INTUITIVE SURGICAL INC

Previous wording

Management’s discussion and analysis of financial condition as of March 31, 2025, and results of operations for the three months ended March 31, 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.

Current wording

Management’s discussion and analysis of financial condition as of June 30, 2025, and results of operations for the three and six months ended June 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.

Previous wording

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, and projections 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 …

Excerpt shortened here; the source contains the full paragraph.

Current wording

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, and projections 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. (“Fosun Pharma”); our completion of and ability to successfully integrate acquisitions; intellectual property positions and litigation; risks ass…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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 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.

Current wording

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.

Previous wording

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. 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 March 31, 2025, we have an installed base of 509 da Vinci 5 surgical systems. Additionally, we are in the regulatory processes in Japan and Europe for our da Vinci 5 surgical system.

Current wording

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. 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 June 30, 2025, we have an installed base of 689 da Vinci 5 surgical systems.

Previous wording

We are in the early stages of launching our da Vinci SP surgical system and have an installed base of 291 da Vinci SP surgical systems as of March 31, 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 outside of the U.S. (“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.

Current wording

We are in the early stages of launching our da Vinci SP surgical system and have an installed base of 314 da Vinci SP surgical systems as of June 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 outside of the U.S. (“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.

Previous wording

On February 1, 2025, the U.S. imposed 25% tariffs on imports from Mexico and Canada, with several subsequent changes related to exemptions and effective dates, including an exemption for any goods that are within the scope of the United States-Mexico-Canada Agreement (“USMCA”). We currently manufacture a significant majority of our instruments and accessories in Mexicali, Mexico, most of which are certified under the requirements of USMCA and, therefore, have not been subject to the recently imposed tariffs. As a result, the impact of tariffs on us was not material in the first quarter of 2025.

Current wording

On February 1, 2025, the U.S. imposed 25% tariffs on imports from Mexico and Canada, with several subsequent changes related to exemptions and effective dates, including an exemption for any goods that are within the scope of the United States-Mexico-Canada Agreement (“USMCA”). We currently manufacture a significant majority of our instruments and accessories in Mexicali, Mexico, most of which qualify as originating under the USMCA and, therefore, have not been subject to the recently imposed tariffs.

Previous wording

On April 2, 2025, the U.S. imposed a 10% universal tariff on all imports that are not subject to the USMCA. The U.S. announced additional tariffs that vary by country, which are currently paused for 90 days. We import some raw materials and finished goods from outside of the U.S., which are subject to these tariffs, including our endoscopes, a majority of which are manufactured in Germany. We anticipate that some of our suppliers will incur incremental tariffs and may pass on those additional costs to us.

Current wording

On April 2, 2025, the U.S. imposed a 10% universal tariff on nearly all imports that are not subject to the USMCA. The U.S. announced additional tariffs that vary by country. Such tariffs were suspended for 90 days and, on July 7, 2025, this suspension was extended to August 1, 2025. The current administration signaled that it intended to announce tariff rates for imports from most countries, which would take effect on August 1, 2025, even as negotiations with some countries continue. We import certain raw materials and finished goods from outside of the U.S., which are subject to these tariffs, including our endoscopes, a majority of which are manufactured in Germany. We anticipate that some of our suppliers will incur incremental tariffs and may pass on those additional costs to us.

Previous wording

On April 7, 2025, the U.S. imposed a tariff on all imports from China, currently up to 145%. Our operations involve importing certain raw materials and finished goods from China, which are subject to the U.S. tariff. Concurrently, China has imposed a 125% tariff on all imports from the U.S. We import sub-assemblies to support our local da Vinci Xi surgical system manufacturing. Additionally, we sell U.S.-manufactured da Vinci Xi surgical systems into China. Both imports are subject to the Chinese tariff. We expect these tariffs to have a significant impact on the product cost of our da Vinci Xi surgical system in China, potentially hindering our competitiveness in securing future tenders in the region.

Current wording

Our operations involve importing certain raw materials from China, which are subject to the U.S. tariff. We also import sub-assemblies to support our local da Vinci Xi surgical system manufacturing in China, and we sell U.S.-manufactured da Vinci Xi surgical systems into China. Both imports are subject to the Chinese tariffs. We expect these tariffs to have an adverse impact on the product cost of our da Vinci Xi surgical system in China.

Previous wording

Based on these recently announced and implemented global tariffs, and assuming such tariffs remain in place, we anticipate a significant increase in our cost of revenues for the second half of 2025, which will impact our results of operation. 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 and trade barriers that are implemented.

Current wording

Based on the announced and implemented global tariffs as of the date of this report, and assuming such tariffs remain in place, we anticipate a significant increase in our cost of revenues for the second half of 2025, which will impact our results of operations. 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.

Previous wording

During the first quarter of 2025, we continued to experience isolated stresses to supply, particularly for specific component materials 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 first quarter of 2025. As a result of the escalation in tariffs, import restrictions, and retaliatory 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.

Current wording

During the second quarter of 2025, we continued to experience isolated stresses to supply, particularly for specific component materials impacted by new export 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 second quarter of 2025. As a result of the escalation in tariffs, new country-specific trade requirements, and retaliatory 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.

Previous wording

Elevated interest rates have made access to credit more difficult, and the ability of certain suppliers to fund investments in capacity and infrastructure as well as 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.

Current wording

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.

Previous wording

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, 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.

Current wording

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.

Previous wording

More than half of the da Vinci procedures performed are 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.

Current wording

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.

Previous wording

We provide our products 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 Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”)), Japan, South Korea, India, Taiwan, and Canada. In the remainder of our OUS markets, we provide our products through distributors.

Current wording

We provide our products 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 remainder of our OUS markets, we provide our products through distributors.

Previous wording

We have generally obtained the regulatory clearances, approvals, and certifications required to market our products associated with our da Vinci multi-port surgical systems (da Vinci S, da Vinci Si, da Vinci Xi, and da Vinci X systems) for our targeted surgical specialties within the U.S., South Korea, Japan, and the European markets in which we operate. We have additionally obtained regulatory clearances, approvals, and certifications for the following products over the past several years:

Current wording

We have generally obtained the regulatory clearances, approvals, and certifications required to market our products associated with our fourth-generation and earlier da Vinci multi-port surgical systems (da Vinci S, da Vinci Si, da Vinci Xi, and da Vinci X systems) for our targeted surgical specialties within the U.S., South Korea, Japan, and the European markets in which we operate. We have additionally obtained regulatory clearances, approvals, and certifications for the following products over the past several years:

Previous wording

•In October 2024, we obtained regulatory clearance in South Korea for our da Vinci 5 surgical system, our next-generation multi-port robotic 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. 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.

Current wording

•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. 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.

Previous wording

•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.

Current wording

•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.

Previous wording

•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.

Current wording

•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.

Previous wording

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 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 March 31, 2025, including systems that were sold in prior quarters, we have placed 134 da Vinci surgical systems under the 2023 Quota. 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.

Current wording

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 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 June 30, 2025, including systems that were sold in prior quarters, we have placed 144 da Vinci surgical systems under the 2023 Quota. 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.

Previous wording

Overall. Total da Vinci procedures performed by our customers grew approximately 17% for the three months ended March 31, 2025, compared to approximately 16% for the three months ended March 31, 2024. The first quarter 2025 procedure growth was largely attributable to growth in U.S. general surgery, OUS general surgery (particularly cancer), OUS urology, and OUS gynecology procedures.

Current wording

Overall. Total da Vinci procedures performed by our customers grew approximately 17% for the three months ended June 30, 2025, compared to approximately 17% for the three months ended June 30, 2024. Total da Vinci procedures performed by our customers grew approximately 17% for the six months ended June 30, 2025, compared to approximately 16% for the six months ended June 30, 2024. The second quarter 2025 procedure growth was largely attributable to growth in U.S. general surgery, OUS general surgery (particularly cancer), and OUS urology procedures.

Previous wording

U.S. Procedures. U.S. da Vinci procedures grew approximately 13% for the three months ended March 31, 2025, compared to approximately 14% for the three months ended March 31, 2024. The first quarter 2025 U.S. procedure growth was largely attributable to strong growth in general surgery procedures, most notably cholecystectomy and hernia repair procedures. The number of U.S. da Vinci bariatric procedures performed continued to decline in the mid-single digits in the first quarter of 2025 compared to the first quarter of 2024.

Current wording

U.S. Procedures. U.S. da Vinci procedures grew approximately 14% for the three months ended June 30, 2025, compared to approximately 14% for the three months ended June 30, 2024. U.S. da Vinci procedures grew approximately 14% for the six months ended June 30, 2025, compared to approximately 14% for the six months ended June 30, 2024. The second 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 second quarter of 2025 compared to the second quarter of 2024.

Previous wording

OUS Procedures. OUS da Vinci procedures grew approximately 24% for the three months ended March 31, 2025, compared to approximately 20% for the three months ended March 31, 2024. The first quarter 2025 OUS procedure growth was 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. The first quarter 2025 OUS procedure growth rate reflects continued da Vinci adoption in European and Asian markets. We saw strong procedure growth in the UK, India, and South Korea during the first 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 continued; however, we saw a recovery in the number of procedures performed in the first quarter of 2025, and the growth rate in South Korea modestly exceeded the overall OUS procedure growth rate. The sustainability of this recovery and the extent of the continued impact of these strikes on procedures in South Korea remains uncertain.

Current wording

OUS Procedures. OUS da Vinci procedures grew approximately 23% for the three months ended June 30, 2025, compared to approximately 22% for the three months ended June 30, 2024. OUS da Vinci procedures grew approximately 24% for the six months ended June 30, 2025, compared to approximately 21% for the six months ended June 30, 2024. The second 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 second quarter 2025 OUS procedure growth rate reflects continued da Vinci adoption in Asian and European markets. We saw strong procedure growth in India and South Korea during the second 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 continued; however, we saw a recovery in the number of procedures performed in the first half of 2025, and the growth rate in South Korea exceeded the overall OUS procedure growth rate. The sustainability of this recovery and the extent of the continued impact of these strikes on procedures in South Korea remain uncertain, in part due to the unknown impact of any patient backlog.

Previous wording

Overall. Total Ion procedures performed by our customers grew approximately 58% for the three months ended March 31, 2025, compared to approximately 90% for the three months ended March 31, 2024. The first quarter 2025 procedure growth was largely attributable to a larger installed base of Ion systems and the conversion of other lung biopsy modalities.

Current wording

Overall. Total Ion procedures performed by our customers grew approximately 52% for the three months ended June 30, 2025, compared to approximately 82% for the three months ended June 30, 2024. Total Ion procedures performed by our customers grew approximately 55% for the six months ended June 30, 2025, compared to approximately 86% for the six months ended June 30, 2024. The second quarter 2025 procedure growth was largely attributable to a larger installed base of Ion systems and the conversion of other lung biopsy modalities.

Previous wording

We placed 367 da Vinci surgical systems in the first quarter of 2025, compared to 313 systems in the first 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 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 first quarter of 2025, we placed 147 da Vinci 5 systems, compared to 8 systems in the first quarter of 2024.

Current wording

We placed 395 da Vinci surgical systems in the second quarter of 2025, compared to 341 systems in the second 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 second quarter of 2025, we placed 180 da Vinci 5 systems, compared to 70 systems in the second quarter of 2024.

Previous wording

We continue to see some customers challenged by staffing shortages, decreased government funding in healthcare (particularly in Europe), and other financial pressures. As a result, we expect our 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.

Current wording

We continue to see some customers challenged by staffing shortages, decreased government funding in healthcare (particularly in Europe and Japan), and other financial pressures. As a result, we expect our 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.

Previous wording

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; inflationary pressures; high interest rates; hospital staffing shortages; procedure growth rates; evolving system utilization and point-of-care dynamics; capital replacement trends, including a declining number of older generation systems available for trade-in transactions; 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.

Current wording

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, including a declining number of older generation systems available for trade-in transactions; 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.

Previous wording

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; Shandong Weigao Group Medical Polymer Company Ltd.; Shanghai Microport Medbot (Group) Co., Ltd.; Shenzhen Edge Medical Co., Ltd.; and SS Innovations International, Inc.

Current wording

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.

Previous wording

First Quarter 2025 Operational and Financial Highlights

Current wording

Second Quarter 2025 Operational and Financial Highlights

Previous wording

•Approximately 732,000 da Vinci procedures were performed during the three months ended March 31, 2025, an increase of 17% compared to approximately 627,000 da Vinci procedures for the three months ended March 31, 2024.

Current wording

•Approximately 775,000 da Vinci procedures were performed during the three months ended June 30, 2025, an increase of 17% compared to approximately 661,000 da Vinci procedures for the three months ended June 30, 2024.

Previous wording

•Approximately 30,700 Ion procedures were performed during the three months ended March 31, 2025, an increase of 58% compared to approximately 19,500 Ion procedures for the three months ended March 31, 2024.

Current wording

•Approximately 35,300 Ion procedures were performed during the three months ended June 30, 2025, an increase of 52% compared to approximately 23,200 Ion procedures for the three months ended June 30, 2024.

Previous wording

•During the three months ended March 31, 2025, we placed 367 da Vinci surgical systems compared to 313 systems during the three months ended March 31, 2024. The first quarter 2025 da Vinci surgical system placements included 147 da Vinci 5 systems compared to 8 systems during the three months ended March 31, 2024.

Current wording

•During the three months ended June 30, 2025, we placed 395 da Vinci surgical systems compared to 341 systems during the three months ended June 30, 2024. The second quarter 2025 da Vinci surgical system placements included 180 da Vinci 5 systems compared to 70 systems during the three months ended June 30, 2024.

Previous wording

•As of March 31, 2025, we had a da Vinci surgical system installed base of approximately 10,189 systems, an increase of 15% compared to an installed base of approximately 8,887 systems as of March 31, 2024.

Current wording

•As of June 30, 2025, we had a da Vinci surgical system installed base of approximately 10,488 systems, an increase of 14% compared to an installed base of approximately 9,203 systems as of June 30, 2024.

Previous wording

•Utilization of da Vinci surgical systems, measured in terms of procedures per system per year, increased 2% relative to the first quarter of 2024.

Current wording

•Utilization of da Vinci surgical systems, measured in terms of procedures per system per year, increased 2% relative to the second quarter of 2024.

Previous wording

•Gross profit as a percentage of revenue was 64.7% for the three months ended March 31, 2025, compared to 65.9% for the three months ended March 31, 2024.

Current wording

•Gross profit as a percentage of revenue was 66.3% for the three months ended June 30, 2025, compared to 68.3% for the three months ended June 30, 2024.

Previous wording

•Operating income increased by 23% to $578 million for the three months ended March 31, 2025, compared to $469 million during the three months ended March 31, 2024. Operating income included $190 million and $156 million of share-based compensation expense related to employee stock plans and $8.5 million and $5.1 million of intangible asset-related charges for the three months ended March 31, 2025, and 2024, respectively.

Current wording

•Operating income increased by 31% to $743 million for the three months ended June 30, 2025, compared to $567 million during the three months ended June 30, 2024. Operating income included $200 million and $176 million of share-based compensation expense related to employee stock plans and $4.8 million and $5.2 million of intangible asset-related charges for the three months ended June 30, 2025, and 2024, respectively.

Previous wording

•As of March 31, 2025, we had $9.10 billion in cash, cash equivalents, and investments. Cash, cash equivalents, and investments increased by $0.27 billion, compared to $8.83 billion as of December 31, 2024, primarily as a result of cash provided by operating activities and proceeds from stock option exercises and employee stock purchases, partially offset by cash used for taxes paid related to net share settlements of equity awards and capital expenditures.

Current wording

•As of June 30, 2025, we had $9.53 billion in cash, cash equivalents, and investments. Cash, cash equivalents, and investments increased by $0.70 billion, compared to $8.83 billion as of December 31, 2024, primarily as a result of cash provided by operating activities and proceeds from stock option exercises and employee stock purchases, partially offset by cash used for taxes paid related to net share settlements of equity awards, capital expenditures, and repurchases of common stock.

Previous wording

Total revenue increased by 19% to $2.25 billion for the three months ended March 31, 2025, compared to $1.89 billion for the three months ended March 31, 2024, resulting from 18% higher instruments and accessories revenue, 25% higher systems revenue, and 16% higher service revenue.

Current wording

Total revenue increased by 21% to $2.44 billion for the three months ended June 30, 2025, compared to $2.01 billion for the three months ended June 30, 2024, resulting from 18% higher instruments and accessories revenue, 28% higher systems revenue, and 23% higher service revenue.

Previous wording

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 25% and 26% for the three months ended March 31, 2025, and March 31, 2024, respectively. Fluctuations in foreign currency exchange rates had an unfavorable impact on OUS total revenue of $8 million and $11 million for the three months ended March 31, 2025, and 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.

Current wording

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 26% for both the three and six months ended June 30, 2025, and 25% for both the three and six months ended June 30, 2024, respectively. Fluctuations in foreign currency exchange rates had a favorable impact on OUS total revenue of $14 million and $6 million for the three and six months ended June 30, 2025, respectively. Fluctuations in foreign currency exchange rates had an unfavorable impact on OUS total revenue of $16 million and $27 million for the three and six months ended June 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.

Previous wording

Revenue generated in the U.S. accounted for 68% and 66% of total revenue in the three months ended March 31, 2025, and March 31, 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 proportion 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.

Current wording

Revenue generated in the U.S. accounted for 67%of total revenue for both the three and six months ended June 30, 2025, respectively, and 66% of total revenue for both the three and six months ended June 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 proportion 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.

Previous wording

Instruments and accessories revenue increased by 18% to $1.37 billion for the three months ended March 31, 2025, compared to $1.16 billion for the three months ended March 31, 2024. The increase in instruments and accessories revenue was primarily driven by approximately 17% higher da Vinci procedure volume and approximately 58% higher Ion procedure volume. The first quarter 2025 U.S. da Vinci procedure growth was approximately 13%, driven primarily by strong growth in general surgery procedures, most notably cholecystectomy and hernia repair procedures. The number of U.S. da Vinci bariatric procedures performed continued to decline in the mid-single digits in the first quarter of 2025 compared to the first quarter of 2024. The first 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 first quarter 2025 OUS da Vinci procedure growth was driven by several markets with particular strength in the UK, India, and South Korea.

Current wording

Instruments and accessories revenue increased by 18% to $1.47 billion for the three months ended June 30, 2025, compared to $1.24 billion for the three months ended June 30, 2024. The increase in instruments and accessories revenue was primarily driven by approximately 17% higher da Vinci procedure volume, approximately 52% higher Ion procedure volume, and customer buying patterns. The second quarter 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 performed declined in the high-single digits in the second quarter of 2025 compared to the second quarter of 2024. The second quarter 2025 OUS da Vinci procedure growth was approximately 23%, 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 second quarter 2025 OUS da Vinci procedure growth was driven by several markets with particular strength in India and South Korea.