Intuitive Surgical | 10-Q: FY2026 Q2 Revenue Beats Estimate at USD 2.892 B

Revenue: As of FY2026 Q2, the actual value is USD 2.892 B, beating the estimate of USD 2.825 B.

EPS: As of FY2026 Q2, the actual value is USD 2.29, beating the estimate of USD 2.1488.

EBIT: As of FY2026 Q2, the actual value is USD 1.055 B.

Revenue

• Total Revenue: For the three months ended June 30, 2026, total revenue was $2,892.3 million, a 19% increase from $2,440.0 million in 2025. For the six months ended June 30, 2026, total revenue was $5,663.1 million, a 21% increase from $4,693.4 million in 2025.
• Product Revenue: Product revenue for the three months ended June 30, 2026, was $2,419.9 million, an 18% increase from $2,048.8 million in 2025. For the six months ended June 30, 2026, it was $4,757.0 million, a 21% increase from $3,939.2 million in 2025.
  • Instruments and Accessories Revenue: This segment generated $1,734.9 million for the three months ended June 30, 2026, up 18% from $1,474.1 million in 2025. For the six months, it was $3,421.3 million, a 20% increase from $2,841.8 million in 2025.
  • Systems Revenue: Systems revenue was $685.0 million for the three months ended June 30, 2026, a 19% increase from $574.7 million in 2025. For the six months, it was $1,335.7 million, a 22% increase from $1,097.4 million in 2025.
• Service Revenue: For the three months ended June 30, 2026, service revenue was $472.4 million, up 21% from $391.2 million in 2025. For the six months, it was $906.1 million, a 20% increase from $754.2 million in 2025.
• Geographic Revenue: U.S. revenue constituted 67% of total revenue for the three months ended June 30, 2026 and 2025, and 66% and 67% for the six months ended June 30, 2026 and 2025, respectively. OUS revenue accounted for 33% of total revenue for the three months ended June 30, 2026 and 2025, and 34% and 33% for the six months ended June 30, 2026 and 2025, respectively. OUS total revenue was favorably impacted by foreign currency exchange rate fluctuations by $4 million and $40 million for the three and six months ended June 30, 2026, respectively.

Operational Metrics

• Gross Profit:
  • Product Gross Profit: For the three months ended June 30, 2026, product gross profit was $1,642.9 million, a 21% increase from $1,362.6 million in 2025, with a gross profit margin of 67.9% (up from 66.5% in 2025). For the six months, it was $3,200.0 million, a 24% increase from $2,582.3 million in 2025, with a gross profit margin of 67.3% (up from 65.6% in 2025).
  • Service Gross Profit: Service gross profit was $317.5 million for the three months ended June 30, 2026, a 24% increase from $255.3 million in 2025, with a gross profit margin of 67.2% (up from 65.3% in 2025). For the six months, it was $590.9 million, a 20% increase from $493.3 million in 2025, with a gross profit margin of 65.2% (down from 65.4% in 2025).
• Operating Expenses:
  • Selling, General, and Administrative (SG&A): SG&A expenses were $617.9 million for the three months ended June 30, 2026, a 10% increase from $561.2 million in 2025, representing 21% of total revenue (down from 23% in 2025). For the six months, SG&A expenses were $1,231.2 million, a 9% increase from $1,124.6 million in 2025, representing 22% of total revenue (down from 24% in 2025).
  • Research and Development (R&D): R&D expenses were $370.6 million for the three months ended June 30, 2026, an 18% increase from $313.3 million in 2025, representing 13% of total revenue (consistent with 2025). For the six months, R&D expenses were $732.5 million, a 16% increase from $629.5 million in 2025, representing 13% of total revenue (consistent with 2025).
• Income from Operations: For the three months ended June 30, 2026, income from operations was $971.9 million, a 31% increase compared to $743.4 million in 2025. For the six months, it was $1,827.2 million, compared to $1,321.5 million in 2025.
• Net Income: Net income attributable to Intuitive Surgical, Inc. was $818.1 million for the three months ended June 30, 2026, compared to $658.4 million in 2025. For the six months, it was $1,639.6 million, compared to $1,356.8 million in 2025.
• Share-Based Compensation Expense: Total share-based compensation expense before income taxes was $212.8 million for the three months ended June 30, 2026, compared to $199.9 million in 2025. For the six months, it was $426.1 million, compared to $389.6 million in 2025.
• Intangible Asset Amortization: Total intangible asset amortization was $24.0 million for the three months ended June 30, 2026, compared to $3.2 million in 2025. For the six months, it was $31.1 million, compared to $6.6 million in 2025.

Cash Flow

• Net Cash Provided by Operating Activities: For the six months ended June 30, 2026, net cash provided by operating activities was $1,972.9 million, compared to $1,297.0 million in 2025.
• Net Cash Used in Investing Activities: For the six months ended June 30, 2026, net cash used in investing activities was -$941.1 million, compared to $474.2 million provided by investing activities in 2025.
• Net Cash Used in Financing Activities: For the six months ended June 30, 2026, net cash used in financing activities was -$1,641.6 million, compared to -$383.6 million in 2025.
• Cash, Cash Equivalents, and Investments: As of June 30, 2026, cash, cash equivalents, and investments totaled $8.63 billion, a decrease of $0.41 billion from $9.03 billion as of December 31, 2025.

Unique Metrics

• da Vinci Procedures: Approximately 889,000 da Vinci procedures were performed for the three months ended June 30, 2026, a 15% increase compared to 775,000 in 2025. U.S. da Vinci procedures grew 12%, while OUS da Vinci procedures grew 20% for the same period.
• Ion Procedures: Approximately 47,900 Ion procedures were performed for the three months ended June 30, 2026, a 36% increase compared to 35,300 in 2025.
• da Vinci System Placements: 468 da Vinci surgical systems were placed during the three months ended June 30, 2026, an 18% increase from 395 systems in 2025. The installed base of da Vinci surgical systems was approximately 11,710 as of June 30, 2026, a 12% increase from 10,488 systems as of June 30, 2025. 246 da Vinci 5 systems were placed in Q2 2026, compared to 180 in Q2 2025.
• Ion System Placements: 55 Ion systems were placed during the three months ended June 30, 2026, a 2% increase from 54 systems in 2025. The installed base of Ion systems was approximately 1,096 as of June 30, 2026, a 21% increase from 905 systems as of June 30, 2025.
• da Vinci Surgical System Average Selling Price (ASP): The ASP was approximately $1.59 million for the three months ended June 30, 2026, compared to $1.50 million for the same period in 2025.
• Recurring Revenue: Total recurring revenue was $2,469.1 million for the three months ended June 30, 2026, and $4,839.4 million for the six months ended June 30, 2026, representing 85% of total revenue for both periods.
• Lease Buyouts Revenue: Revenue from Lease Buyouts was $56 million for the three months ended June 30, 2026, compared to $30 million in 2025.
• Tariffs: Tariffs and other trade measures recognized in total cost of revenue were $20.8 million and $48.8 million for the three and six months ended June 30, 2026, respectively. The company recognized $35.9 million and $27.5 million in refunds related to IEEPA tariffs for the three months ended June 30, 2026, reducing total cost of revenue and cost of service revenue, respectively.
• Stock Repurchase Program: As of June 30, 2026, approximately $4.7 billion remained authorized for share repurchases, and Intuitive Surgical, Inc. repurchased 0.9 million shares for $0.38 billion during the three months ended June 30, 2026.

Future Outlook and Strategy

Intuitive Surgical, Inc. expects to continue substantial investments in R&D to expand product development and anticipates R&D expenses to increase. Depreciation expense is also expected to rise in the remainder of 2026 due to infrastructure build-out and higher intangible asset amortization from a Q1 2026 acquisition. While OUS procedures and revenue are projected to form a larger part of the business long-term, future system placements face risks from supply chain issues, economic and geopolitical conditions, and increased competition, especially in China.