Report

Surgical Systems and Technology - The recently launched da Vinci 5 surgical system features over 10,000 times the computing power of the da Vinci Xi, enhancing capabilities and integrating with applications like My Intuitive and SimNow[27]. - The Ion endoluminal system, cleared by the FDA in 2019, is designed for minimally invasive lung biopsies, utilizing a flexible catheter that articulates 180 degrees for better access to lung lesions[34][35]. - The da Vinci surgical systems include advanced features such as the Firefly Fluorescence Imaging, which allows real-time identification of vasculature and tissue perfusion during surgery[32]. - The SureForm staplers, including the newly introduced 8 mm SureForm 30 Curved-Tip stapler, are designed for precision in various surgical procedures, integrating SmartFire technology for consistent staple lines[39]. - The E-200 generator, recently introduced, provides high-frequency energy for cutting and coagulation, compatible with multiple da Vinci surgical systems and third-party instruments[40][41]. - Integrated Table Motion allows real-time adjustments of the operating table during procedures, enhancing surgical access and positioning[33]. - The da Vinci surgical systems are equipped with a 3DHD vision system that provides high-resolution imaging, essential for precise surgical operations[31]. - The da Vinci surgical systems are designed to reduce surgeon fatigue through ergonomic console design and natural hand-eye alignment[28][29]. - The company focuses on five surgical specialties, including general surgery and urologic surgery, with over 70 representative clinical uses for da Vinci surgical systems[72]. - Robotic-assisted surgery with the da Vinci system has been shown to increase surgical revenue and reduce costs through lower complication rates and shorter patient stays[71]. - The da Vinci surgical system has enabled a significant shift from open surgical techniques to minimally invasive techniques, improving patient outcomes[80]. - The company collaborates with leading surgeons to explore new techniques and applications for robotic-assisted surgery, continuously refining its offerings[87]. Training and Support - Intuitive offers a comprehensive training program, including the SimNow platform, which utilizes 3D simulation technology to enhance surgeon training and proficiency[53]. - The company maintains a network of field service engineers across the U.S., Canada, Europe, and Asia, providing 24/7 technical support and proactive system health monitoring[55]. - The My Intuitive mobile and web application provides customers with access to individual or program-level data, enabling comparisons with anonymized national benchmarks[63]. - The My Intuitive+ digital subscription package allows da Vinci users to access surgical video and data to understand their surgical performance better[64]. Financial Performance and Revenue - Domestic revenue accounted for 68%, 67%, and 66% of total revenue for the years ended December 31, 2025, 2024, and 2023, respectively, while revenue from OUS markets accounted for 32%, 33%, and 34%[89]. - The company expects continued growth in its clinical sales team as the installed base of da Vinci surgical systems and Ion endoluminal systems expands[92]. - The company experiences seasonal fluctuations, with higher procedure volumes in the fourth quarter and lower volumes in the first quarter due to hospital budget resets[94]. - In 2025, net cash provided by operating activities was $3.03 billion, exceeding net income of $2.88 billion[526]. - The company experienced an increase in accounts receivable of $302 million due to increased sales and timing of billings[526]. - Inventory increased by $1.06 billion to address business growth and mitigate supply chain risks[527]. - Non-cash charges included $1.43 billion, primarily from share-based compensation of $788 million and depreciation of $615 million[527]. - The company’s investing activities resulted in a cash outflow of $665.8 million in 2025, compared to an outflow of $3.27 billion in 2024[525]. - Net cash used in financing activities for 2025 included $2.3 billion for repurchasing 4.8 million shares and $419 million for taxes related to employee equity awards[532]. Regulatory Compliance and Market Access - The FDA regulates the company's products as Class II medical devices, requiring premarket notification for commercial distribution[110]. - The company must obtain new 510(k) clearance or PMA approval for any modifications that significantly affect device safety or effectiveness[115]. - Compliance with the Quality Management System Regulation (QMSR) is necessary for continued marketing of cleared or approved products in the U.S.[117]. - The company received regulatory clearance for the da Vinci SP surgical system in Japan in September 2022, expanding its product offerings[126]. - The EU Medical Devices Regulation (EU MDR) requires compliance for marketing medical devices in the EU, with new requirements for post-market surveillance and vigilance[127]. - The company has received higher reimbursement rates for certain da Vinci procedures in Japan compared to conventional methods, impacting adoption rates[126]. - Regulatory approvals in foreign markets, including China and Japan, are critical for the company's revenue generation and market access[124][126]. - The company is subject to various healthcare laws that may impact its business operations and financial arrangements[120]. - Non-compliance with FDA regulations can lead to significant penalties, including product recalls and operational restrictions[121]. - The company must demonstrate compliance with general safety and performance requirements to obtain CE marking for devices marketed in the EU[130]. Workforce and Corporate Responsibility - The company had approximately 17,021 full-time employees as of December 31, 2025, with a turnover rate of 9.3%[158]. - The Intuitive Foundation has contributed $240 million since its inception in 2018 to promote health and education[176]. - The company aims for fair and equitable pay, with a 2025 pay equity audit revealing an adjusted pay gap deviation of approximately 0.5% or less for each gender and race[169]. - The company operates in 29 countries, with a diverse workforce contributing to its mission[158]. - The company’s employee engagement score was 92% in 2025, indicating strong commitment to its mission[174]. Investment and Growth - The company continues to build infrastructure for manufacturing and commercial capabilities, focusing on vertical integration of key technologies[535]. - The company has invested $70 million of the $100 million Intuitive Ventures Fund I focused on healthcare outcomes as of December 31, 2025[538]. - Intuitive Ventures Fund II, launched in 2023, has seen $30 million invested out of a total of $150 million[539].