Intuitive Surgical, Inc.

Q2 revenue increased 19% year over year to $2.89 billion, with recurring revenue up 19% to $2.47 billion and recurring revenue equal to 85% of total revenue. Non-GAAP gross margin was 70%, versus 67.9% in Q2 last year; excluding the $36 million IEPA tariff refund benefit, it would have been 68.7%. Non-GAAP operating margin was 42%, and non-GAAP EPS was $2.80 versus $2.19 a year ago; GAAP EPS was $2.29 versus $1.81. Total procedures rose 16%, da Vinci procedures rose 15%, and ION procedures rose 36%. The company placed 468 da Vinci systems and 55 ION systems, and ended the quarter with almost 13 thousand systems installed worldwide. Cash and investments were $8.6 billion, up from $8.0 billion last quarter. For 2026, management kept da Vinci procedure growth guidance at 13.5% to 15.5%, expects to land closer to the midpoint, and raised non-GAAP gross margin guidance to 68% to 69% from 67.5% to 68.5%; non-GAAP operating expense growth is expected at 11% to 13%, stock comp at $880 million to $900 million, other income at $315 million to $335 million, and tax rate at 22% to 23%.

David Rosa said Q2 was solid, with broad adoption across multiport, single port, and ION and steady execution by the company’s teams. He emphasized that Intuitive is seeing more customer segmentation by procedure type and economics, and that the company is positioning its portfolio, including XiR, SP, ION, and da Vinci 5, to serve both high-complexity and high-volume care settings. He was upbeat about long-term innovation, but also careful to frame China, Japan, and the U.S. mix shift as areas with clear local constraints and evolving policy dynamics.

Jamie Samath highlighted strong financial execution: revenue up 19% to $2.89 billion, non-GAAP gross margin at 70%, and non-GAAP EPS at $2.80. She said margin benefited from product cost reductions, fixed overhead leverage, and a $36 million tariff refund, while operating expenses rose 13% as R&D and headcount increased. She also noted $8.6 billion in cash and investments, $379 million of stock repurchases, $112 million of capex, and $1.8 billion of free cash flow in the first half of 2026, up 71% year over year. On guidance, she raised gross margin to 68% to 69% and reiterated a 22% to 23% tax rate.

Analysts pressed management on whether weaker U.S. procedure growth reflected ACA subsidy changes or broader market maturity. Rosa said the company sees both customer feedback and a pattern of more deferrable procedures moderating, but also acknowledged the effect could partly reflect the law of large numbers. Questions also focused on the capital cycle, da Vinci 5 upgrade durability, XiR momentum, Japan reimbursement, China tender centralization, and the extended-use instrument program. Management said U.S. capital demand remains stable, leasing helps customers manage budgets, XiR is opening cost-sensitive and ASC channels, Japan’s reimbursement changes should help over time, and extended-use pricing will be quantified next quarter.