Financial Data and Key Metrics Changes - The company reported net income of $35.2 million and earnings per diluted share of $1.57, representing increases of 17% and 28% respectively compared to the previous year [15] - Return on average assets was 1.87% and return on average tangible equity was 26.7%, up from 1.61% and 25.5% respectively in the same quarter last year [15] - Deposits totaled $6.4 billion, a decrease of $170 million year-over-year, primarily due to an increase in custodial deposits [15][16] - Average deposits during the quarter were approximately $90 million higher than the previous year [16] Business Line Data and Key Metrics Changes - Net interest income from commercial finance increased by $9.2 million due to higher balances and slightly higher yields [12][13] - Non-interest income showed solid results, particularly in core card and deposit fees, with growth attributed to new partners [14] - Loans and leases increased to $5 billion, driven by a $531 million increase in commercial finance loans, partially offset by a $148 million decrease in consumer finance loans [16] Market Data and Key Metrics Changes - The company experienced favorable deposit balances at multiple partners due to a strong holiday season and continued partner growth [16] - The government shutdown impacted secondary market revenues, but this is expected to recover in subsequent quarters [14][39] Company Strategy and Development Direction - The company aims to optimize its balance sheet by rotating from securities to loans, increasing net interest income without growing overall asset size [9] - Pathward is focused on financial inclusion, providing solutions for underserved and unbanked individuals and businesses [7] - The company is enhancing its operating model to better align with partners and support their growth [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth from new partnerships and the upcoming tax season, anticipating benefits from changes in tax code [10][11] - The company is optimistic about the impact of new partner announcements and the normalization of pricing in the industry [36][37] - Management highlighted the importance of monitoring new partners and the potential for increased loan originations throughout the year [44] Other Important Information - The company repurchased approximately 652,000 shares at an average price of $72.07, with 4.3 million shares still available for repurchase [19] - The fiscal year 2026 guidance for EPS has been increased to a range of $8.55-$9.05 [19] Q&A Session Summary Question: What is the adjusted NIM trajectory for Q2? - Management indicated that the adjusted NIM for Q2 is expected to be around 5.31%, with potential for it to be flat to up depending on the macroeconomic environment [21][22] Question: Can you quantify the recovery recorded within net charge-offs? - Management stated that specific quantification of the recovery is not available, but aggregate numbers can be found in the earnings release [23] Question: How does the emergence of FinTechs obtaining bank charters impact the company? - Management believes that while there may be some competition, the scale and complexity of operations required to match Pathward's offerings will take time for new entrants [25][26] Question: What is the embedded growth from new partners? - Management expects mid to high single-digit contributions from new partners once programs are launched and live [32][33] Question: What factors will influence the updated guidance? - The timing of new partner contributions and the success of the tax season are key factors that could push results toward the higher end of the guidance [38][40]

Financial Data and Key Metrics Changes - In Q4 2025, operating pre-provision net revenue increased by 27% from Q3, while operating net income rose by 19% compared to the previous quarter [8][10] - Full year 2025 results showed a 22% increase in operating pre-provision net revenue and a 31% increase in operating net income compared to 2024 [8] - Earnings per share (EPS) for Q4 was $0.72, a 6% increase year-over-year, while operating EPS was $0.82, up 15% from the prior year's fourth quarter [8][10] - Net interest margin expanded to 4.06% in Q4, up from 3.84% in Q3 and 3.64% in Q4 2024 [9] Business Line Data and Key Metrics Changes - Non-interest income for Q4 was $90 million on a GAAP basis, with an operating basis of $88 million, reflecting a $16 million sequential increase [10] - The commercial loan portfolio increased by 6% on an annualized basis, driven by new loan origination volume of $1.4 billion, which was up 23% from the year-ago quarter [18][19] - Customer fee income increased significantly, particularly in treasury management and international banking, contributing to a 26% increase in non-interest income for the full year 2025 compared to 2024 [20] Market Data and Key Metrics Changes - Total deposits decreased to $54.2 billion as of December 31, down from $55.8 billion at the end of Q3, primarily due to intentional reductions in brokered and select public deposits [12] - The company experienced seasonal decreases in customer accounts, which are expected to continue into Q1 2026 due to tax payments and other year-end payouts [19] Company Strategy and Development Direction - The acquisition of Pacific Premier Bank was highlighted as a strategic move to enhance the company's position in the Northwest and Southern California markets [3][4] - The company plans to continue targeted de novo growth in 2026, funded by resources set aside from previous expense initiatives [4] - The focus remains on profitability over growth for its own sake, with an emphasis on operational enhancement and consistent financial results [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong credit profile, which remained stable throughout 2025, unaffected by external events impacting peers [5] - The outlook for 2026 includes expectations for net interest margin to trend higher each quarter, surpassing 4% in the second or third quarter [15] - The company aims to maintain a conservative level of excess liquidity while optimizing its funding structure [16] Other Important Information - The company increased its common dividend to $0.37 per share from $0.36 and repurchased 3.7 million common shares at an average price of $27.07 [14] - The allowance for credit losses was reported at 1.02% of loans at quarter-end, indicating a stable credit environment [11] Q&A Session Summary Question: Can you talk more about the contributions from Pacific Premier? - Management noted that the integration has been positive, with excitement from the Pac Premier team and growth in existing customer relationships [24][25] Question: What is the outlook for earning assets? - The company expects earning assets to remain flat to modestly down in Q1, with a range of $60.5 billion to $61 billion [31][32] Question: How do you view the loan portfolio and transactional relationships? - Management indicated that they expect to retain 75% to 80% of the transactional portfolio as it matures or reprices [38] Question: What is the appetite for additional loan sales? - The company is open to surgical opportunities for loan sales but does not expect significant bulk sales from the transactional portfolio [63] Question: How should we think about deposit pricing moving forward? - Management emphasized a market-driven approach to deposit pricing, actively seeking opportunities to adjust rates based on competitive dynamics [67][68]

Financial Data and Key Metrics Changes - The company reported earnings of $0.80 per share in Q4 and $2.77 per share for the full year, marking the strongest net income in its history [6][30] - Total loans grew by 1% quarter-over-quarter and 5% year-over-year, with C&I loans being a primary growth driver [6][7] - Net interest income (NII) reached a record $310 million in Q4, up 15% for the year, with a net interest margin (NIM) of over 3% for the year [8][10] Business Line Data and Key Metrics Changes - C&I loans grew by over $1.2 billion in 2025, with a 2% increase in Q4 alone [4][7] - Core customer deposits increased by nearly $700 million in Q4 and $1 billion for the year, reflecting a 3.5% growth rate year-over-year [8][19] - Non-interest income for Q4 was $79 million, down slightly from Q3 but up from the previous year, driven by growth in wealth management and card fees [24] Market Data and Key Metrics Changes - The company is expanding its presence in major metropolitan markets, including Omaha and the Twin Cities, where it aims to deepen market share [5][13] - The acquisition of American National Corporation is expected to enhance growth prospects in these markets [5][30] Company Strategy and Development Direction - The company completed major investments from its strategic plan in March 2025, positioning it for growth in 2026 and beyond [3][4] - Plans for 2026 include increasing marketing spend by over 100% in key markets to drive household growth [15] - The focus remains on high-quality commercial relationships and maintaining a low-risk profile while expanding [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth momentum and profitability, anticipating continued organic growth in 2026 [6][30] - The economic outlook includes expectations of two Fed rate cuts in 2026, which could impact net interest income positively [22][30] Other Important Information - The company has maintained a disciplined approach to credit, with low charge-offs and improving asset quality [9][29] - Capital ratios increased, with the tangible common equity ratio at 8.29% and the CET1 ratio at 10.49% [26] Q&A Session Summary Question: Non-interest income guidance excluding American National - Management indicated that they do not have updates on financial impacts from the acquisition yet, but they are optimistic about the strategic alignment of the franchises [31][32] Question: Investments in targeted cities for 2026 - Management confirmed that they expect to see a significant increase in marketing expenses in Omaha and Minneapolis, with hires for relationship managers already underway [34][36] Question: Loan and deposit growth expectations from new hires - Management expects that new hires will contribute to loan growth in 2026, with a forecast of $1.2 billion in C&I growth [37] Question: Capital considerations for buybacks - The primary focus remains on organic growth and executing the acquisition, with capital decisions to be made based on future profitability [49] Question: Credit metrics and portfolio concerns - Management reported no significant stress in the portfolio, with positive signs in commercial real estate paydowns [51]

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $21.71 per share for Q4 2025, with a core net income of $23.579 per share after excluding non-core items [11][12] - The core return on average assets (ROAA) was 1.16% in Q4, exceeding the company's stated goal of 1% [8][11] - Earnings per share (EPS) increased by 14% year-over-year, with a 20% improvement in Q4 alone [9] - The tangible common equity ratio increased by 90 basis points, and consolidated CET1 capital rose by 50 basis points year-over-year [6] Business Line Data and Key Metrics Changes - Total loans held for investment increased by $168.4 million, or 11.1% annualized on a linked quarter basis, driven by improved demand [12] - Total deposits rose by $191.7 million, primarily due to a net increase in interest-bearing deposits [13] - The net interest margin increased to 3.71% for Q4, with a core net interest margin of 3.64% [14][15] Market Data and Key Metrics Changes - Texas-based loans slightly declined from 39% of total loans, expected to decrease further to approximately 36% following the acquisition of Progressive Bank [13] - The company experienced significant loan growth in Southwest Louisiana and North Louisiana, with both regions growing over $100 million in loans and deposits each during 2025 [70][71] Company Strategy and Development Direction - The company plans to focus on optimizing existing systems and deepening relationships rather than pursuing new major projects in 2026 [10][46] - The management emphasized the importance of sustainable ROAA, tangible book value accretion, and enhancing EPS as key strategic goals [10][49] - The company is not prioritizing new M&A opportunities at this time, aiming instead to demonstrate the value of past acquisitions [46][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026, expecting it to be even more fruitful than 2025 due to completed major projects [9][10] - The company acknowledged challenges in the credit environment, particularly related to a single commercial real estate relationship that became non-performing [32][36] - Management indicated a focus on maintaining a balanced loan growth outlook, projecting mid-single-digit growth for 2026 [26][27] Other Important Information - The company has been recognized as one of the American Bankers Best Banks to Work for for five consecutive years, highlighting its positive workplace culture [6] - The acquisition of Progressive Bank is expected to enhance the company's footprint and contribute to its growth strategy [23] Q&A Session Summary Question: Insights on loan growth and outlook - Management noted that improved pipeline demand and reduced payoffs contributed to strong loan growth in Q4, with expectations of mid-single-digit growth for 2026 [26][27] Question: Details on non-performing loans - A significant commercial real estate loan in Houston was identified as non-performing, with management indicating it is one of the largest exposures [32][35] Question: Focus on daily execution versus major projects - Management clarified that the focus for 2026 will be on optimizing existing systems and deepening relationships rather than pursuing new acquisitions [46][48] Question: Capital management and buyback strategy - The company plans to continue share buybacks opportunistically, with a focus on attractive pricing [50][52] Question: Opportunities for hiring in the current environment - Management expressed readiness to hire selectively, focusing on attracting the right talent to support growth [56][59]

Financial Data and Key Metrics Changes - In Q4 2025, Capital One earned $2.1 billion, or $3.26 per diluted common share, with full-year earnings of $2.5 billion, or $4.03 per share [5] - Adjusted earnings per share for Q4 were $3.86, and for the full year, it was $19.61 [6] - Revenue increased by approximately 1% compared to the prior quarter, while non-interest expense rose by 13% [6] - Provision for credit losses was $4.1 billion in Q4, an increase of about $1.4 billion from Q3 [6] Business Line Data and Key Metrics Changes - Domestic card segment saw a year-over-year purchase volume growth of 39%, primarily due to the addition of Discover purchase volume [11] - Ending loan balances in the domestic card business increased by 69% year-over-year, largely from Discover card loans [11] - Consumer banking revenue for Q4 was up about 36% year-over-year, driven by Discover operations and growth in auto loans [15] - Commercial banking annualized net charge-off rate increased to 0.43% in Q4, while criticized non-performing loan rate decreased to 1.36% [17] Market Data and Key Metrics Changes - Total liquidity reserves at the end of Q4 were approximately $144 billion, with a liquidity coverage ratio of 173% [9] - The net interest margin for Q4 was 8.26%, a decline of ten basis points from the prior quarter [9] Company Strategy and Development Direction - The company announced a definitive agreement to acquire Brex for $5.15 billion, aiming to enhance its capabilities in the business payments space [5][20] - The acquisition of Brex is expected to accelerate Capital One's journey in business payments and integrate modern technology solutions [20][34] - Capital One continues to focus on building a national retail bank and enhancing its technology infrastructure to support growth opportunities [18][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of the U.S. consumer and overall macroeconomy, despite elevated economic uncertainties [51][56] - The company anticipates that tax refunds will positively impact consumer credit in 2026, although this is expected to be a one-time benefit [54] - Management highlighted the importance of ongoing investments in technology and marketing to drive future growth [46][64] Other Important Information - The company completed the sale of the $8.8 billion Discover Home Loans portfolio, resulting in a net gain of $483 million [5] - The allowance for credit losses increased to $23.4 billion, with a total portfolio coverage ratio of 5.16% [6][7] Q&A Session Summary Question: Strategic value of the Brex acquisition - Management emphasized that acquiring Brex enhances Capital One's position in the business payments market and aligns with its long-term vision [22][24] Question: Impact of proposed credit card rate cap - Management warned that a rate cap could reduce credit availability for consumers and potentially harm the economy [36][38] Question: Consequences of the Credit Card Competition Act - Management believes that the current payments ecosystem is functioning well and government intervention may have unintended negative consequences [39][40] Question: Financial impacts of the Brex deal - Management indicated that they would provide detailed financial metrics post-acquisition, emphasizing that the integration of Brex would not disrupt the ongoing Discover integration [57][58]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $13.7 billion, marking strong growth across all businesses, driven by AI infrastructure build-out, with AI PC, traditional server, and networking revenue all up double digits sequentially and year over year [17] - Non-GAAP gross margin for Q4 was 37.9%, approximately 140 basis points ahead of guidance, while full year Non-GAAP gross margin was 36.7%, up 70 basis points year over year [17][18] - Non-GAAP earnings per share for Q4 was $0.15, exceeding guidance of $0.08, driven by higher revenue and stronger gross margins [17] Business Line Data and Key Metrics Changes - Client Computing Group (CCG) revenue was $8.2 billion, down 4% quarter over quarter, despite AI PC units growing 16% [21] - Data Center and AI (DCAI) revenue was $4.7 billion, up 15% sequentially, marking the fastest sequential growth this decade [23] - Intel Foundry revenue was $4.5 billion, up 6.4% sequentially, with an operating loss of $2.5 billion in Q4 due to the early ramp of Intel 18A [24] Market Data and Key Metrics Changes - The client consumption Total Addressable Market (TAM) was estimated to be greater than 290 million units in 2025, marking two consecutive years of growth [22] - The custom ASIC business grew more than 50% in 2025, reaching an annualized revenue run rate greater than $1 billion in Q4 [23] - The demand for traditional servers remains strong, with a focus on ramping available capacity to support the uptick in demand [10] Company Strategy and Development Direction - The company aims to strengthen its client franchise and advance its data center, AI accelerator, and ASIC strategies to capture growth opportunities presented by AI [6] - A centralized approach for the data center and AI group is being implemented to ensure tight coordination across CPUs, GPUs, and platform strategy [10] - The long-term ambition is to rebuild Intel as a compute platform of choice for the next era of AI-driven computing, focusing on world-class engineering and execution [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the significant growth opportunity AI presents across all businesses, despite acknowledging challenges in meeting demand due to supply constraints [15] - The company is committed to improving yield and efficiency in its manufacturing processes to better support customer needs [16] - Management anticipates a strong year of growth for DCAI in 2026, with improvements in factory network supply expected beginning in Q2 [28] Other Important Information - The company generated $9.7 billion in cash from operations for the full year and ended 2025 with $37.4 billion in cash and short-term investments [19] - The company is planning to retire all $2.5 billion of maturities as they come due this year [30] - The company is focused on building a world-class wafer and advanced packaging foundry, with significant milestones achieved in the development of Intel 18A [13] Q&A Session Summary Question: Short-term supply and yield improvements - Management indicated that improving yields and throughput are key drivers of supply increases, with confidence in a positive trajectory [32] Question: Gross margin expectations - Management explained that gross margin decline in Q1 is due to lower revenue and the impact of new product costs, with expectations for improvement as supply and cost structures stabilize [37] Question: Server prospects and market share - Management emphasized the importance of the 16-channel Diamond Rapids and Coral Rapids in driving market share, with a focus on meeting hyperscaler demand [46] Question: Supply constraints and inventory management - Management acknowledged that both client and data center revenues will be down due to supply constraints, but expects improvements in Q2 [52] Question: External foundry revenue expectations - Management anticipates that significant external foundry revenue will begin to materialize in 2028, with ongoing customer engagements [59]

CSX (NasdaqGS:CSX) Q4 2025 Earnings call January 22, 2026 04:30 PM ET Company ParticipantsStephanie Moore - Senior VP of Equity ResearchKen Hoexter - Managing DirectorMike Cory - EVP and COOMaryclare Kenney - SVP and Chief Commercial OfficerJason Seidl - Managing DirectorMatthew Korn - Head of Investor RelationsSteve Angel - President and CEORavi Shankar - Executive Director and Head of India Equity SalesWalter Spracklin - Director of Canadian Equity Research Managment and Co-Head of Global Industrials Rese ...

Financial Data and Key Metrics Changes - Revenue grew 21% year-over-year to $10.1 billion, with operating margins at 37% reflecting investments in R&D and manufacturing scale [10][19] - Pro forma EPS increased 22%, marking the third consecutive year of growth above 20% [19] - Free cash flow rose to $2.5 billion, up from $1.3 billion in 2024 [19] Business Line Data and Key Metrics Changes - Total procedures grew 19%, with da Vinci procedures increasing approximately 18% and Ion procedures growing 51% [7][18] - In Q4, da Vinci procedures grew 17%, with the installed base increasing by 12% to over 11,100 systems [20] - Ion platform procedures increased 44%, with the installed base up by 24% to just under 1,000 systems [20] Market Data and Key Metrics Changes - In the U.S., da Vinci procedures increased 15% to over 2 million, while international procedures grew by 23% to over 1.1 million [7] - Growth rates were 21% in Europe, 24% in Asia, and 27% in the rest of the world [7] - Total procedures outside the U.S. accounted for roughly 35% of global procedures [7] Company Strategy and Development Direction - The company focuses on four strategic priorities: launching da Vinci 5, increasing adoption of focused procedures, building industrial scale and product quality, and enhancing digital tools [5][16] - The company aims to expand its platforms and digital features while increasing adoption of focused procedures through training and market access efforts [16] Management's Comments on Operating Environment and Future Outlook - Management believes the company is in the early stages of advancing minimally invasive care, with significant long-term opportunities ahead [4] - For 2026, the company anticipates da Vinci procedure growth in the range of 13%-15%, driven by general surgery in the U.S. and international procedures [41][42] - The company expects pro forma gross profit margin to be between 67% and 68% of net revenue in 2026 [42] Other Important Information - The company placed 1,721 da Vinci systems in 2025, including 870 da Vinci 5 systems [8] - The installed base of da Vinci systems increased by 12% to just over 11,100 systems, with average system utilization increasing by 4% [20] - The company received FDA clearance for several cardiac procedures on da Vinci 5, indicating a focus on expanding into new disease states [11][52] Q&A Session Summary Question: FDA approvals for cardiac non-force feedback instruments - Management discussed the foundational aspects of supporting cardiac surgery and the importance of training pathways for minimally invasive approaches [48][50] Question: Incorporating advanced imaging features into the robotic ecosystem - Management explained that advanced imaging capabilities are being developed to improve surgical outcomes and will have associated revenue streams [54][55] Question: Expanding footprint in ASCs - Management highlighted the importance of high-quality clinical outcomes and the economic structure needed for ASCs, with a focus on lower acuity procedures [61][62] Question: Utilization and system ASPs in 2026 - Management indicated that while overall da Vinci utilization grew 4%, they are not ready to predict future utilization rates [66] Question: Gross margin and OpEx assumptions - Management outlined various dynamics affecting gross margin, including higher trade-ins and a mix of da Vinci 5 systems [72] Question: Competition in China - Management acknowledged increased competition in China but expressed confidence in their ability to compete effectively [75][76]

Financial Data and Key Metrics Changes - The company reported a 1% increase in volume but a 1% decrease in revenue due to business mix headwinds and coal pricing [9][14] - Operating income fell by 9% and earnings per share decreased by 7% year-over-year [9][10] - Fourth quarter expenses increased by $73 million, or 3%, excluding goodwill impairment charges [10][11] Business Line Data and Key Metrics Changes - Merchandise volume and revenue both decreased by 2%, with softness in chemicals and forest products [14][16] - Automotive volume was down 5% year-over-year, while fertilizer volume increased by 7% [15][16] - Intermodal revenue grew by 7% year-over-year on a 5% increase in volume, driven by new business wins [16] Market Data and Key Metrics Changes - The industrial chemicals market remains weak, affecting freight spending [14] - The housing market is expected to see a modest decline in starts, impacting commodity markets [18] - Domestic utility coal demand increased due to higher power demand and natural gas prices [16][19] Company Strategy and Development Direction - The company aims for low single-digit revenue growth in 2026, focusing on operational efficiency and cost discipline [21][22] - Capital expenditures are planned to be below $2.4 billion, emphasizing safety, reliability, and growth projects [22] - The company is preparing for potential opportunities arising from industry mergers while maintaining operational excellence [54][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging year with subdued demand and limited growth opportunities [4][20] - There is no expectation of significant macroeconomic improvement in the near term, but the company is focused on internal initiatives to drive profitability [21][22] - Management is optimistic about the potential for growth in 2026, particularly in intermodal and domestic utility coal [19][20] Other Important Information - The company has identified over 100 cost-saving initiatives across various areas, including labor and non-labor spending [11][50] - The leadership team has been renewed to enhance operational effectiveness and drive value [5] Q&A Session All Questions and Answers Question: Inquiry about operating ratio improvement and pricing initiatives - Management indicated that the starting point for 2025's operating ratio excludes goodwill charges and emphasized ongoing pricing initiatives to improve yield in 2026 [28][29] Question: Clarification on guidance for operating margin improvement - Management noted that unique charges from 2025 would not recur in 2026, and they expect productivity improvements to drive margin expansion [32] Question: Discussion on revenue growth profile and mix effects - Management acknowledged that mix effects would impact revenue growth, with stronger growth expected in lower RPU segments [78][79] Question: Inquiry about coal revenue per unit and market conditions - Management clarified that coal RPU would be influenced by market mix and expected stabilization in the coming year [58][61] Question: Discussion on operational readiness for upcoming storms - Management assured that the network is in better condition compared to previous years and outlined preparedness measures for adverse weather [40][42] Question: Inquiry about the impact of industry mergers - Management emphasized the importance of operational excellence regardless of merger outcomes and expressed confidence in managing potential risks [54][55]

Financial Data and Key Metrics Changes - Revenue grew 21% year over year to $10.1 billion, with operating margins at 37% reflecting investments in R&D and manufacturing scale [8][16][29] - Proforma EPS increased 22%, marking the third consecutive year of growth above 20% [16] - Free cash flow rose to $2.5 billion, up from $1.3 billion in 2024 [16] Business Line Data and Key Metrics Changes - Total procedures grew 19%, with da Vinci procedures increasing 17% and Ion procedures growing 51% [5][16] - Single-port procedures grew 87%, while multi-port procedures increased 17% [5][11] - In Q4, da Vinci procedures in the U.S. increased 15% to over 2 million, while international procedures grew 23% [6][19] Market Data and Key Metrics Changes - U.S. procedures increased 16%, with da Vinci procedures growing 15% and Ion procedures growing 41% [17] - Internationally, da Vinci procedures grew 21%, with notable growth in Canada, India, Korea, and various European markets [20][21] - Japan's procedure growth was lower than expected due to capital placement challenges, with potential reimbursement changes anticipated in 2026 [21] Company Strategy and Development Direction - The company focuses on four strategic priorities: launching da Vinci 5, increasing adoption of focused procedures, building industrial scale, and enhancing digital tools [4][13] - Plans to expand into ambulatory surgery centers (ASCs) and enhance training and support for customers [19][56] - Continued investment in market access activities and local evidence generation to meet clinical and economic objectives [6][7] Management's Comments on Operating Environment and Future Outlook - Management believes the company is in the early stages of advancing minimally invasive care, with significant growth opportunities ahead [4][78] - Anticipated da Vinci procedure growth for 2026 is projected between 13%-15%, driven by general surgery and international procedures [36] - Expected gross profit margin for 2026 is projected to be between 67% and 68% of net revenue, with various factors impacting this guidance [37] Other Important Information - The company placed 1,721 da Vinci systems in 2025, including 870 da Vinci 5 systems [7][23] - The installed base of da Vinci systems increased by 12% to over 11,100 systems, with average system utilization rising by 4% [17][26] - The company plans to introduce additional products and features for da Vinci 5 in 2026 [10] Q&A Session Summary Question: FDA approvals for cardiac non-force feedback instruments - Management discussed the importance of supporting cardiac surgery and the foundational work being done, including training pathways and developing cardiac-specific instrumentation [41][42][44] Question: Advanced imaging features in the robotic ecosystem - Management explained that advanced imaging capabilities are being developed, which will add revenue streams and improve surgical outcomes [48][49] Question: ASC opportunity and key procedures - Management highlighted the growing ASC opportunity, focusing on high-quality clinical outcomes and the need for repeatable procedures [53][55] Question: Gross margin and operating expenses assumptions - Management provided insights into the dynamics affecting gross margin, including higher trade-ins and the mix of da Vinci 5 systems [64][66] Question: Competition in China - Management acknowledged increased competition in China but expressed confidence in their ability to compete effectively with local robotic companies [68][70]