INTUITIVE SURGICAL INC

Previous wording

The following management’s discussion and analysis is provided in addition to the accompanying Condensed Consolidated Financial Statements and Notes thereto. Management’s discussion and analysis of financial condition as of March 31, 2026, and results of operations for the three months ended March 31, 2026, 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, 2025.

Current wording

The following management’s discussion and analysis is provided in addition to the accompanying Condensed Consolidated Financial Statements and Notes thereto. Management’s discussion and analysis of financial condition as of June 30, 2026, and results of operations for the three and six months ended June 30, 2026, 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, 2025.

Previous wording

We refer to the years ended December 31, 2026, 2025, and 2024 as “2026,” “2025,” and “2024,” respectively.

Current wording

We refer to the years ending December 31, 2026, 2025, and 2024 as “2026,” “2025,” and “2024,” respectively.

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,” “commit,” “would,” “seek,” “potential,” “targeted,” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to the following: statements related to future results of operations; future financial condition; the goals we share with our customers, including improving patient outcomes; our financing plans and future capital requirements; our potential tax assets or liabilities, and statements based on current expectations, estimates, forecasts, projections, and assumptions about the economies and geographic markets in which we operate; and our beliefs and assumptions regarding these economies and markets. These forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements should be considered in light of various important factors, including, but not limited to, the following: the overall macroeconomic environment, which may impact customer spending and our costs, including tariffs, the levels of inflation, and interest rates; the conflict in Ukraine; conflicts in the Middle East, including Israel and Iran; disruption to our supply chain, including increased 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 United States (“U.S.”) 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 Fosu…

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,” “commit,” “would,” “seek,” “potential,” “targeted,” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to the following: statements related to future results of operations; future financial condition; the goals we share with our customers, including improving patient outcomes; our financing plans and future capital requirements; our potential tax assets or liabilities; statements based on current expectations, estimates, forecasts, projections, and assumptions about the economies and geographic markets in which we operate; our beliefs and assumptions regarding these economies and markets; expectations regarding future procedure volumes and adoption rates; anticipated future depreciation, amortization, and research and development expenses; expectations regarding future system placements, including the factors that may impact such placements; statements regarding competition and competitive dynamics; expectations regarding the timing and receipt of regulatory clearances, approvals, and certifications; expectations regarding the integration of acquisitions, including the transition to a direct sales model in certain markets; statements regarding the expansion of our product offerings and commercialization of new products; expectations regarding future lease buyout activity; and expectations regarding our liquidity and capital expenditures. 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 in Ukraine; conflicts in the Middle East, including Israel and Iran; disruption to our supply chain, including increased 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 United States (“U.S.”) Food and Drug Administration (“FDA”), comparable regulatory authorities, or notifie…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Da Vinci surgical systems enable surgeons to extend the benefits of MIS to many patients who would otherwise undergo a more invasive surgery. Our da Vinci surgical systems are designed to address certain limitations of traditional open surgical or conventional MIS approaches through enhances in visualization, precision, and ergonomics. Our da Vinci products fall into five broad categories: da Vinci surgical systems, da Vinci instruments and accessories, da Vinci stapling, da Vinci energy, and da Vinci vision. We provide a comprehensive suite of systems, learning, and services offerings that are digitally enabled and aim to reduce variability by providing dependable, consistent functionality and an integrated user experience. We have a global network of field service engineers and distributors through which we deliver a suite of services, including installation, repair, maintenance, around-the-clock technical support, and system monitoring. We also offer customized analytics and consultation to hospitals for program optimization.

Current wording

Da Vinci surgical systems enable surgeons to extend the benefits of MIS to many patients who would otherwise undergo a more invasive surgery. Our da Vinci surgical systems are designed to address certain limitations of traditional open surgical or conventional MIS approaches through enhancements in visualization, precision, and ergonomics. Our da Vinci products fall into five broad categories: da Vinci surgical systems, da Vinci instruments and accessories, da Vinci stapling, da Vinci energy, and da Vinci vision. We provide a comprehensive suite of systems, learning, and services offerings that are digitally enabled and aim to reduce variability by providing dependable, consistent functionality and an integrated user experience. We have a global network of field service engineers and distributors through which we deliver a suite of services, including installation, repair, maintenance, around-the-clock technical support, and system monitoring. We also offer customized analytics and consultation to hospitals for program optimization.

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. In June 2025, we obtained regulatory clearance in Japan for the da Vinci 5 surgical system for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac indications. In July 2025, we obtained European certification in accordance with the EU MDR for the da Vinci 5 surgical system for adult and pediatric use in minimally invasive endoscopic procedures across abdominopelvic and thoracoscopic surgical procedures, including urologic, gynecologic, and general laparoscopic procedures, excluding the use of force feedback. We intend to seek European certification for the use of force feedback in the future. In select geographic markets outside of the U.S. (“OUS”) where we have obtained regulatory clearance, we have launched our da Vinci 5 surgical system. As of March 31, 2026, we have an installed base of 1,464 da Vinci 5 surgical systems, of which 105 systems are located in geographic markets outside of the U.S.

Current wording

In March 2024, we obtained FDA clearance for our da Vinci 5 surgical system, our next-generation multi-port system, for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac and pediatric indications as well as one contraindication related to the use of force feedback in hysterectomy and myomectomy surgical procedures. In 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 Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices

Previous wording

Additionally, we extended our fourth-generation platform by adding the da Vinci SP surgical system, commercialized in 2018. The da Vinci SP surgical system accesses the body through a single incision, while the other da Vinci surgical systems access the body through multiple incisions. We are in the early stages of launching our da Vinci SP surgical system, and we have an installed base of 410 da Vinci SP surgical systems as of March 31, 2026. 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 broadening the commercialization of the da Vinci SP surgical system in additional countries and surgical specialties. In August 2024, we obtained regulatory clearance in Taiwan for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, transanal total mesorectal excision, and breast surgical procedures. We plan to seek FDA clearances for additional indications for the da Vinci SP surgical system and expand the system’s regulatory approvals (including for additional indications) in other OUS geographic 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

Additionally, we extended our fourth-generation platform by adding the da Vinci SP surgical system, commercialized in 2018. The da Vinci SP surgical system accesses the body through a single incision, while the other da Vinci surgical systems access the body through multiple incisions. We are in the early stages of launching our da Vinci SP surgical system, and we have an installed base of 445 da Vinci SP surgical systems as of June 30, 2026. 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 the EU MDR for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, and breast surgical procedures, and we are broadening the commercialization of the da Vinci SP surgical system in additional countries and surgical specialties. In August 2024, we obtained regulatory clearance in Taiwan for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, transanal total mesorectal excision, and breast surgical procedures. We plan to seek FDA clearances for additional indications for the da Vinci SP surgical system and expand the system’s regulatory approvals (including for additional indications) in other OUS geographic 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

Beginning in 2025, the U.S. implemented a baseline tariff framework on most imports with higher country- and product-specific rates for certain trading partners, including Mexico, Germany, and China, among others, alongside reciprocal measures announced by other jurisdictions. In February 2026, the U.S. Supreme Court ruled that these tariffs levied under the International Emergency Economic Powers Act (“IEEPA”) are unconstitutional. As a result of this ruling, the U.S. Court of International Trade issued an order directing the U.S. Customs and Border Protection (“CBP”) agency to begin formalizing a process for refunds. On April 20, 2026, the CBP launched an online portal that can be used to submit IEEPA tariff refund requests. All requests will be reviewed by the CBP to determine validity prior to the issuance of refunds. In response to the Supreme Court’s ruling, a new 10% tariff for all imports under Section 122 of the Trade Act of 1974 was imposed. These tariffs took effect on February 24, 2026, and will remain in effect for 150 days, the maximum period that Section 122 permits without congressional action. However, previous exclusions, such as for the United States-Mexico-Canada Agreement (“USMCA”), remain in place.

Current wording

Beginning in 2025, the U.S. implemented a baseline tariff framework on most imports with higher country- and product-specific rates for certain trading partners, including Mexico, Germany, and China, among others, in some cases giving rise to retaliatory tariffs announced by other jurisdictions. In February 2026, the U.S. Supreme Court ruled that these tariffs levied under the International Emergency Economic Powers Act (“IEEPA”) were unlawful, because IEEPA does not authorize the

Previous wording

U.S. tariffs have also given rise to trade measures by other countries, including additional restrictions on certain exports. These trade measures could impact the reliability and efficiency of our supply chain if they are imposed on materials important to our production operations. In particular, restrictions on the export of rare earth elements, including magnets, and critical minerals from China could potentially restrict access to components used in many of our products and could have a material adverse effect on our business, financial condition, or results of operations.

Current wording

U.S. tariffs have also given rise to retaliatory trade measures by other countries, including additional restrictions on certain exports. These trade measures could impact the reliability and efficiency of our supply chain if they are imposed on materials important to our production operations. In particular, restrictions on the export of rare earth elements, including magnets, and critical minerals from China could potentially restrict access to components used in many of our products and could have a material adverse effect on our business, financial condition, or results of operations.

Previous wording

During the three months ended March 31, 2026, tariffs and other trade measures recognized in total cost of revenue were approximately $28 million. 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.

Current wording

During the three and six months ended June 30, 2026, tariffs and other trade measures recognized in total cost of revenue were $20.8 million and $48.8 million, respectively. During the three months ended June 30, 2026, the Company recognized $35.9 million of refunds related to IEEPA tariffs paid in prior periods, which reduced total cost of revenue. 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

Our future results of operations and liquidity could be materially adversely affected by uncertainties surrounding macroeconomic and geopolitical factors both in the U.S. and globally. These uncertainties include any introduction or modification of tariffs or trade barriers as well as supply chain constraints resulting from inflationary pressures, elevated interest rates, and disruptions in the commodity markets associated with conflicts, including those between Russia and Ukraine and conflicts in the Middle East, including those with Iran.

Current wording

Our future results of operations and liquidity could be materially adversely affected by uncertainties surrounding macroeconomic and geopolitical factors both in the U.S. and globally. These uncertainties include any introduction or modification of tariffs or trade barriers as well as supply chain constraints resulting from inflationary pressures, market pressures, elevated interest rates, and disruptions in the commodity markets associated with conflicts, including those between Russia and Ukraine and conflicts in the Middle East, including those with Iran.

Previous wording

Existing tariffs and country‑specific trade requirements, including export licensing controls between major economies, may contribute to future cost inflation in certain raw materials and/or may result in supply constraints due to shipment delays or limited availability of alternative sources for critical materials used in the manufacture of our products. Elevated interest rates may also impact the ability of certain suppliers to fund necessary investments in capacity and infrastructure. Any financial distress or insolvency of suppliers, including sole- and single-sourced suppliers, could present heightened supply continuity risks.

Current wording

Existing tariffs and country‑specific trade requirements, including export licensing controls between major economies, may contribute to future cost inflation in certain raw materials and/or may result in supply constraints due to shipment delays or limited availability of alternative sources for critical materials used in the manufacture of our products. Additionally, multi-year lead times in certain commodity markets are creating price volatility and availability risks with certain raw materials and finished components. Elevated interest rates may also impact the ability of certain suppliers to fund necessary investments in capacity and infrastructure. Deteriorating financial health or insolvency of suppliers, including sole- and single-sourced suppliers, could present heightened supply continuity risks.

Previous wording

In addition, while the conflict in the Middle East has not resulted in any material disruption to the supply of component materials that we source directly or the delivery of our products to customers, we continue to monitor supplier operations, commodity markets, and transportation-related factors, including shipping lanes. These factors could adversely affect the availability and cost of raw materials sourced by our direct suppliers, as well as the cost and timing of transporting our products to customers.

Current wording

In addition, while the conflict in the Middle East has not resulted in any material disruption to the supply of component materials that we source directly or the delivery of our products to customers, we continue to monitor supplier operations, commodity markets, and transportation-related factors, including shipping lanes. These geopolitical factors, including increased defense industry consumption, could adversely affect the availability and cost of raw materials sourced by our direct suppliers, as well as the cost and timing of transporting our products to customers.

Previous wording

We are also experiencing increasing lead times and cost pressures for certain semiconductor materials, including memory, driven by accelerated demand associated with data processing and storage applications. While these dynamics have not had a material impact on our business to date, they may result in material cost pressures and supply constraints in future periods.

Current wording

We continue to experience extended delivery lead times and price volatility for certain semiconductor materials, including memory, driven by accelerated demand associated with data processing and storage applications. We are actively managing these pressures through ongoing supplier engagement and other mitigation efforts and continue to monitor developments closely. While these dynamics have not had a material impact on our business to date, they may result in material cost pressures and supply constraints in future periods.

Previous wording

Our products must meet the requirements of a large and growing body of international regulations and standards that govern the product safety, efficacy, advertising, labeling, safety reporting design, manufacture, materials content and sourcing, testing, certification, packaging, installation, use, and disposal of our products. Examples of such standards include electrical safety standards, such as those of the International Electrotechnical Commission, and composition standards, such as the Reduction of Hazardous Substances and the Waste Electrical and Electronic Equipment Directives in the European Union (“EU”). Failure to meet these standards could limit our ability to market our products in those regions that require compliance with such standards.

Current wording

Our products must meet the requirements of a large and growing body of international regulations and standards that govern the product safety, efficacy, advertising, labeling, safety reporting design, manufacture, materials content and sourcing, testing, certification, packaging, installation, use, and disposal of our products. Examples of such standards include electrical safety standards, such as those of the International Electrotechnical Commission, and composition standards, such as the Restriction of Hazardous Substances and the Waste Electrical and Electronic Equipment Directives in the European Union (“EU”). Failure to meet these standards could limit our ability to market our products in those regions that require compliance with such standards.

Previous wording

We have generally obtained the regulatory clearances, approvals, and certifications required to market our products for our targeted surgical specialties within the U.S., South Korea, Japan, and the European markets in which we operate. We have 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 for our targeted surgical specialties within the major geographic 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 December 2024, we obtained European certification in accordance with the EU MDR for our E-200 generator. The E-200 generator can be used in da Vinci robotic procedures, as well as non-robotic open and laparoscopic procedures, to deliver high-frequency energy for cutting, coagulation, and vessel sealing of tissues. The E-200 generator includes the same advanced energy capability as the E-100 generator and supports the same vessel sealing instruments.

Current wording

•In April 2026, we obtained NMPA regulatory approval for our E-200 generator in China. In December 2024, we obtained European certification in accordance with the EU MDR for the same generator. The E-200 generator can be used in da Vinci robotic procedures, as well as non-robotic open and laparoscopic procedures, to deliver high-frequency energy for cutting, coagulation, and vessel sealing of tissues.

Previous wording

•In July 2025, we obtained European certification in accordance with the EU MDR for our da Vinci 5 surgical system for adult and pediatric use in minimally invasive endoscopic procedures across abdominopelvic and thoracoscopic surgical procedures, including urologic, gynecologic, and general laparoscopic procedures, excluding the use of force feedback. We intend to seek European certification for the use of force feedback in the future. In 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.

Current wording

•In July 2025, we obtained European certification in accordance with the EU MDR for our 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 are currently seeking 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.

Previous wording

•In March 2024, we received NMPA regulatory clearance for our Ion endoluminal system in China. We placed our first Ion systems in China during the third quarter of 2024 and will continue our rollout of the Ion system in China in a measured fashion.

Current wording

•In March 2024, we obtained NMPA regulatory approval for our Ion endoluminal system in China. We placed our first Ion systems in China during the third quarter of 2024 and will continue our rollout of the Ion system in China in a measured fashion.

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 original 2023 Quota, the government will allow for the sale of 559 new surgical robots into China, which could include da Vinci surgical systems as well as surgical systems introduced by others. As of March 31, 2026, including systems that were sold in prior quarters, we have placed 166 da Vinci surgical systems under the original 2023 Quota and 5 da Vinci surgical systems under special approval. 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 original 2023 Quota, the government will allow for the sale of 559 new surgical robots into China, which could include da Vinci surgical systems as well as surgical systems introduced by others. As of June 30, 2026, including systems that were sold in prior quarters, we have placed 169 da Vinci surgical systems under the original 2023 Quota and 3 da Vinci surgical systems under special approval. 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

Since 2022, several provinces in China have implemented significant limits on what hospitals can charge patients for surgeries using robotic surgical technology, including soft tissue surgery. These limits have impacted the number of procedures performed in those provinces as well as pricing of our instruments and accessories, which have impacted our instruments and accessories revenue. However, as of the date of this report, these limits have not had a material impact on our business, financial condition, or results of operations, as only a small portion of our installed base in China is currently located in the impacted provinces. Companies providing robotic surgical technology, including our Joint Venture, have been meeting with Chinese government healthcare agencies to discuss these developments and to provide feedback. We cannot assure you that additional provincial or national healthcare agencies and administrations will not impose similar limits, and we expect to continue to face increased pricing pressure, both of which could further impact the number of procedures performed and our instruments and accessories revenue in China.

Current wording

Since 2022, several provinces in China have implemented significant limits on what hospitals can charge patients for surgeries using robotic-assisted surgical technology, including soft tissue surgery. These limits have impacted the number of procedures performed in those provinces as well as pricing of our instruments and accessories, which have impacted our instruments and accessories revenue. During the second quarter of 2026, China’s National Healthcare Security Administration (“NHSA”) issued guidelines establishing a unified national framework for robotic-assisted surgery pricing and requiring all provinces to implement robotic-assisted surgery pricing within NHSA-mandated limits in the upcoming quarters. As of the date of this report, the limits that have been implemented have not had a material impact on our business, financial condition, or results of operations, as only a small portion of our installed base in China is currently located in impacted provinces. We cannot assure you that the rollout of the NHSA unified national framework or future actions by provincial or national healthcare agencies will not result in further pricing limits or pressures, which could have a material impact on procedure volumes and our instruments and accessories revenue in China.

Previous wording

First Quarter 2026 Operational and Financial Highlights

Current wording

Second Quarter 2026 Operational and Financial Highlights

Previous wording

•Approximately 847,000 da Vinci procedures were performed during the three months ended March 31, 2026, an increase of 16% compared to approximately 732,000 da Vinci procedures for the three months ended March 31, 2025.

Current wording

•Approximately 889,000 da Vinci procedures were performed during the three months ended June 30, 2026, an increase of 15% compared to approximately 775,000 da Vinci procedures for the three months ended June 30, 2025.

Previous wording

•Approximately 42,700 Ion procedures were performed during the three months ended March 31, 2026, an increase of 39% compared to approximately 30,700 Ion procedures for the three months ended March 31, 2025.

Current wording

•Approximately 47,900 Ion procedures were performed during the three months ended June 30, 2026, an increase of 36% compared to approximately 35,300 Ion procedures for the three months ended June 30, 2025.

Previous wording

•431 da Vinci surgical systems were placed during the three months ended March 31, 2026, an increase of 17% compared to 367 systems during the three months ended March 31, 2025. The first quarter 2026 da Vinci surgical system placements included 232 da Vinci 5 systems compared to 147 systems in the first quarter of 2025.

Current wording

•468 da Vinci surgical systems were placed during the three months ended June 30, 2026, an increase of 18% compared to 395 systems during the three months ended June 30, 2025. The second quarter 2026 da Vinci surgical system placements included 246 da Vinci 5 systems compared to 180 systems in the second quarter of 2025.

Previous wording

•As of March 31, 2026, we had a da Vinci surgical system installed base of approximately 11,395 systems, an increase of 12% compared to an installed base of approximately 10,189 systems as of March 31, 2025.

Current wording

•As of June 30, 2026, we had a da Vinci surgical system installed base of approximately 11,710 systems, an increase of 12% compared to an installed base of approximately 10,488 systems as of June 30, 2025.

Previous wording

•Utilization of da Vinci surgical systems, measured in terms of procedures per system per year, increased 3% relative to the first quarter of 2025.

Current wording

•Utilization of da Vinci surgical systems, measured in terms of procedures per system per year, increased 3% relative to the second quarter of 2025.

Previous wording

•52 Ion systems were placed during the three months ended March 31, 2026, an increase of 6% compared to 49 systems during the three months ended March 31, 2025.

Current wording

•55 Ion systems were placed during the three months ended June 30, 2026, an increase of 2% compared to 54 systems during the three months ended June 30, 2025.

Previous wording

•As of March 31, 2026, we had an Ion system installed base of approximately 1,041 systems, an increase of 22% compared to an installed base of approximately 853 systems as of March 31, 2025.

Current wording

•As of June 30, 2026, we had an Ion system installed base of approximately 1,096 systems, an increase of 21% compared to an installed base of approximately 905 systems as of June 30, 2025.

Previous wording

•Gross profit as a percentage of revenue was 66.1% for the three months ended March 31, 2026, compared to 64.7% for the three months ended March 31, 2025.

Current wording

•Gross profit as a percentage of revenue was 67.8% for the three months ended June 30, 2026, compared to 66.3% for the three months ended June 30, 2025.

Previous wording

•Operating income increased by 48% to $855 million for the three months ended March 31, 2026, compared to $578 million during the three months ended March 31, 2025. Operating income included $213 million and $190 million of share-based compensation expense related to employee stock plans and $7.1 million and $8.5 million of intangible asset-related charges for the three months ended March 31, 2026, and 2025, respectively.

Current wording

•Operating income increased by 31% to $972 million for the three months ended June 30, 2026, compared to $743 million during the three months ended June 30, 2025. Operating income included $213 million and $200 million of share-based compensation expense related to employee stock plans and $24.0 million and $4.8 million of intangible asset-related charges for the three months ended June 30, 2026, and 2025, respectively.

Previous wording

•During the three months ended March 31, 2026, we repurchased 2.3 million shares of our common stock with an aggregate value of $1.13 billion.

Current wording

•During the three months ended June 30, 2026, we repurchased 0.9 million shares of our common stock with an aggregate value of $0.38 billion.

Previous wording

•As of March 31, 2026, we had $7.98 billion in cash, cash equivalents, and investments, compared to $9.03 billion as of December 31, 2025. Cash, cash equivalents, and investments decreased by $1.05 billion, primarily driven by cash used for repurchases of common stock and the acquisition of a business, partially offset by cash generated from operations.

Current wording

•As of June 30, 2026, we had $8.63 billion in cash, cash equivalents, and investments, compared to $9.03 billion as of December 31, 2025. Cash, cash equivalents, and investments decreased by $0.41 billion, primarily driven by cash used for repurchases of common stock and the acquisition of a business, partially offset by cash generated from operations.

Previous wording

The following table summarizes the approximate number of procedures performed on da Vinci surgical systems in the US and OUS for the periods presented (amounts shown in thousands):

Current wording

The following table summarizes the approximate number of procedures performed on da Vinci surgical systems in the U.S. and OUS for the periods presented (number of procedures shown in thousands):

Previous wording

Overall. Total da Vinci procedures performed by our customers grew approximately 16% for the three months ended March 31, 2026, compared to approximately 17% for the three months ended March 31, 2025. The first quarter 2026 procedure growth was largely attributable to growth in U.S. general surgery procedures and OUS procedures.

Current wording

Overall. Total da Vinci procedures performed by our customers grew approximately 15% for the three months ended June 30, 2026, compared to approximately 17% for the three months ended June 30, 2025, and grew approximately 15% for the six months ended June 30, 2026, compared to approximately 17% for the six months ended June 30, 2025. The second quarter 2026 procedure growth was largely attributable to growth in general surgery, gynecology, and OUS urology procedures.

Previous wording

U.S. Procedures. U.S. da Vinci procedures grew approximately 14% for the three months ended March 31, 2026, compared to approximately 13% for the three months ended March 31, 2025. The first quarter 2026 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 approximately 10% in the first quarter of 2026 compared to the first quarter of 2025.

Current wording

U.S. Procedures. U.S. da Vinci procedures grew approximately 12% for the three months ended June 30, 2026, compared to approximately 14% for the three months ended June 30, 2025, and grew approximately 13% for the six months ended June 30, 2026, compared to approximately 14% for the six months ended June 30, 2025. The second quarter 2026 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, partially offset by a high-single-digit decline in U.S. bariatric procedures, which comprise approximately 2% of our total da Vinci procedures. We believe that U.S. procedure growth was also modestly negatively impacted by the expiration of enhanced ACA premium subsidies. The extent of the continued impact of these expirations on U.S. procedure volumes remains uncertain.

Previous wording

OUS Procedures. OUS da Vinci procedures grew approximately 19% for the three months ended March 31, 2026, compared to approximately 24% for the three months ended March 31, 2025. The first quarter 2026 OUS procedure growth was driven by growth in general surgery procedures, most notably colorectal, hernia repair, and cholecystectomy procedures; urologic procedures, most notably prostatectomy and partial nephrectomy procedures; and gynecologic procedures, most notably hysterectomy procedures. The first quarter 2026 OUS procedure growth rate reflects continued da Vinci adoption in European and Asian markets. We saw strong procedure growth in India, the United Kingdom, South Korea, Italy, and Germany during the first quarter of 2026. In China and Japan, the procedure growth rates were lower in the first quarter of 2026 compared to the first quarter of 2025, which reflects lower da Vinci surgical systems placed in these countries in recent quarters. We believe that growth in these global geographic 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.

Current wording

OUS Procedures. OUS da Vinci procedures grew approximately 20% for the three months ended June 30, 2026, compared to approximately 23% for the three months ended June 30, 2025, and grew approximately 20% for the six months ended June 30, 2026, compared to approximately 24% for the six months ended June 30, 2025. The second quarter 2026 OUS procedure growth was largely attributable to growth in general surgery procedures, most notably colorectal, hernia repair, and cholecystectomy procedures; urologic procedures, most notably prostatectomy and partial nephrectomy procedures; and gynecologic procedures, most notably hysterectomy procedures. The second quarter 2026 OUS procedure growth rate reflects continued da Vinci adoption in European and Asian markets. We saw strong procedure growth in India, Italy, and the United Kingdom during the second quarter of 2026. 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.

Previous wording

In the three months ended March 31, 2026, approximately 42,700 biopsy procedures were performed by our customers with Ion systems, compared to approximately 30,700 in the three months ended March 31, 2025. The growth in our overall procedure volume reflects a larger installed base of approximately 1,041 systems, an increase of 22% compared to the installed base of approximately 853 systems as of March 31, 2025. Currently, the vast majority of Ion biopsy procedures are performed in the U.S.

Current wording

In the three months ended June 30, 2026, approximately 47,900 biopsy procedures were performed by our customers with Ion systems, compared to approximately 35,300 in the three months ended June 30, 2025. The growth in our overall procedure volume reflects a larger installed base of approximately 1,096 systems, an increase of 21% compared to the installed base of approximately 905 systems as of June 30, 2025. Currently, the vast majority of Ion biopsy procedures are performed in the U.S.

Previous wording

During the first quarter of 2026, 431 da Vinci surgical systems were placed compared to 367 systems in the first quarter of 2025. By geography, 226 systems were placed in the U.S., 117 in Europe, 62 in Asia, and 26 in other geographic markets during the first quarter of 2026, compared to 204 systems placed in the U.S., 88 in Europe, 52 in Asia, and 23 in other geographic markets during the first quarter of 2025. 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 da Vinci 5 system, including the impact from customers trading in fourth-generation da Vinci systems. During the first quarter of 2026, we placed 232 da Vinci 5 systems, compared to 147 systems in the first quarter of 2025.

Current wording

During the second quarter of 2026, 468 da Vinci surgical systems were placed compared to 395 systems in the second quarter of 2025. By geography, 267 systems were placed in the U.S., 79 in Europe, 75 in Asia, and 47 in other geographic markets during the second quarter of 2026, compared to 216 systems placed in the U.S., 73 in Europe, 69 in Asia, and 37 in other geographic markets during the second quarter of 2025. 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 da Vinci 5 system, including the impact from customers trading in fourth-generation da Vinci systems. During the second quarter of 2026, we placed 246 da Vinci 5 systems, compared to 180 systems in the second quarter of 2025.

Previous wording

As of March 31, 2026, we had a da Vinci surgical system installed base of approximately 11,395 systems compared to approximately 10,189 systems as of March 31, 2025. By geography, 6,477 systems were in the U.S., 2,257 in Europe, 2,049 in

Current wording

As of June 30, 2026, we had a da Vinci surgical system installed base of approximately 11,710 systems compared to approximately 10,488 systems as of June 30, 2025. By geography, 6,615 systems were in the U.S., 2,325 in Europe, 2,111 in Asia, and 659 in the rest of the world. The incremental system installed base reflects continued procedure growth and further customer validation that robotic-assisted surgery addresses their Quintuple Aim objectives.

Previous wording

During the first quarter of 2026, 52 Ion systems were placed compared to 49 systems in the first quarter of 2025. By geography, 39 systems were placed in the U.S., 9 in Europe, 2 in Asia, and 2 in other geographic markets during the first quarter of 2026, compared to 45 systems placed in the U.S., 3 in Europe, and 1 in other geographic markets during the first quarter of 2025. In the U.S., where we estimate that penetration of lung biopsy has exceeded the halfway point, our customers’ focus has begun to shift from increasing capacity to increasing utilization of their existing systems. As of March 31, 2026, we had an Ion system installed base of approximately 1,041 systems, compared to approximately 853 systems as of March 31, 2025.

Current wording

During the second quarter of 2026, 55 Ion systems were placed compared to 54 systems in the second quarter of 2025. By geography, 42 systems were placed in the U.S., 9 in Europe, 2 in Asia, and 2 in other geographic markets during the second quarter of 2026, compared to 47 systems placed in the U.S., 3 in Europe, 2 in Asia, and 2 in other geographic markets during the second quarter of 2025. In the U.S., where we estimate that Ion’s penetration of overall lung biopsy procedures has exceeded the halfway point, our customers’ focus has begun to shift from increasing capacity to increasing utilization of their existing systems. As of June 30, 2026, we had an Ion system installed base of approximately 1,096 systems, compared to approximately 905 systems as of June 30, 2025.