Intuitive Surgical Q4 2025 Intuitive Surgical Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Intuitive Surgical Inc Earnings Call
Speaker #1: To participate, you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 11 again.
Speaker #1: Please note, this conference is being recorded. Now, it's my pleasure to turn the call over to the Vice President of Investor Relations, Dan Connally.
Speaker #2: Good afternoon, and welcome to Intuitive's fourth quarter earnings conference call. Joining me today are Dave Rosa, our CEO, and Jamie Samath, our CFO. Before we begin, I would like to remind you that comments on today's call may contain forward-looking statements.
Dan Connally: Good afternoon, and welcome to Intuitive Q4 earnings conference call. Joining me today are Dave Rosa, our CEO, and Jamie Samath, our CFO. Before we begin, I would like to remind you that comments on today's call may contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in our Securities and Exchange Commission filings, including our most recent 10-K filed on January 31, 2025, and Form 10-Q filed on October 22, 2025. Our SEC filings can be found through our website at intuitive.com or at the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements. Please note that this conference call will be available for audio replay on our website in the events section under our Investor Relations page.
Dan Connally: Good afternoon, and welcome to Intuitive Q4 earnings conference call. Joining me today are Dave Rosa, our CEO, and Jamie Samath, our CFO. Before we begin, I would like to remind you that comments on today's call may contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in our Securities and Exchange Commission filings, including our most recent 10-K filed on January 31, 2025, and Form 10-Q filed on October 22, 2025. Our SEC filings can be found through our website at intuitive.com or at the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements. Please note that this conference call will be available for audio replay on our website in the events section under our Investor Relations page.
Speaker #2: Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in our Securities and Exchange Commission filings, including our most recent 10-K filed on January 31, 2025, and Form 10-Q filed on October 22, 2025.
Speaker #2: Our SEC filings can be found through our website at intuitive.com or at the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements.
Speaker #2: Please note that this conference call will be available for audio replay on our website, in the Events section under our Investor Relations page. We have posted today's press release and supplementary financial data tables to our website.
Dan Connally: We have posted today's press release and supplementary financial data tables to our website. Our format for this afternoon's earnings conference call is as follows: Dave will review business and operational highlights. Jamie will provide a review of our financial results and procedure highlights. I will review clinical highlights and discuss our updated financial outlook for 2026. And finally, we will host a question-and-answer session. With that, I will turn it over to Dave.
We have posted today's press release and supplementary financial data tables to our website. Our format for this afternoon's earnings conference call is as follows: Dave will review business and operational highlights. Jamie will provide a review of our financial results and procedure highlights. I will review clinical highlights and discuss our updated financial outlook for 2026. And finally, we will host a question-and-answer session. With that, I will turn it over to Dave.
Speaker #2: Our format for this afternoon's earnings conference call is as follows: Dave will review business and operational highlights, Jamie will provide a review of our financial results and procedure highlights, I will review clinical highlights and discuss our updated financial outlook for 2026, and finally, we will host a question-and-answer session.
Speaker #2: With that, I will turn it over to
Speaker #2: Dave: Good afternoon, and thank you.
Dave Rosa: Good afternoon, and thank you for joining us. I'll begin with summarizing our performance in 2025 and sharing our perspective as we enter 2026. 2025 was a strong year for Intuitive, driven by multi-specialty da Vinci procedure growth across the globe, increasing adoption of da Vinci 5, and higher utilization across our three platforms. Physicians used our systems to treat more than 3.1 million patients in the year. Since the first procedure in 1997, more than 20 million patients have been treated using Intuitive platforms. While meaningful progress has been made in advancing minimally invasive care, we continue to believe we are in the early stages of this journey. We started 2025 with four strategic priorities. First, focusing on the full launch of da Vinci 5, its regional clearances, and follow-on feature releases. Second, pursuing increased adoption for our focused procedures by country through training, commercial activities, and market access efforts.
Dave Rosa: Good afternoon, and thank you for joining us. I'll begin with summarizing our performance in 2025 and sharing our perspective as we enter 2026. 2025 was a strong year for Intuitive, driven by multi-specialty da Vinci procedure growth across the globe, increasing adoption of da Vinci 5, and higher utilization across our three platforms. Physicians used our systems to treat more than 3.1 million patients in the year. Since the first procedure in 1997, more than 20 million patients have been treated using Intuitive platforms.
Speaker #3: Thank you for joining us. I'll begin with summarizing our performance in 2025 and sharing our perspective as we enter 2026. 2025 was a strong year for Intuitive.
Speaker #3: Driven by multi-specialty da Vinci procedure growth across the globe, increasing adoption of da Vinci 5, and higher utilization across our three platforms, physicians used our systems to treat more than 3.1 million patients in the year.
Speaker #3: Since the first procedure in 1997, more than 20 million patients have been treated using Intuitive platforms. While meaningful progress has been made in advancing minimally invasive care, we continue to believe we are in the early stages of this journey.
While meaningful progress has been made in advancing minimally invasive care, we continue to believe we are in the early stages of this journey. We started 2025 with four strategic priorities. First, focusing on the full launch of da Vinci 5, its regional clearances, and follow-on feature releases. Second, pursuing increased adoption for our focused procedures by country through training, commercial activities, and market access efforts.
Speaker #3: We started 2025 with four strategic priorities: First, focusing on the full launch of da Vinci 5, its regional clearances, and follow-on feature releases; second, pursuing increased adoption for our focused procedures by country through training, commercial activities, and market access efforts; third, driving continued progress in building industrial scale, product quality, and manufacturing optimization; and finally, focusing on excellence and availability of our digital tools.
Dave Rosa: Third, driving continued progress in building industrial scale, product quality, and manufacturing optimization. And finally, focusing on excellence and availability of our digital tools. I was pleased with our progress across these priorities. In 2025, da Vinci procedures increased approximately 18%, with multi-port procedures growing 17% and single-port procedures growing 87%. Combined with 51% Ion procedure growth, total procedures grew 19% for the year. In the US, da Vinci procedures increased 15% to more than 2 million, with notable contributions from general surgery procedures, including after-hours use. Internationally, da Vinci procedures increased by 23% to over 1.1 million. The growth rates were 21% in Europe, 24% in Asia, and 27% in rest of world markets. As a result, procedures outside the US accounted for roughly 35% of our global procedures, reflecting clinical demand, improved market access, broad training initiatives, and supportive economics.
Third, driving continued progress in building industrial scale, product quality, and manufacturing optimization. And finally, focusing on excellence and availability of our digital tools. I was pleased with our progress across these priorities. In 2025, da Vinci procedures increased approximately 18%, with multi-port procedures growing 17% and single-port procedures growing 87%. Combined with 51% Ion procedure growth, total procedures grew 19% for the year. In the US, da Vinci procedures increased 15% to more than 2 million, with notable contributions from general surgery procedures, including after-hours use. Internationally, da Vinci procedures increased by 23% to over 1.1 million. The growth rates were 21% in Europe, 24% in Asia, and 27% in rest of world markets. As a result, procedures outside the US accounted for roughly 35% of our global procedures, reflecting clinical demand, improved market access, broad training initiatives, and supportive economics.
Speaker #3: I was pleased with our progress across these priorities. In 2025, da Vinci procedures increased approximately 18%, with multi-port procedures growing 17%, and single-port procedures growing 87%.
Speaker #3: Combined with 51% ION procedure growth, total procedures grew 19% for the year. In the US, da Vinci procedures increased 15% to more than 2 million, with notable contributions from general surgery procedures, including after-hours use.
Speaker #3: Internationally, da Vinci procedures increased by 23% to over 1.1 million. The growth rates were 21% in Europe, 24% in Asia, and 27% in the rest of the world markets.
Speaker #3: As a result, procedures outside the US accounted for roughly 35% of our global procedures. Reflecting clinical demand, improved market access, broad training initiatives, and supportive economics, going forward we will continue to invest in market access activities and local evidence generation to meet our customers' clinical and economic objectives.
Dave Rosa: Going forward, we will continue to invest in market access activities and local evidence generation to meet our customers' clinical and economic objectives. In 2025, global system utilization increased 3% across our da Vinci platforms. Multi-port grew 3%, single-port 29%, and Ion 9%. Turning to capital, we placed 1,721 da Vinci systems in 2025, including 870 da Vinci 5 systems, 107 SP systems, and 195 Ion systems. Demand for da Vinci 5 strengthened throughout the year, with customers responding to broader availability as we scaled manufacturing and increasing capability through subsequent software and product releases. In the US, we saw robust demand for system upgrades and dual-console systems, reflecting customer interest in standardization, training, and mentoring. In the second half of the year, we launched da Vinci 5 in Europe, the UK, and Japan.
Going forward, we will continue to invest in market access activities and local evidence generation to meet our customers' clinical and economic objectives. In 2025, global system utilization increased 3% across our da Vinci platforms. Multi-port grew 3%, single-port 29%, and Ion 9%. Turning to capital, we placed 1,721 da Vinci systems in 2025, including 870 da Vinci 5 systems, 107 SP systems, and 195 Ion systems. Demand for da Vinci 5 strengthened throughout the year, with customers responding to broader availability as we scaled manufacturing and increasing capability through subsequent software and product releases. In the US, we saw robust demand for system upgrades and dual-console systems, reflecting customer interest in standardization, training, and mentoring. In the second half of the year, we launched da Vinci 5 in Europe, the UK, and Japan.
Speaker #3: In 2025, global system utilization increased 3% across our da Vinci platforms. Multi-port grew 3%, single-port 29%, and ION 9%. Turning to capital, we placed 1,721 da Vinci systems in 2025, including 870 da Vinci 5 systems and 107 SP systems.
Speaker #3: And 195 ION systems. Demand for da Vinci 5 strengthened throughout the year, with customers responding to broader availability as we scaled manufacturing and increasing capability through subsequent software and product releases.
Speaker #3: In the U.S., we saw robust demand for system upgrades and dual-console systems, reflecting customer interest in standardization, training, and mentoring. In the second half of the year, we launched da Vinci 5 in Europe, the UK, and Japan.
Dave Rosa: For the year, we placed 58 da Vinci 5 systems outside the US, mostly in Europe, and we are pleased with feedback from these early adopters. In 2025, we began offering refurbished da Vinci Xi systems as an integral part of our system strategy and placed 42 Xir systems in the year. Looking ahead, we believe there is a sizable long-term opportunity for our da Vinci Xir system and related economic programs to expand access to da Vinci surgery internationally and in US ambulatory surgery centers. Financially, revenue grew 21% year over year to $10.1 billion. Operating margins of 37% reflected our deliberate investments in R&D and manufacturing scale, as well as the impacts of tariffs and newer platform mix. Cost-efficiency initiatives helped to partially offset these pressures. Turning to our da Vinci platforms, customer feedback remains positive as da Vinci 5 continues to expand to new indications and geographies.
For the year, we placed 58 da Vinci 5 systems outside the US, mostly in Europe, and we are pleased with feedback from these early adopters. In 2025, we began offering refurbished da Vinci Xi systems as an integral part of our system strategy and placed 42 Xir systems in the year. Looking ahead, we believe there is a sizable long-term opportunity for our da Vinci Xir system and related economic programs to expand access to da Vinci surgery internationally and in US ambulatory surgery centers.
Speaker #3: For the year, we placed 58 da Vinci 5 systems outside the US, mostly in Europe, and we are pleased with feedback from these early adopters.
Speaker #3: In 2025, we began offering refurbished da Vinci Xi systems as an integral part of our system strategy, and placed 42 XiR systems in the year.
Speaker #3: Looking ahead, we believe there is a sizable long-term opportunity for our da Vinci XIR system and related economic programs to expand access to da Vinci surgery internationally and in U.S. ambulatory surgery centers.
Financially, revenue grew 21% year over year to $10.1 billion. Operating margins of 37% reflected our deliberate investments in R&D and manufacturing scale, as well as the impacts of tariffs and newer platform mix. Cost-efficiency initiatives helped to partially offset these pressures. Turning to our da Vinci platforms, customer feedback remains positive as da Vinci 5 continues to expand to new indications and geographies.
Speaker #3: Financially, revenue grew 21% year-over-year to $10.1 billion. Operating margins of 37% reflected our deliberate investments in R&D and manufacturing scale, as well as the impacts of tariffs and newer platform mix.
Speaker #3: Cost-efficiency initiatives helped to partially offset these pressures. Turning to our da Vinci platforms, customer feedback remains positive as da Vinci 5 continues to expand to new indications and geographies.
Dave Rosa: Surgeons highlight the benefits of greater autonomy and enhanced efficiency, reflected in the higher utilization trends we're seeing relative to Xi. Improved vision, force feedback capabilities, and ongoing UI enhancements have also supported broad interest in da Vinci 5. We are excited to fully launch our force feedback instruments and work with customers to establish the clinical impact of force feedback at scale. This month, we received FDA clearance for several cardiac procedures on da Vinci 5 using non-force feedback instruments. Given the complexity of minimally invasive cardiac surgery, we are planning a measured rollout to support training, education, and adoption. We believe deeply that patients requiring cardiac surgery can benefit from a minimally invasive approach with da Vinci and look forward to actively supporting our customers through these procedures.
Surgeons highlight the benefits of greater autonomy and enhanced efficiency, reflected in the higher utilization trends we're seeing relative to Xi. Improved vision, force feedback capabilities, and ongoing UI enhancements have also supported broad interest in da Vinci 5. We are excited to fully launch our force feedback instruments and work with customers to establish the clinical impact of force feedback at scale. This month, we received FDA clearance for several cardiac procedures on da Vinci 5 using non-force feedback instruments. Given the complexity of minimally invasive cardiac surgery, we are planning a measured rollout to support training, education, and adoption. We believe deeply that patients requiring cardiac surgery can benefit from a minimally invasive approach with da Vinci and look forward to actively supporting our customers through these procedures.
Speaker #3: Surgeons highlight the benefits of greater autonomy and enhanced efficiency, reflected in the higher utilization trends we're seeing relative to Xi. Improved vision, force feedback capabilities, and ongoing UI enhancements have also supported broad interest in da Vinci 5.
Speaker #3: We are excited to fully launch our force feedback instruments and work with customers to establish the clinical impact of force feedback at scale. This month, we received FDA clearance for several cardiac procedures on da Vinci 5 using non-force feedback instruments.
Speaker #3: Given the complexity of minimally invasive cardiac surgery, we are planning a measured rollout to support training, education, and adoption. We believe deeply that patients requiring cardiac surgery can benefit from a minimally invasive approach with da Vinci, and look forward to actively supporting our customers through these procedures.
Dave Rosa: Over the past year, we released two software updates that improved surgeon awareness in the console, supported better intraoperative decision-making, and established the foundation for future remote updates. In 2026, da Vinci 5 capabilities will continue to grow as we introduce additional products and features. My Intuitive Plus, our digital subscription package offered with da Vinci 5, includes simulation, telecollaboration, and Case Insights, and is designed to help customers understand their surgical performance, collaborate in real time, and receive personalized training recommendations. Adoption of our telepresence capabilities continues to increase, supported by recent software changes that enable surgeon-initiated scheduling. Surgeons are now able to more easily tap into the collective knowledge of the da Vinci community through real-time case observation, collaboration, and mentoring. Increasingly, we are hearing from IDN executives that they value the ability to connect flagship hospitals within their broader network to provide consistent, high-quality care to more patients.
Over the past year, we released two software updates that improved surgeon awareness in the console, supported better intraoperative decision-making, and established the foundation for future remote updates. In 2026, da Vinci 5 capabilities will continue to grow as we introduce additional products and features. My Intuitive Plus, our digital subsc
Speaker #3: Over the past year, we released two software updates that improved surgeon awareness in the console, supported better intraoperative decision-making, and established the foundation for future remote updates.
Speaker #3: In 2026, da Vinci 5 capabilities will continue to grow as we introduce additional products and features. MyINTUITIVE+, our digital subscription package offered with da Vinci 5, includes simulation, tele-collaboration, and case insights.
ription package offered with da Vinci 5, includes simulation, telecollaboration, and Case Insights, and is designed to help customers understand their surgical performance, collaborate in real time, and receive personalized training recommendations. Adoption of our telepresence capabilities continues to increase, supported by recent software changes that enable surgeon-initiated scheduling. Surgeons are now able to more easily tap into the collective knowledge of the da Vinci community through real-time case observation, collaboration, and mentoring. Increasingly, we are hearing from IDN executives that they value the ability to connect flagship hospitals within their broader network to provide consistent, high-quality care to more patients.
Speaker #3: And is designed to help customers understand their surgical performance, collaborate in real time, and receive personalized training recommendations. Adoption of our telepresence capabilities continues to increase, supported by recent software changes that enable surgeon-initiated scheduling.
Speaker #3: Surgeons are now able to more easily tap into the collective knowledge of the da Vinci community through real-time case observation, collaboration, and mentoring. Increasingly, we are hearing from IDN executives that they value the ability to connect flagship hospitals within their broader network to provide consistent, high-quality care to more patients.
Speaker #3: Our single-port platform continued to build operating and clinical momentum in 2025. Procedures grew 87%, driven by high rates of growth in Korea and the US, with accretive early growth in Europe, Japan, and Taiwan.
Dave Rosa: Our single-port platform continued to build operating and clinical momentum in 2025. Procedures grew 87%, driven by high rates of growth in Korea and the US, with credible early growth in Europe, Japan, and Taiwan. Our installed base increased by 39% to 377 systems. Since clearance in 2018, we have methodically added indications and capabilities to the platform. In Q4, we received 510(k) clearance for several additional indications, including nipple-sparing mastectomy, inguinal hernia repair, cholecystectomy, and appendectomy. For NSM in particular, we plan a measured rollout to support education, training, and adoption in 2026 and beyond. Feedback on our single-port stapler during its initial launch has been very positive, and moving into broad launch this quarter will support deeper penetration in thoracic and colorectal procedures. We have additional regulatory submissions planned for 2026, and we'll update you on our progress throughout the year.
Our single-port platform continued to build operating and clinical momentum in 2025. Procedures grew 87%, driven by high rates of growth in Korea and the US, with credible early growth in Europe, Japan, and Taiwan. Our installed base increased by 39% to 377 systems. Since clearance in 2018, we have methodically added indications and capabilities to the platform. In Q4, we received 510(k) clearance for several additional indications, including nipple-sparing mastectomy, inguinal hernia repair, cholecystectomy, and appendectomy.
Speaker #3: Our installed base increased by 39% to 377 systems. Since clearance in 2018, we have methodically added indications and capabilities to the platform. In Q4, we received 510(k) clearance for several additional indications, including nipple-sparing mastectomy and inguinal hernia repair, cholecystectomy, and appendectomy.
For NSM in particular, we plan a measured rollout to support education, training, and adoption in 2026 and beyond. Feedback on our single-port stapler during its initial launch has been very positive, and moving into broad launch this quarter will support deeper penetration in thoracic and colorectal procedures. We have additional regulatory submissions planned for 2026, and we'll update you on our progress throughout the year.
Speaker #3: For NSM in particular, we plan a measured rollout to support education, training, and adoption in 2026 and beyond. Feedback on our single-port stapler during its initial launch has been very positive, and moving into broad launch this quarter, we'll support deeper penetration in thoracic and colorectal procedures.
Speaker #3: We have additional regulatory submissions planned for 2026, and we'll update you on our progress throughout the year. Turning to ION, worldwide procedures grew 51% to 144,000.
Dave Rosa: Turning to Ion, worldwide procedures grew 51% to just over 144,000. Since FDA clearance in 2019, physicians have performed over 325,000 Ion procedures, with a global installed base approaching 1,000 systems. In 2026, we remain focused on growing utilization of existing domestic systems and ensuring excellent early results in international markets. We are committed to expanding capabilities of Ion, including our efforts in ROSE, our rapid onsite tissue evaluation technology, and the integration of endobronchial ultrasound. We believe Ion, with these capabilities, will help minimize the time from detection to treatment as we work to improve the survival rate of lung cancer patients. As we enter 2026, our company priorities are as follows. First, the global expansion of our platforms, digital feature releases, and ecosystem enhancements. Second, increased adoption for focused procedures by country through training, commercial activities, and market access efforts.
Turning to Ion, worldwide procedures grew 51% to just over 144,000. Since FDA clearance in 2019, physicians have performed over 325,000 Ion procedures, with a global installed base approaching 1,000 systems. In 2026, we remain focused on growing utilization of existing domestic systems and ensuring excellent early results in international markets. We are committed to expanding capabilities of Ion, including our efforts in ROSE, our rapid onsite tissue evaluation technology, and the integration of endobronchial ultrasound. We believe Ion, with these capabilities, will help minimize the time from detection to treatment as we work to improve the survival rate of lung cancer patients.
Speaker #3: Since FDA clearance in 2019, physicians have performed over 325,000 ION procedures, with a global installed base approaching 1,000 systems. In 2026, we remain focused on growing utilization of existing domestic systems and ensuring excellent early results in international markets.
Speaker #3: We are committed to expanding the capabilities of ION, including our efforts in ROSE, our rapid onsite tissue evaluation technology, and the integration of endobronchial ultrasound.
Speaker #3: We believe ION, with these capabilities, will help minimize the time from detection to treatment as we work to improve the survival rate of lung cancer patients.
As we enter 2026, our company priorities are as follows. First, the global expansion of our platforms, digital feature releases, and ecosystem enhancements. Second, increased adoption for focused procedures by country through training, commercial activities, and market access efforts. Third, building industrial scale, product quality, and manufacturing optimization. And finally, advancing innovation to reach more patients in current and new disease states. With that, I'll turn the time over to Jamie to take you through our business and finances in greater detail.
Speaker #3: As we enter 2026, our company priorities are as follows: first, the global expansion of our platforms, digital feature releases, and ecosystem enhancements; second, increased adoption for focused procedures by country through training, commercial activities, and market access efforts; third, building industrial scale, product quality, and manufacturing optimization; and finally, advancing innovation to reach more patients in current and new disease states.
Dave Rosa: Third, building industrial scale, product quality, and manufacturing optimization. And finally, advancing innovation to reach more patients in current and new disease states. With that, I'll turn the time over to Jamie to take you through our business and finances in greater detail.
Speaker #3: With that, I'll turn the time over to Jamie to take you through our business and finances in greater detail.
Jamie Samath: Good afternoon. I will describe our performance on a non-GAAP or pro forma basis, and I will also summarize our GAAP results later in my remarks. A reconciliation between our pro forma and GAAP results is available on our website. To facilitate a deepening of understanding of the trends within our Ion business, we have added disclosures to the data tables posted on our website. All references to total procedures and their related growth rates include da Vinci and Ion procedures taken together. Q4 and 2025 revenue, procedures, and system placements are in line with our preliminary press release on 14 January 2025. I will briefly review full year 2025 performance before describing our Q4 results in greater detail. 2025 financial performance was strong. Total procedures grew 19%, and total revenue grew 21%. Despite the impact of tariffs, pro forma operating margin improved approximately 70 basis points to 37% for the year.
Jamie Samath: Good afternoon. I will describe our performance on a non-GAAP or pro forma basis, and I will also summarize our GAAP results later in my remarks. A reconciliation between our pro forma and GAAP results is available on our website. To facilitate a deepening of understanding of the trends within our Ion business, we have added disclosures to the data tables posted on our website.
Speaker #2: Good afternoon. I will describe our performance on a non-GAAP, or pro forma, basis and also summarize our GAAP results later in my remarks. A reconciliation between our pro forma and GAAP results is available on our website.
Speaker #2: To facilitate a deepening of understanding of the trends within our ION business, we have added disclosures to the data tables posted on our website.
All references to total procedures and their related growth rates include da Vinci and Ion procedures taken together. Q4 and 2025 revenue, procedures, and system placements are in line with our preliminary press release on 14 January 2025. I will briefly review full year 2025 performance before describing our Q4 results in greater detail. 2025 financial performance was strong. Total procedures grew 19%, and total revenue grew 21%. Despite the impact of tariffs, pro forma operating margin improved approximately 70 basis points to 37% for the year.
Speaker #2: All references to total procedures and their related growth rates include da Vinci and ION procedures taken together. Q4 and 2025 revenue, procedures, and system placements are in line with our preliminary press release on January 14th.
Speaker #2: I will briefly review full-year 2025 performance before describing our Q4 results in greater detail. 2025 financial performance was strong; total procedures grew 19%, and total revenue grew 21%.
Speaker #1: Despite the impact of tariffs . Pro forma operating margin improved approximately 70 basis points to 37% for the year to 37% for the year .
Jamie Samath: Given the strong financial performance, 2025 pro forma EPS increased 22%, marking the third consecutive year of pro forma EPS growth above 20%. Consistent with our financial objectives for 2024, we saw a significant increase in free cash flow to $2.5 billion, up from free cash flow of $1.3 billion in 2024, driven by increased profitability and lower capital expenditures. During the year, we repurchased $2.3 billion of Intuitive stock at an average price of $478 per share. Turning to Q4, total procedure growth is 18%, driven by general surgery in the US and broad-based growth in OUS markets. In Q4, revenue grew 19% to $2.87 billion, with recurring revenue higher by 20% to $2.3 billion, accounting for 81% of total revenue. On a constant currency basis, revenue growth was 18%.
Given the strong financial performance, 2025 pro forma EPS increased 22%, marking the third consecutive year of pro forma EPS growth above 20%. Consistent with our financial objectives for 2024, we saw a significant increase in free cash flow to $2.5 billion, up from free cash flow of $1.3 billion in 2024, driven by increased profitability and lower capital expenditures. During the year, we repurchased $2.3 billion of Intuitive stock at an average price of $478 per share. Turning to Q4, total procedure growth is 18%, driven by general surgery in the US and broad-based growth in OUS markets. In Q4, revenue grew 19% to $2.87 billion, with recurring revenue higher by 20% to $2.3 billion, accounting for 81% of total revenue. On a constant currency basis, revenue growth was 18%.
Speaker #1: Given strong financial performance, 2025 pro forma EPS increased 22%, marking the third consecutive year of pro forma EPS growth above 20%.
Speaker #1: Consistent with our financial objectives for 2024, we saw a significant increase in free cash flow to $2.5 billion, up from free cash flow of $1.3 billion in 2023, driven by increased profitability and lower capital expenditures.
Speaker #1: During the year , we repurchased $2.3 billion of intuitive stock at an average price of $478 per share . Turning to Q4 , total procedure growth was 18% , driven by general surgery in the US and broad based growth in OUS markets .
Speaker #1: In quarter four, revenue grew 19% to $2.87 billion, with recurring revenue higher by 20% to $2.3 billion, accounting for 81% of total revenue.
Speaker #1: On a constant currency basis, revenue growth was 18%. Pro forma operating margin was 37%, which included an impact of approximately 95 basis points from tariffs and a $70 million contribution to the Intuitive Foundation.
Jamie Samath: forma operating margin was 37%, which included an impact of approximately 95 basis points from tariffs and a $70 million contribution to the Intuitive Foundation. The strength of our financial results reflected continuing global expansion and procedure adoption of our da Vinci 5, Ion, and SP platforms. For our da Vinci business, procedures grew 17%. The installed base of da Vinci systems increased by 12% to just over 11,100 systems, and average system utilization increased by 4%. For our Ion platform, we continue to see robust clinical growth, with procedures increasing 44%, the installed base up by 24% to just under 1,000 systems, and average system utilization increasing by 11%. In the US, total procedures increased 16%, reflecting 15% growth in da Vinci procedures and 41% growth in Ion procedures.
forma operating margin was 37%, which included an impact of approximately 95 basis points from tariffs and a $70 million contribution to the Intuitive Foundation. The strength of our financial results reflected continuing global expansion and procedure adoption of our da Vinci 5, Ion, and SP platforms. For our da Vinci business, procedures grew 17%. The installed base of da Vinci systems increased by 12% to just over 11,100 systems, and average system utilization increased by 4%. For our Ion platform, we continue to see robust clinical growth, with procedures increasing 44%, the installed base up by 24% to just under 1,000 systems, and average system utilization increasing by 11%. In the US, total procedures increased 16%, reflecting 15% growth in da Vinci procedures and 41% growth in Ion procedures.
Speaker #1: The strength of our financial results reflected continuing global expansion and procedure adoption of our da Vinci 5, Ion, and SP platforms. For our da Vinci business, procedures grew 17%.
Speaker #1: The install base of da Vinci systems increased by 12% to just over 11,100 systems. And average system utilization increased by 4% for our Ion platform.
Speaker #1: We continue to see robust clinical growth, with procedures increasing 44%. The installed base is up by 24% to just under 1,000 systems, and average system utilization is increasing by 11% in the U.S.
Speaker #1: Total procedures increased 16%, reflecting 15% growth in da Vinci procedures and 41% growth in Ion procedures. Da Vinci procedures performed after hours, a proxy for acute care, increased by 35% in Q4, primarily driven by cholecystectomy and appendectomy procedures, and reflects our support for customers who are expanding access to da Vinci surgery.
Jamie Samath: Vinci procedures performed after hours, approximately for acute care, increased by 35% in Q4, primarily driven by cholecystectomy and appendectomy procedures, and reflects our support for customers who are expanding access to da Vinci surgery. da Vinci utilization in the US increased 3% in Q4, driven by continued adoption of da Vinci 5, where customers are leveraging the system's efficiency advantages to increase cases performed per day. Over the past few years, our customers have increased their efforts to distribute surgeries across different sites of care, from hospitals to hospital outpatient departments to ambulatory surgery centers or ASCs. Minimally invasive surgery has helped enable this shift. As this occurs, we have increased our efforts to expand our footprint in ASCs, which we expect to be a multi-year effort.
Vinci procedures performed after hours, approximately for acute care, increased by 35% in Q4, primarily driven by cholecystectomy and appendectomy procedures, and reflects our support for customers who are expanding access to da Vinci surgery. da Vinci utilization in the US increased 3% in Q4, driven by continued adoption of da Vinci 5, where customers are leveraging the system's efficiency advantages to increase cases performed per day. Over the past few years, our customers have increased their efforts to distribute surgeries across different sites of care, from hospitals to hospital outpatient departments to ambulatory surgery centers or ASCs. Minimally invasive surgery has helped enable this shift. As this occurs, we have increased our efforts to expand our footprint in ASCs, which we expect to be a multi-year effort.
Speaker #1: Da Vinci utilization in the US increased 3% in Q4, driven by continued adoption of Da Vinci 5, where customers are leveraging the system's efficiency advantages to increase cases performed per day.
Speaker #1: Over the past few years, our customers have increased their efforts to distribute surgeries across different sites of care, from hospitals to hospital outpatient departments to ambulatory surgery centers, or ASCs.
Speaker #1: Minimally invasive surgery has helped enable this shift. As this occurs, we have increased our efforts to expand our footprint in ASCs, which we expect to be a multi-year effort.
Jamie Samath: Our initiative currently leverages our Xir system and its associated ecosystem with economic and capital acquisition offerings we believe are well-suited to meet the clinical and financial needs of this environment. Not all ASCs run at the same volume or with the same mix of procedures, and we have started our efforts focused on higher volume ASCs that can sustain a robotic program. Approximately 70% of the ASC procedure opportunity is in ASCs affiliated with our existing IDN customers, where a number of surgeons are already da Vinci trained. In addition, we actively support customers that upgrade to da Vinci 5 in their efforts to slide their existing Xi to the HOPD or ASC setting. Outside the US, in Q4, total procedures grew 22%, and on a day-adjusted basis, total OUS procedure growth was 23%.
Our initiative currently leverages our Xir system and its associated ecosystem with economic and capital acquisition offerings we believe are well-suited to meet the clinical and financial needs of this environment. Not all ASCs run at the same volume or with the same mix of procedures, and we have started our efforts focused on higher volume ASCs that can sustain a robotic program. Approximately 70% of the ASC procedure opportunity is in ASCs affiliated with our existing IDN customers, where a number of surgeons are already da Vinci trained. In addition, we actively support customers that upgrade to da Vinci 5 in their efforts to slide their existing Xi to the HOPD or ASC setting. Outside the US, in Q4, total procedures grew 22%, and on a day-adjusted basis, total OUS procedure growth was 23%.
Speaker #1: Our initiative currently leverages our da Vinci system and its associated ecosystem with economic and capital acquisition offerings. We believe we are well suited to meet the clinical and financial needs of this environment.
Speaker #1: Not all ASCs run the same volume or have the same mix of procedures, and we have started our efforts focused on higher-volume ASCs that can sustain a robotic program.
Speaker #1: Approximately 70% of the ASC procedure opportunity is in ASCs affiliated with our existing Eden customers, where a number of surgeons are already da Vinci trained. In addition, we actively support customers that upgrade to da Vinci 5 in their efforts to slide their existing SHE to the HOPD or ASC setting.
Speaker #1: Outside the US in quarter four , total procedures grew 22% and on a day adjusted basis , total US procedure growth was 23% .
Jamie Samath: Vinci procedures grew 21% in OUS markets, reflecting strong results in Canada, India, Korea, and distributor markets, and solid growth in Germany, the UK, Italy, Spain, and Taiwan. Consistent with last quarter, procedure growth in Japan was a little lower than our expectations, reflecting lower capital placements over the last several quarters. The Japanese Ministry of Health, Labor, and Welfare is currently in the final stages of evaluating granting reimbursement for additional robotic procedures starting in June of 2026. We will provide an update on the outcome on our next earnings call. Taking OUS markets combined, benign general surgery procedures increased 27%, driven by cholecystectomy and hernia repair. Globally, we continue to see strong procedure growth for our SP platform at 78% for Q4, with strength in Korea and continuing strong early-stage growth in Europe, Japan, and Taiwan.
Vinci procedures grew 21% in OUS markets, reflecting strong results in Canada, India, Korea, and distributor markets, and solid growth in Germany, the UK, Italy, Spain, and Taiwan. Consistent with last quarter, procedure growth in Japan was a little lower than our expectations, reflecting lower capital placements over the last several quarters. The Japanese Ministry of Health, Labor, and Welfare is currently in the final stages of evaluating granting reimbursement for additional robotic procedures starting in June of 2026. We will provide an update on the outcome on our next earnings call. Taking OUS markets combined, benign general surgery procedures increased 27%, driven by cholecystectomy and hernia repair. Globally, we continue to see strong procedure growth for our SP platform at 78% for Q4, with strength in Korea and continuing strong early-stage growth in Europe, Japan, and Taiwan.
Speaker #1: da Vinci procedures grew 21% in U.S. markets, reflecting strong results in Canada, India, Korea, and distributor markets, and solid growth in Germany.
Speaker #1: The UK, Italy, Spain, and Taiwan, with consistent last quarter procedure growth. In Japan, growth was a little lower than our expectations, reflecting lower capital placements over the last several quarters.
Speaker #1: The Japanese Ministry of Health, Labor and Welfare is currently in the final stages of evaluating and granting reimbursement for additional robotic procedures starting in June of 2026.
Speaker #1: We will provide an update on the outcome on our next earnings call. Taking U.S. markets combined, benign general surgery procedures increased 27%, driven by cholecystectomy and hernia repair.
Speaker #1: Globally, we continue to see strong procedure growth for our ESP platform, as 78% for Q4 is strength in Korea and continuing strong early-stage growth in Europe, Japan, and Taiwan.
Jamie Samath: In the US, SP average system utilization accelerated, growing 21% as compared to Q4 of last year. We also see encouraging initial growth in thoracic procedures following clearance in 2024 and positive customer feedback on the limited launch of our SP stapler. As a result of our clinical performance, total INA revenue in Q4 grew 17% to $1.7 billion, relatively consistent with overall procedure growth. da Vinci INA revenue per procedure was approximately $1,850 compared to $1,860 last year, primarily driven by customer ordering patterns. We also continue to see downward pressure from lower bariatrics procedures and higher cholecystectomy procedures, offset by higher SP procedures and da Vinci 5-specific INA. For our Ion platform, INA revenue per procedure was approximately $2,200, relatively consistent with prior periods.
In the US, SP average system utilization accelerated, growing 21% as compared to Q4 of last year. We also see encouraging initial growth in thoracic procedures following clearance in 2024 and positive customer feedback on the limited launch of our SP stapler. As a result of our clinical performance, total INA revenue in Q4 grew 17% to $1.7 billion, relatively consistent with overall procedure growth. da Vinci INA revenue per procedure was approximately $1,850 compared to $1,860 last year, primarily driven by customer ordering patterns. We also continue to see downward pressure from lower bariatrics procedures and higher cholecystectomy procedures, offset by higher SP procedures and da Vinci 5-specific INA. For our Ion platform, INA revenue per procedure was approximately $2,200, relatively consistent with prior periods.
Speaker #1: In the US, ESP average system utilization accelerated, growing 21% as compared to the fourth quarter of last year. We also see encouraging initial growth in thoracic procedures.
Speaker #1: Following clearance in 2024 and positive customer feedback on the limited launch of our ESP stapler. As a result of our clinical performance, total RNA revenue in quarter four grew 17% to $1.7 billion, relatively consistent with overall procedure growth.
Speaker #1: Da Vinci Ina revenue per procedure was approximately $1,850 , compared to $1,860 last year , primarily driven by customer ordering patterns . We also continue to see downward pressure from lower bariatrics procedures and higher cholecystectomy procedures , offset by higher ESP procedures , and da Vinci five specific Ina for our ion platform Ina revenue per procedure was approximately $2,200 .
Speaker #1: Relatively consistent with prior periods . Turning to capital performance and starting with our Da Vinci business , we placed 532 da Vinci systems in quarter four , an 8% increase from the 493 systems placed in the same quarter last year .
Jamie Samath: Turning to capital performance and starting with our da Vinci business, we placed 532 da Vinci systems in Q4, an 8% increase from the 493 systems placed in the same quarter last year. 303 of the 532 placements were da Vinci 5, including 43 in OUS markets, following recent clearances in Europe and Japan. The installed base of da Vinci systems is now 1,232 systems, used by over 10,000 surgeons since the launch of da Vinci 5. We saw 146 trading transactions in Q4, up from 62 a year ago, primarily driven by US customers upgrading to da Vinci 5. In the US, we placed 304 systems, up from 204 to 284 last year, driven by adoption of da Vinci 5. Outside the US, we placed 228 systems compared to 209 last year. OUS placements included 118 in Europe, 40 in Japan, and 17 in China, compared to 89, 43, and 20, respectively, last year.
Turning to capital performance and starting with our da Vinci business, we placed 532 da Vinci systems in Q4, an 8% increase from the 493 systems placed in the same quarter last year. 303 of the 532 placements were da Vinci 5, including 43 in OUS markets, following recent clearances in Europe and Japan.
Speaker #1: 303 of the 532 placements were da Vinci , five , including 43 in US markets . Following recent clearances in Europe and Japan , the installed base of da Vinci systems is now 1232 systems used by over 10,000 surgeons since the launch of Da Vinci five , we saw 146 trading transactions in Q4 , up from 62 a year ago , primarily driven by US customers upgrading to da Vinci .
The installed base of da Vinci systems is now 1,232 systems, used by over 10,000 surgeons since the launch of da Vinci 5. We saw 146 trading transactions in Q4, up from 62 a year ago, primarily driven by US customers upgrading to da Vinci 5. In the US, we placed 304 systems, up from 204 to 284 last year, driven by adoption of da Vinci 5. Outside the US, we placed 228 systems compared to 209 last year. OUS placements included 118 in Europe, 40 in Japan, and 17 in China, compared to 89, 43, and 20, respectively, last year.
Speaker #1: Five in the US , we placed 304 systems , up 204 from 284 last year , driven by adoption of da Vinci . Five outside the US .
Speaker #1: We placed 228 systems , compared to 209 last year . US placements included 118 in Europe , 40 in Japan and 17 in China , compared to 89 , 43 and 20 respectively last year .
Jamie Samath: We continue to see government budget challenges in Japan and the UK, and robotic competition in China intensified in Q4, where we saw provincial tenders express preferences for local suppliers and lower pricing, impacting our win ratio in the quarter. Within the 532 da Vinci placements, we placed 35 SP systems in Q4, higher than the 30 systems last year, driven primarily by OUS markets. For our Ion platform, we placed 42 systems in Q4, compared to 69 systems last year, including 6 systems placed in OUS markets. Lower Ion placements in the US continue to reflect a joint focus with our customers on increasing utilization. In the US, increased by 11% in Q4. Given our capital performance, Q4 systems revenue grew 20% to $786 million.
We continue to see government budget challenges in Japan and the UK, and robotic competition in China intensified in Q4, where we saw provincial tenders express preferences for local suppliers and lower pricing, impacting our win ratio in the quarter. Within the 532 da Vinci placements, we placed 35 SP systems in Q4, higher than the 30 systems last year, driven primarily by OUS markets. For our Ion platform, we placed 42 systems in Q4, compared to 69 systems last year, including 6 systems placed in OUS markets. Lower Ion placements in the US continue to reflect a joint focus with our customers on increasing utilization. In the US, increased by 11% in Q4. Given our capital performance, Q4 systems revenue grew 20% to $786 million.
Speaker #1: We continue to see government budget challenges in Japan and the U.K., and robotic competition in China intensified in Q4, where we saw provincial tenders express preferences for local suppliers and lower pricing impacting our win ratio in the quarter.
Speaker #1: Within the 532 , da Vinci placements , we placed 35 systems in Q4 , higher than the 30 systems last year , driven primarily by OUS markets .
Speaker #1: For our Ion platform, we placed 42 systems in Q4, compared to 69 systems last year, including six systems placed in OUS markets.
Speaker #1: Lower ion placements in the US continue to reflect a joint focus with our customers on increasing utilization in the US, which increased by 11% in Q4.
Speaker #1: Given our capital performance, fourth quarter systems revenue grew 20% to $786 million for our da Vinci business. Leasing represented 47% of da Vinci placements, as compared to 54% last quarter.
Jamie Samath: For our da Vinci business, leasing represented 47% of da Vinci placements, as compared to 54% last quarter and 45% last year, driven by the mix of customers who prefer to purchase. However, over time, we continue to expect a proportion of systems placed under operating lease arrangements to increase, primarily driven by OUS customers. da Vinci leasing revenue increased 34%, reflecting a 15% expansion of the installed base under operating lease arrangements and a 13% increase in lease revenue per system, driven by a higher mix of da Vinci 5 systems. The average selling price for purchased da Vinci systems was $1.68 million in Q4, as compared to $1.6 million last year, driven by a higher mix of da Vinci 5 systems and a higher mix of dual console systems, partially offset by higher trade-ins. Lease buyout revenue was $39 million, as compared to $22 million last quarter and $28 million last year.
For our da Vinci business, leasing represented 47% of da Vinci placements, as compared to 54% last quarter and 45% last year, driven by the mix of customers who prefer to purchase. However, over time, we continue to expect a proportion of systems placed under operating lease arrangements to increase, primarily driven by OUS customers.
Speaker #1: And 45% last year , driven by the mix of customers who prefer to purchase . However , over time , we continue to expect the proportion of systems placed under operating lease arrangements to increase , primarily driven by OUS customers .
da Vinci leasing revenue increased 34%, reflecting a 15% expansion of the installed base under operating lease arrangements and a 13% increase in lease revenue per system, driven by a higher mix of da Vinci 5 systems. The average selling price for purchased da Vinci systems was $1.68 million in Q4, as compared to $1.6 million last year, driven by a higher mix of da Vinci 5 systems and a higher mix of dual console systems, partially offset by higher trade-ins. Lease buyout revenue was $39 million, as compared to $22 million last quarter and $28 million last year.
Speaker #1: da Vinci leasing revenue increased 34%, reflecting a 15% expansion of the installed base under operating lease arrangements and a 13% increase in lease revenue per system, driven by a higher mix of da Vinci systems.
Speaker #1: The average selling price for purchased da Vinci systems was $1.68 million in Q4, as compared to $1.6 million last year, driven by a higher mix of da Vinci 5 systems and a higher mix of dual console systems.
Speaker #1: Partially offset by higher trade-ins. Lease buyout revenue was $39 million, as compared to $22 million last quarter and $28 million in the year-ago quarter.
Jamie Samath: Q4 service revenue increased 21% to $422 million, reflecting an increase of the da Vinci installed base of 12% and the Ion installed base of 24%. Service revenue per system for our da Vinci installed base increased 7% year over year, primarily reflecting a higher mix of da Vinci 5 systems. Turning now to the rest of the P&L, pro forma gross margin for the quarter was 67.8%, down from 69.5% in Q4 of last year. The year-over-year decline reflects a 95 basis point impact from tariffs, higher facility costs, a greater mix of lower margin da Vinci 5 and Ion revenue, and higher service costs related to da Vinci 5, partially offset by product cost reductions and purchase component savings. Q4 pro forma operating expenses increased 16% year over year, driven by a $70 million donation to the Intuitive Foundation, increased headcount, higher variable compensation costs, and increased facility costs, partially offset by lower legal expenses.
Q4 service revenue increased 21% to $422 million, reflecting an increase of the da Vinci installed base of 12% and the Ion installed base of 24%. Service revenue per system for our da Vinci installed base increased 7% year over year, primarily reflecting a higher mix of da Vinci 5 systems. Turning now to the rest of the P&L, pro forma gross margin for the quarter was 67.8%, down from 69.5% in Q4 of last year.
Speaker #1: For service revenue, increased 21% to $422 million, reflecting an increase of the da Vinci installed base of 12% and the Ion install base of 24%.
Speaker #1: Service revenue per system for our da Vinci installed base increased 7% year over year, primarily reflecting a higher mix of da Vinci 5 systems.
Speaker #1: Turning now to the rest of the P&L, pro forma gross margin for the quarter was 67.8%, down from 69.5% in Q4 of last year.
The year-over-year decline reflects a 95 basis point impact from tariffs, higher facility costs, a greater mix of lower margin da Vinci 5 and Ion revenue, and higher service costs related to da Vinci 5, partially offset by product cost reductions and purchase component savings. Q4 pro forma operating expenses increased 16% year over year, driven by a $70 million donation to the Intuitive Foundation, increased headcount, higher variable compensation costs, and increased facility costs, partially offset by lower legal expenses.
Speaker #1: The year over year decline reflects a 95 basis point impact from tariffs , higher facility costs , a greater mix of lower margin , da Vinci five and ion revenue and higher service costs related to da Vinci five , partially offset by product cost reductions and purchase component savings .
Speaker #1: Quarter four pro forma operating expenses increased 16% year over year , driven by a $70 million donation to the intuitive Foundation . Increased headcount , higher variable compensation costs , and increased facility costs , partially offset by lower legal expenses .
Jamie Samath: We added approximately 200 employees during the quarter, primarily in our core commercial and engineering functions. The increased donation to the Intuitive Foundation, as compared to the $45 million donated in Q4 of last year, reflects our decision to make a multi-year donation, given the impact of new US tax rules effective in 2026. With respect to our plans to go direct in Italy, Spain, and Portugal, we currently expect to close by the end of Q1, resulting in the transfer of approximately 250 employees. Pro forma other income was $86 million for the quarter, as compared to $93 million last quarter, reflecting lower interest income. Our pro forma effective tax rate for Q4 was 20.6%, slightly below our expectations, driven by $11 million in net discrete benefits, primarily related to releases of tax reserves due to statute of limitation expirations and other various adjustments to our tax reserves.
We added approximately 200 employees during the quarter, primarily in our core commercial and engineering functions. The increased donation to the Intuitive Foundation, as compared to the $45 million donated in Q4 of last year, reflects our decision to make a multi-year donation, given the impact of new US tax rules effective in 2026. With respect to our plans to go direct in Italy, Spain, and Portugal, we currently expect to close by the end of Q1, resulting in the transfer of approximately 250 employees.
Speaker #1: We added approximately 200 employees during the quarter , primarily in our core commercial and engineering functions . The increased donation to the intuitive Foundation as compared to the $45 million donated in quarter four of last year , reflects our decision to make a multiyear donation , given the impact of new US tax rules effective in 2026 .
Speaker #1: With respect to our plans to go direct in Italy, Spain, and Portugal, we currently expect to close by the end of Q1, resulting in the transfer of approximately 250 employees.
Pro forma other income was $86 million for the quarter, as compared to $93 million last quarter, reflecting lower interest income. Our pro forma effective tax rate for Q4 was 20.6%, slightly below our expectations, driven by $11 million in net discrete benefits, primarily related to releases of tax reserves due to statute of limitation expirations and other various adjustments to our tax reserves.
Speaker #1: Pro forma other income was $86 million for the as quarter compared to $93 million last quarter , reflecting lower interest income . Our pro forma effective tax rate for quarter four was 20.6% , slightly below our expectations , driven by $11 million in net discrete benefits primarily related to releases of tax reserves due to statute of limitation , expirations and other various adjustments to our tax reserves .
Jamie Samath: forma net income for the fourth quarter was $914 million, compared with $805 million last year. Pro forma earnings per share was $2.53 per share, as compared to $2.21 per share in Q4 of last year. Now turning to our GAAP results. GAAP net income for the quarter was $795 million, or $2.21 per share, compared to $686 million or $1.88 per share in Q4 of last year. The differences between our pro forma and GAAP results are outlined and quantified on our website. We ended the year with $9 billion in cash and investments, up from $8.4 billion last quarter, driven primarily by cash from operations, partially offset by stock repurchases of $201 million and capital expenditures of $155 million. With that, I'll turn it over to Dan to discuss recent clinical publications and our outlook for 2026. Thank you, Jamie.
forma net income for the fourth quarter was $914 million, compared with $805 million last year. Pro forma earnings per share was $2.53 per share, as compared to $2.21 per share in Q4 of last year. Now turning to our GAAP results. GAAP net income for the quarter was $795 million, or $2.21 per share, compared to $686 million or $1.88 per share in Q4 of last year. The differences between our pro forma and GAAP results are outlined and quantified on our website.
Speaker #1: Pro forma net income for the fourth quarter was $914 million, compared with $805 million last year. Pro forma earnings per share was $2.53 per share, as compared to $2.21 per share in quarter four of last year.
Speaker #1: Now , turning to our GAAP results . GAAP net income for the quarter was $795 million , or $2.21 per share , compared to $686 million , or $1.88 per share , in Q4 of last year .
Speaker #1: The differences between our pro forma and GAAP results are outlined and quantified on our website . We ended the year with 9 billion in cash and investments , up from $8.4 billion last quarter , driven primarily by cash from operations , partially offset by stock repurchases of $201 million and capital expenditures of $155 million .
We ended the year with $9 billion in cash and investments, up from $8.4 billion last quarter, driven primarily by cash from operations, partially offset by stock repurchases of $201 million and capital expenditures of $155 million. With that, I'll turn it over to Dan to discuss recent clinical publications and our outlook for 2026. Thank you, Jamie.
Speaker #1: With that, I'll turn it over to Dan to discuss recent clinical publications and our outlook for 2026.
Jamie Samath: Turning to the clinical side of our business, I'd like to share with you data from recent studies that we found to be notable. In addition to the specific data highlighted on this call, we encourage you to consider the wide body of evidence detailing these topics and others in published scientific studies over the years. This past November, Dr. Antonio Gangemi of Alma Mater Studiorum – Università di Bologna in Bologna, Italy, along with co-authors, published The Conversion Study: Open Conversion Risk in Robotic vs. Laparoscopic Surgery, a 20-year meta-analysis in the Annals of Surgery. Through a meta-analysis of literature from 30 different countries, the study compared conversion rates to open surgery for da Vinci and laparoscopic procedures, including abdominal wall and inguinal hernia repairs, gastrectomy, cholecystectomy, and rectal resections. The study included over 200,000 patients treated with da Vinci and over 1.3 million patients treated laparoscopically.
Jamie Samath: Turning to the clinical side of our business, I'd like to share with you data from recent studies that we found to be notable. In addition to the specific data highlighted on this call, we encourage you to consider the wide body of evidence detailing these topics and others in published scientific studies over the years.
Speaker #2: Thank you, Jamie. Turning to the clinical side of our business, I'd like to share with you data from recent studies that we found to be notable.
Speaker #2: In addition to the specific data highlighted on this call, we encourage you to consider the wide body of evidence detailing these topics and others.
Speaker #2: And scientific studies over the years . This past November , Doctor Antonio Gangemi of alma mater Studiorum Universita di Bologna in Bologna , Italy , along with co-authors , published the conversion study Open Conversion Risk in Robotic versus Laparoscopic Surgery , a 20 year meta analysis in the Annals of Surgery .
This past November, Dr. Antonio Gangemi of Alma Mater Studiorum – Università di Bologna in Bologna, Italy, along with co-authors, published The Conversion Study: Open Conversion Risk in Robotic vs. Laparoscopic Surgery, a 20-year meta-analysis in the Annals of Surgery. Through a meta-analysis of literature from 30 different countries, the study compared conversion rates to open surgery for da Vinci and laparoscopic procedures, including abdominal wall and inguinal hernia repairs, gastrectomy, cholecystectomy, and rectal resections. The study included over 200,000 patients treated with da Vinci and over 1.3 million patients treated laparoscopically.
Speaker #2: Through a meta analysis of literature from 30 different countries , the study compared conversion rates to open surgery for da Vinci and laparoscopic procedures , including abdominal wall and inguinal hernia repairs , gastrectomy , cholecystectomy , and rectal resections .
Speaker #2: The study included over 200,000 patients treated with da Vinci and over 1.3 million patients treated laparoscopically. The results demonstrated that patients undergoing robotic-assisted surgery were approximately 50% less likely to experience a conversion to open surgery than patients undergoing a laparoscopic procedure, with similar results across randomized controlled studies.
Jamie Samath: The results demonstrated that patients undergoing robotic-assisted surgery were approximately 50% less likely to experience a conversion to open surgery than patients undergoing a laparoscopic procedure, with similar results across randomized controlled studies, prospective studies, and retrospective study types. The authors hypothesized that technical advantages of robotic-assisted systems, specifically wristed instruments with seven degrees of freedom, 3D high-definition visualization, and physiological tremor filtration, were potential explanatory factors for the results. The authors concluded, "This meta-analysis, which spans over 20 years of peer-reviewed literature and includes 14 oncological and non-oncological surgeries across general surgery and related specialties, suggests that robotic-assisted surgery offers a reduced risk of open conversion compared to laparoscopy. These findings may inform decision-makers considering the adoption of robotic-assisted surgery in general surgery and associated specialties." This past November, Dr.
The results demonstrated that patients undergoing robotic-assisted surgery were approximately 50% less likely to experience a conversion to open surgery than patients undergoing a laparoscopic procedure, with similar results across randomized controlled studies, prospective studies, and retrospective study types. The authors hypothesized that technical advantages of robotic-assisted systems, specifically wristed instruments with seven degrees of freedom, 3D high-definition visualization, and physiological tremor filtration, were potential explanatory factors for the results. The authors concluded, "This meta-analysis, which spans over 20 years of peer-reviewed literature and includes 14 oncological and non-oncological surgeries across general surgery and related specialties, suggests that robotic-assisted surgery offers a reduced risk of open conversion compared to laparoscopy. These findings may inform decision-makers considering the adoption of robotic-assisted surgery in general surgery and associated specialties." This past November, Dr.
Speaker #2: Prospective studies and retrospective study types , the authors hypothesized that technical advantages of robotic assisted systems , specifically wristed instruments with seven degrees of freedom 3D high definition visualization , and physiological tremor filtration were potential explanatory factors for the results .
Speaker #2: The authors concluded , quote , this meta analysis , which spans over 20 years of peer reviewed literature and includes 14 oncological and non-oncological surgeries across general surgery and related specialties , suggests that robotic assisted surgery offers a reduced risk of open conversion compared to laparoscopy .
Speaker #2: These findings may inform decision makers considering the adoption of robotic assisted surgery . In general surgery and associated specialties . Close quote . This past November , Doctor Nadja Henriksen from Bespin Hospital in Copenhagen , Denmark , published procedural costs of robot assisted and laparoscopic ventral and incisional hernia repair .
Jamie Samath: Nadja Henriksen from Bispebjerg Hospital in Copenhagen, Denmark, published Procedural Costs of Robot-Assisted and Laparoscopic Ventral and Incisional Hernia Repair, a propensity-score-matched nationwide database study in the Journal of Abdominal Wall Surgery. Using data from the Danish Hernia Database, which includes all hernia repairs performed in Denmark, the authors compared subjects undergoing elective primary ventral hernia repair or incisional hernia repair via the robotic-assisted approach or the laparoscopic approach from January 2017 to December 2022. After one-to-one propensity-score matching with 554 patients in each of the robotic-assisted and laparoscopic arms, study results showed a significantly shorter length of stay for robotic-assisted procedures at 0.5 days versus 1.2 days for the laparoscopic group, as well as a 44% reduction in the readmission rate for robotic-assisted procedures compared to the laparoscopic group.
Nadja Henriksen from Bispebjerg Hospital in Copenhagen, Denmark, published Procedural Costs of Robot-Assisted and Laparoscopic Ventral and Incisional Hernia Repair, a propensity-score-matched nationwide database study in the Journal of Abdominal Wall Surgery. Using data from the Danish Hernia Database, which includes all hernia repairs performed in Denmark, the authors compared subjects undergoing elective primary ventral hernia repair or incisional hernia repair via the robotic-assisted approach or the laparoscopic approach from January 2017 to December 2022. After one-to-one propensity-score matching with 554 patients in each of the robotic-assisted and laparoscopic arms, study results showed a significantly shorter length of stay for robotic-assisted procedures at 0.5 days versus 1.2 days for the laparoscopic group, as well as a 44% reduction in the readmission rate for robotic-assisted procedures compared to the laparoscopic group.
Speaker #2: A propensity score-matched nationwide database study in the Journal of Abdominal Wall Surgery using data from the Danish Hernia Database, which includes all hernia repairs performed in Denmark.
Speaker #2: The authors compared subjects undergoing elective primary ventral hernia repair, or incisional hernia repair via the robotic-assisted approach, or the laparoscopic approach.
Speaker #2: From January 2017 to December 2022 . After 1 to 1 propensity score matching with 554 patients in each of the robotic assisted and laparoscopic arms , study results showed a significantly shorter length of stay for robotic assisted procedures at 0.5 days , versus 1.2 days for the laparoscopic group , as well as a 44% reduction in the readmission rate for robotic assisted procedures compared to the laparoscopic group .
Jamie Samath: Comparing costs, the mean total perioperative cost of robotic-assisted procedures was significantly lower than laparoscopic procedures, with a EUR 660 difference in total costs between approaches. For robotic primary ventral hernia repair, multivariate regression analysis further confirmed independent association with decreased overall costs. The authors concluded, "While the cost of the robotic surgical equipment surpassed that of conventional laparoscopy, it is offset by the need of more expensive meshes and tacker devices, and higher readmission rates following a laparoscopic approach. This nationwide database study showed that for primary ventral hernias, the mean procedural costs of a robot-assisted and laparoscopic repair are comparable, but for incisional hernia repairs, the mean procedural cost is decreased with a robot-assisted approach." I will now turn to our financial outlook for 2026. Starting with da Vinci procedures.
Comparing costs, the mean total perioperative cost of robotic-assisted procedures was significantly lower than laparoscopic procedures, with a EUR 660 difference in total costs between approaches. For robotic primary ventral hernia repair, multivariate regression analysis further confirmed independent association with decreased overall costs. The authors concluded, "While the cost of the robotic surgical equipment surpassed that of conventional laparoscopy, it is offset by the need of more expensive meshes and tacker devices, and higher readmission rates following a laparoscopic approach. This nationwide database study showed that for primary ventral hernias, the mean procedural costs of a robot-assisted and laparoscopic repair are comparable, but for incisional hernia repairs, the mean procedural cost is decreased with a robot-assisted approach." I will now turn to our financial outlook for 2026. Starting with da Vinci procedures.
Speaker #2: Comparing costs, the mean total perioperative cost of robotic-assisted procedures was significantly lower than laparoscopic procedures, with a €660 difference in total costs between approaches for robotic primary ventral hernia repair.
Speaker #2: Multivariate regression analysis . Further confirmed independent independent association with decreased overall costs . The authors concluded , that while the costs of robotic surgical equipment that of surpassed conventional laparoscopy , it is offset by the need of more expensive meshes and tacker devices and higher readmission rates .
Speaker #2: Following the approach . This nationwide database study showed that for primary ventral hernias , the mean procedural costs of a robot assisted and laparoscopic repair are comparable , but for Incisional hernia repairs , the mean procedural cost is decreased with a robot assisted approach .
Speaker #2: Close quote. I will now turn to our financial outlook for 2026. Starting with da Vinci procedures, as detailed in our announcement earlier this month, 2025 total da Vinci procedures grew approximately 18% year over year to more than 3.1 million procedures performed worldwide.
Jamie Samath: As detailed in our announcement earlier this month, 2025 total da Vinci procedures grew approximately 18% year over year to more than 3.1 million procedures performed worldwide. For 2026, we anticipate full-year da Vinci procedure growth within a range of 13% to 15%. We anticipate primary growth drivers in 2026 to be generally consistent with those in 2025, including general surgery in the US and procedures outside of urology internationally. This range considers the potential impact of changes to ACA premium subsidies and Medicaid funding on hospital and patient behavior in the US, capital pressure in parts of Europe related to macroeconomic impact and shifting governmental priorities, China tender volumes and competitive intensity in that market, recent capital challenges in Japan, how long those persist in 2026, and any related impact on procedures and new pharmaceutical products for obesity management. Turning to gross profit.
As detailed in our announcement earlier this month, 2025 total da Vinci procedures grew approximately 18% year over year to more than 3.1 million procedures performed worldwide. For 2026, we anticipate full-year da Vinci procedure growth within a range of 13% to 15%. We anticipate primary growth drivers in 2026 to be generally consistent with those in 2025, including general surgery in the US and procedures outside of urology internationally.
Speaker #2: For 2026, we anticipate full-year da Vinci procedure growth within a range of 13% to 15%. We anticipate primary growth drivers in 2026 to be generally consistent with those in 2025, including general surgery in the U.S.
Speaker #2: and procedures outside of urology internationally. This range considers the potential impact of changes to ACA premium subsidies and Medicaid funding on hospital and patient behavior in the U.S., capital pressure in parts of Europe related to macroeconomic impact, and shifting governmental priorities.
This range considers the potential impact of changes to ACA premium subsidies and Medicaid funding on hospital and patient behavior in the US, capital pressure in parts of Europe related to macroeconomic impact and shifting governmental priorities, China tender volumes and competitive intensity in that market, recent capital challenges in Japan, how long those persist in 2026, and any related impact on procedures and new pharmaceutical products for obesity management. Turning to gross profit.
Speaker #2: China tender volumes and competitive intensity in that market . Recent capital challenges in Japan . How long those persist in 2026 , and any related impact on procedures and new pharmaceutical obesity products for management .
Jamie Samath: In 2025, our pro forma gross profit margin was 67.6%. In 2026, we expect our pro forma gross profit margin to be within a range of 67% to 68% of net revenue. This year, we forecast an impact from tariffs of 1.2% of net revenue, ±10 basis points. Other factors impacting the projected pro forma gross profit margin guidance include faster growth of newer products in da Vinci 5 and Ion, modest incremental depreciation from recent facility expansion, and the impact from higher da Vinci system upgrades, partially offset by cost reductions. Our actual gross profit margin will vary quarter to quarter, depending largely on product, regional, and trade-in mix and pricing. Turning to operating expenses. In 2025, our pro forma operating expenses grew 12%.
In 2025, our pro forma gross profit margin was 67.6%. In 2026, we expect our pro forma gross profit margin to be within a range of 67% to 68% of net revenue. This year, we forecast an impact from tariffs of 1.2% of net revenue, ±10 basis points. Other factors impacting the projected pro forma gross profit margin guidance include faster growth of newer products in da Vinci 5 and Ion, modest incremental depreciation from recent facility expansion, and the impact from higher da Vinci system upgrades, partially offset by cost reductions. Our actual gross profit margin will vary quarter to quarter, depending largely on product, regional, and trade-in mix and pricing. Turning to operating expenses. In 2025, our pro forma operating expenses grew 12%.
Speaker #2: to gross Turning profit in 2025 , our pro forma gross profit margin was 67.6% . In 2026 , we expect our pro forma gross profit margin to be within a range of 67% and 68% of net revenue this year , we forecast an impact from tariffs of 1.2% of net revenue , plus or minus ten basis points .
Speaker #2: Other factors impacting the projected pro forma gross profit margin guidance include faster growth of newer products in da Vinci 5 and da Vinci i, modest incremental depreciation from recent facility expansion, and the impact from higher da Vinci system upgrades, partially offset by cost reductions.
Speaker #2: Our actual gross profit margin will vary quarter to quarter, depending largely on product, regional and trade end mix, and pricing.
Speaker #2: Turning to operating expenses in 2025 , our pro forma operating expenses grew 12% . In 2026 , we expect pro forma operating expense growth to be within a range of 11% and 15% , due to higher spending in support of advancing early stage R&D programs , as well as incremental expenses associated with our distributor acquisition .
Jamie Samath: In 2026, we expect pro forma operating expense growth to be within a range of 11% to 15% due to higher spending in support of advancing early-stage R&D programs, as well as incremental expenses associated with our distributor acquisition. We estimate non-cash stock compensation expense between $890 million to $920 million. We forecast other income, which is comprised mostly of interest income, to total between $355 million to $375 million. At this time, given our expectation that capital expenditures will return to more normalized levels, we are no longer providing specific capital expenditure guidance. With regard to income tax, in 2025, our pro forma income tax rate was approximately 21%. As we look forward, we estimate our 2026 pro forma income tax rate to be within a range of 22% to 23% of pre-tax income. That concludes our prepared remarks. We will now open the call to your questions. Thank you so much.
In 2026, we expect pro forma operating expense growth to be within a range of 11% to 15% due to higher spending in support of advancing early-stage R&D programs, as well as incremental expenses associated with our distributor acquisition. We estimate non-cash stock compensation expense between $890 million to $920 million. We forecast other income, which is comprised mostly of interest income, to total between $355 million to $375 million.
Speaker #2: We estimate non-cash stock compensation expense between 800 and $90 million and $920 million . We forecast other income , which is comprised mostly of interest income to total between 300 and $55 million and $375 million at this time , given our expectation that capital expenditures will return to more normalized levels , we are no longer providing specific capital expenditure guidance with regard to income tax .
At this time, given our expectation that capital expenditures will return to more normalized levels, we are no longer providing specific capital expenditure guidance. With regard to income tax, in 2025, our pro forma income tax rate was approximately 21%. As we look forward, we estimate our 2026 pro forma income tax rate to be within a range of 22% to 23% of pre-tax income. That concludes our prepared remarks. We will now open the call to your questions.
Speaker #2: In 2025, our pro forma income tax rate was approximately 21%. As we look forward, we estimate our 2026 pro forma income tax rate to be within a range of 22% to 23% of pre-tax income.
Speaker #2: That concludes our prepared remarks. We will now open the call to your questions.
Operator: Thank you so much. And to our tele audience, and as a reminder, if you have a question, press Star 11 to get in the queue and wait for your name to be announced. To remove yourself, press Star 11 again. One moment for our first question, please. It comes from the line of Travis Steed with Bank of America. Please proceed.
Jamie Samath: And to our tele audience, and as a reminder, if you have a question, press Star 11 to get in the queue and wait for your name to be announced. To remove yourself, press Star 11 again. One moment for our first question, please. It comes from the line of Travis Steed with Bank of America. Please proceed. Hey, thanks for taking the question. First, wanted to ask about the FDA approvals for the cardiac non-force feedback instruments. Just trying to get a little more color on what that is and what it opens up. When I was looking at your 2026 priorities that you mentioned, you added new disease states. So if you could elaborate on that, if that's cardiac or there's more there. Sure. Travis, thank you for the question.
Speaker #3: Thank you so much . And to our audience . And as a reminder , if you have a question , press star one .
Speaker #3: To get in the queue and wait for your name to be announced, press star one. To remove yourself, press star one again.
Speaker #3: One moment . For our first question , please . It comes from the line of Travis Steed with Bank of America . Please proceed .
Travis Steed: Hey, thanks for taking the question. First, wanted to ask about the FDA approvals for the cardiac non-force feedback instruments. Just trying to get a little more color on what that is and what it opens up. When I was looking at your 2026 priorities that you mentioned, you added new disease states. So if you could elaborate on that, if that's cardiac or there's more there.
Speaker #4: Hey , thanks for taking the question . First , I wanted to ask about the FDA approvals for the cardiac non force feedback instruments .
Speaker #4: Just trying to get a little more color on what that is and what it opens up. When I was looking at your 2026 priorities that you mentioned, you added new disease states.
Speaker #4: If you could elaborate on that—if that's cardiac, or if there's more there.
Dave Rosa: Sure. Travis, thank you for the question. I'll start maybe with some framing around cardiac and the work we're doing, and then Jamie can follow up a bit. So you know, we've been supporting cardiac surgery for decades and have a good understanding of what cardiac programs need to do to be successful and have great patient outcomes. So there are some foundational aspects that we're working on today.
Speaker #5: Sure . Travis , thank you for the question . I'll start maybe with some framing around cardiac and the work we're doing . And then Jamie can follow up a bit in , in .
Jamie Samath: I'll start maybe with some framing around cardiac and the work we're doing, and then Jamie can follow up a bit. So you know, we've been supporting cardiac surgery for decades and have a good understanding of what cardiac programs need to do to be successful and have great patient outcomes. So there are some foundational aspects that we're working on today. Those include clearances on the platform on da Vinci 5. In certain geographies, we just received the US clearance. We're working through approval in Europe, and several other countries. Part of those indications as well will include force feedback instruments. So cardiac surgery is a wide variety of procedures with a wide variety of tasks. And we do think that force feedback can have some benefit in certain parts of certain procedures.
Speaker #5: So , you know , we've been supporting cardiac surgery for decades . And have a good understanding of what cardiac programs need to do to be a and have great patient there are outcomes .
Speaker #5: And so, some foundational aspects that we're working on today include the clearances on the platform on DB5 in certain geographies. We just received the U.S. clearance.
Those include clearances on the platform on da Vinci 5. In certain geographies, we just received the US clearance. We're working through approval in Europe, and several other countries. Part of those indications as well will include force feedback instruments. So cardiac surgery is a wide variety of procedures with a wide variety of tasks. And we do think that force feedback can have some benefit in certain parts of certain procedures.
Speaker #5: We're working through approval in Europe and several other countries as part of those indications as well, and will include force feedback instruments. And so, cardiac surgery is a wide variety of procedures with a wide variety of tasks.
Speaker #5: And we do think that force feedback can have some benefit in certain parts of certain procedures. And so, the initial clearance here, I think, incorporates our entire portfolio of non-force feedback instruments and has value today for cardiac procedures.
Jamie Samath: And so the initial clearance here, I think, incorporates our entire portfolio of non-force feedback instruments and has value today for cardiac procedures. And again, we'll work to add force feedback in time through the regulatory pathway. We are also developing training pathways to support. It's a unique pathway through to learn the cardiac robotic surgery business, if you will, for minimally invasive approaches with da Vinci. And so we're investing there. We are developing cardiac-specific instrumentation, including force feedback, some accessories, and tuning some of the digital tools we have. Those will be multi-year efforts to bring all of those to the market. And then finally, worked with surgical societies. It's an important aspect of, I think, doing this well for training and other parts that they are helping to develop.
And so the initial clearance here, I think, incorporates our entire portfolio of non-force feedback instruments and has value today for cardiac procedures. And again, we'll work to add force feedback in time through the regulatory pathway. We are also developing training pathways to support. It's a unique pathway through to learn the cardiac robotic surgery business, if you will, for minimally invasive approaches with da Vinci. And so we're investing there. We are developing cardiac-specific instrumentation, including force feedback, some accessories, and tuning some of the digital tools we have. Those will be multi-year efforts to bring all of those to the market. And then finally, worked with surgical societies. It's an important aspect of, I think, doing this well for training and other parts that they are helping to develop.
Speaker #5: And again, we'll work to add force feedback in time through the regulatory pathway. We are also developing two training pathways to support.
Speaker #5: It's a unique pathway through to learn the cardiac robotic surgery business, if you will, for minimally invasive approaches—with Da Vinci.
Speaker #5: And so we're we're investing there . We are developing cardiac specific instrumentation including force feedback . Some accessories and tuning some of the digital tools .
Speaker #5: We have—those will be multi-year efforts to bring all of those to the market. And then finally, we worked with surgical societies.
Speaker #5: It's an important aspect of , I think , doing this well for training and other parts that they are helping to develop . And so that lays the kind of foundation , if you will , for the beginning , for this cardiac journey that we're on , particularly with DB5 .
Jamie Samath: And so that lays this kind of foundation, if you will, for the beginning for this cardiac journey that we're on, particularly with da Vinci 5. And so maybe Jamie. Yes. Travis, I'll just give some numbers maybe for grounding. So in 2025, globally, there were about 17,000 cardiac procedures performed. That's on SP and Xi. That business has been growing for multiples of years, but obviously from a small base. The growth in recent years, including 2025, was accretive to the corporate average. While obviously the cardiac TAM is really quite large, when we do our clinical analysis, when we look at where cardiac is cleared for da Vinci 5, which currently is now the US and Korea, we think the opportunity from a da Vinci 5 perspective or a robotic perspective is about 160,000 procedures per year. And obviously, that has the opportunity to expand if and as we add additional geographies.
And so that lays this kind of foundation, if you will, for the beginning for this cardiac journey that we're on, particularly with da Vinci 5. And so maybe Jamie.
Jamie Samath: Yes. Travis, I'll just give some numbers maybe for grounding. So in 2025, globally, there were about 17,000 cardiac procedures performed. That's on SP and Xi. That business has been growing for multiples of years, but obviously from a small base. The growth in recent years, including 2025, was accretive to the corporate average. While obviously the cardiac TAM is really quite large, when we do our clinical analysis, when we look at where cardiac is cleared for da Vinci 5, which currently is now the US and Korea, we think the opportunity from a da Vinci 5 perspective or a robotic perspective is about 160,000 procedures per year. And obviously, that has the opportunity to expand if and as we add additional geographies.
Speaker #5: And so, maybe Jamie... Yeah.
Speaker #1: Travis I just give some some numbers , maybe for grounding . So in 25 globally , there were about 17,000 cardiac procedures performed .
Speaker #1: That's on C and XXI . That business has been growing for multiples of years . But obviously from a small base , the growth in recent years , including 25 , was accretive to to the corporate average , while obviously the cardiac Tam is is really quite large .
Speaker #1: When we do our clinical analysis, when we look at where cardiac is cleared for da Vinci 5, which currently is now the US and Korea, we think the opportunity from a da Vinci 5 perspective, or a robotic perspective, is about 160,000 procedures per year.
Speaker #1: And obviously, that has the opportunity to expand if and as we add additional geographies.
Jamie Samath: Great. Thanks. That's really helpful. And you've talked a lot on advanced imaging. I'm just curious how you think about incorporating these additional advanced imaging features into the robotic ecosystem. Did you leverage the existing hardware? Is there new hardware? How do you think about recognizing the value that you're providing to customers? Is it just deeper penetration or is there potential for new revenue streams? Just want to try to understand how some of this imaging stuff could come into the business in a more detailed way. Yeah, Travis, some of the advanced imaging capabilities that we've talked about are additional molecules that we're working on, and those are long timelines that will add to the fluorescence imaging capability of the system. Those molecules will have revenue streams attached to them. We recently have talked about kind of a form of hyperspectral imaging that shows tissue oxygenation.
Travis Steed: Great. Thanks. That's really helpful. And you've talked a lot on advanced imaging. I'm just curious how you think about incorporating these additional advanced imaging features into the robotic ecosystem. Did you leverage the existing hardware? Is there new hardware? How do you think about recognizing the value that you're providing to customers? Is it just deeper penetration or is there potential for new revenue streams? Just want to try to understand how some of this imaging stuff could come into the business in a more detailed way.
Speaker #4: Great . Thanks . That's really helpful . And you've talked a lot on advanced imaging . Just curious how you think about incorporating these additional advanced imaging features into the robotic ecosystem .
Speaker #4: Do you leverage the existing hardware or is there a new hardware ? How do you think about recognizing the value of the that you're providing to customers ?
Speaker #4: Is it just deeper penetration , or is their potential for for new revenue streams just want to try to understand like how some of this imaging stuff could could come into the into the business in a more detailed way ?
Dave Rosa: Yeah, Travis, some of the advanced imaging capabilities that we've talked about are additional molecules that we're working on, and those are long timelines that will add to the fluorescence imaging capability of the system. Those molecules will have revenue streams attached to them. We recently have talked about kind of a form of hyperspectral imaging that shows tissue oxygenation.
Speaker #5: Yeah, I know, Travis. Some of the advanced imaging capabilities that we've talked about are additional molecules that we're working on, and those are long timelines that will add to the fluorescence imaging capability of the system.
Speaker #5: Those molecules will have revenue streams attached to them. We recently have talked about kind of a form of hyperspectral imaging that shows tissue oxygenation.
Jamie Samath: That is going to be a capability of the system that requires some new software and some tuning of some of our hardware. All of those are pointed at trying to give more information to the surgeon and to the system where we're able to add perhaps some AI layers to it, but really with the intent of ultimately improving outcomes, be it in prostate cancer or ureter injuries or perhaps in areas of surgery where perfusion, which is where the tissue oxygenation is pointed, can make a difference in outcomes. Great. Thanks a lot. Thank you so much. One moment for our next question, please. He comes from the line of Larry Biegelsen with Wells Fargo. Please proceed. Good afternoon. Thanks for taking the question. I wanted to start with the ASC commentary, Dave.
That is going to be a capability of the system that requires some new software and some tuning of some of our hardware. All of those are pointed at trying to give more information to the surgeon and to the system where we're able to add perhaps some AI layers to it, but really with the intent of ultimately improving outcomes, be it in prostate cancer or ureter injuries or perhaps in areas of surgery where perfusion, which is where the tissue oxygenation is pointed, can make a difference in outcomes.
Speaker #5: That is going to be a capability of the system that requires some new software and some tuning of some of our hardware. All of those are pointed at trying to give more information to the surgeon into the system, where we're able to add perhaps some AI layers to it.
Speaker #5: But really , with the intent of improving , ultimately improving outcomes , be it in prostate cancer or ureter injuries , or perhaps in areas of surgery where perfusion , which is where the tissue oxygenation is pointed , can make a difference in outcomes .
Travis Steed: Great. Thanks a lot.
Operator: Thank you so much. One moment for our next question, please. He comes from the line of Larry Biegelsen with Wells Fargo. Please proceed.
Speaker #4: Great. Thanks a lot.
Speaker #3: Thank you so much. One moment for our next question, please. And it comes from the line of Larry Biegelsen with Wells Fargo.
Larry Biegelsen: Good afternoon. Thanks for taking the question. I wanted to start with the ASC commentary, Dave. I'd love to hear you expand on your comment about expanding your footprint in ASCs. How large is the ASC opportunity for your focus procedures today? What are those key procedures moving to the ASC, and what do you need to do to unlock the opportunity? I did have one follow-up.
Speaker #3: Please proceed .
Speaker #6: Good afternoon. Thanks, Good, for taking the question. I wanted to start with the ASC commentary. Dave, I'd love to hear you expand on your comments about expanding your footprint in ASCs.
Jamie Samath: I'd love to hear you expand on your comment about expanding your footprint in ASCs. How large is the ASC opportunity for your focus procedures today? What are those key procedures moving to the ASC, and what do you need to do to unlock the opportunity? I did have one follow-up. Yeah, maybe Larry, I'll start just kind of always try to start with the problem we're solving or what the customer needs are. I'm going to start there, and then Jamie can jump in on some of the numbers here.
Speaker #6: How large is the ASC opportunity for your focus procedures today? What are those key procedures moving to the ASC, and what do you need to do to unlock the opportunity?
Dave Rosa: Yeah, maybe Larry, I'll start just kind of always try to start with the problem we're solving or what the customer needs are. I'm going to start there, and then Jamie can jump in on some of the numbers here.
Speaker #6: And I did have one follow-up.
Speaker #5: Yeah , maybe maybe Larry , I'll start just kind of I always try to start with the problem we're solving or with the customer needs are and I'm going to start there and then Jamie can jump in on some of the , the numbers here .
Jamie Samath: When I meet with ASC leaders and when they're wanting to say, "I want to establish a soft tissue program within one or more of our ASCs," really what they're looking for are repeatable high-quality clinical outcomes, technology systems that work every day, and operating infrastructure, training, supply chain, reprocessing, those sorts of things that is routine and easily accessible. All of that has to fit into an economic structure that works for the reimbursement levels of that particular ASC. So when I look at what we have in our current portfolio of systems, including now XiR, the broader ecosystem of all the other products and training and services, that is well positioned to serve the needs that we're hearing from our customers. The procedures that are generally within that environment are the ones that you know: cholecystectomy, hernia repairs, and benign GYN.
When I meet with ASC leaders and when they're wanting to say, "I want to establish a soft tissue program within one or more of our ASCs," really what they're looking for are repeatable high-quality clinical outcomes, technology systems that work every day, and operating infrastructure, training, supply chain, reprocessing, those sorts of things that is routine and easily accessible.
Speaker #5: If I , when I meet with ASC leaders and when they're wanting to say I want to establish a soft tissue program within one or more of our ASCs , really what they're looking for are repeatable , high quality , clinical outcomes .
Speaker #5: Technology systems that work every day and an operating infrastructure training , supply chain , reprocessing , those sorts of things that is , is routine and easily accessible .
All of that has to fit into an economic structure that works for the reimbursement levels of that particular ASC. So when I look at what we have in our current portfolio of systems, including now XiR, the broader ecosystem of all the other products and training and services, that is well positioned to serve the needs that we're hearing from our customers. The procedures that are generally within that environment are the ones that you know: cholecystectomy, hernia repairs, and benign GYN. It oftentimes is the lower acuity procedures where the volume and the repeatability can be managed in the ASC environment.
Speaker #5: And all of that has to fit into an economic structure that works for the reimbursement levels of that particular ASC . And so when I when I what look at we have in our current portfolio of systems , including now ser , the broader ecosystem of all the other products and training and services , that is well positioned to serve the needs that we're hearing from our customers .
Speaker #5: The procedures that are generally within that environment are the ones that you know , cholecystectomy , hernia repairs , benign gyn . It oftentimes is the lower acuity procedures where the volume and the repeatability can be managed in the ASC environment .
Jamie Samath: It oftentimes is the lower acuity procedures where the volume and the repeatability can be managed in the ASC environment. I'd just say, Larry, in terms of numbers today, it's a relatively small proportion of US procedures done, but we do see it growing at an accretive rate. I think those trends have been talked about just broadly. Most of our commentary today reflects what we've heard from customers. I think that in part reflects the desire of payers to take advantage of the lower reimbursement in the ASC setting. For us now, with the launch of da Vinci 5, the trading cycle has commenced, and we get the Xis back, and we can refurbish them. We think the Xir, in combination with our instrument portfolio, is well positioned for that setting as procedures grow in ASCs. That's super helpful.
Jamie Samath: I'd just say, Larry, in terms of numbers today, it's a relatively small proportion of US procedures done, but we do see it growing at an accretive rate. I think those trends have been talked about just broadly. Most of our commentary today reflects what we've heard from customers. I think that in part reflects the desire of payers to take advantage of the lower reimbursement in the ASC setting. For us now, with the launch of da Vinci 5, the trading cycle has commenced, and we get the Xis back, and we can refurbish them. We think the Xir, in combination with our instrument portfolio, is well positioned for that setting as procedures grow in ASCs.
Speaker #1: Just to say, Larry, in terms of numbers today, it's a relatively small proportion of US procedures done. But we do see it growing at an accretive rate.
Speaker #1: I think those trends have been talked about just broadly. Most of our commentary today reflects what we've heard from customers. I think that in part reflects desire of payers to take advantage of the lower reimbursement in the ASC setting.
Speaker #1: for And us now , with the launch of Da Vinci five , the trading cycle has commenced and we get the the excise back and we can refurbish them .
Speaker #1: We think the shear in combination with our instrument portfolio is is , well positioned for that setting . As , as procedures grow in ASCs .
Travis Steed: That's super helpful. Jamie, how should we think about utilization in 2026 and system ASPs in 2026 after we saw strong growth in 2025? Did the refurbished Xi's put some downward pressure on the ASPs, and the move into the ASCs maybe put some downward pressure on utilization? Thank you.
Jamie Samath: Jamie, how should we think about utilization in 2026 and system ASPs in 2026 after we saw strong growth in 2025? Did the refurbished Xi's put some downward pressure on the ASPs, and the move into the ASCs maybe put some downward pressure on utilization? Thank you. Yeah, I'd just say if you look at the last couple of quarters, in each case, we saw overall da Vinci utilization grow 4%. We think that's a healthy level, but we're not ready to predict what that will be in '26. For the presence that we already have in ASCs, because we've been focused primarily with our existing IDN customers and we've looked for programs that have strong soft tissue surgery volumes that can support a robotics program, the existing utilization that we have in ASCs is actually pretty good. And I think economically then, obviously, that works for them.
Speaker #6: That's super helpful . Jamie , how should we think about utilization in 2026 and system ASPs in 2026 ? After we saw strong growth in 2025 , do the refurbished she's put some downward pressure on the ASPs and and the move into the ASCs .
Speaker #6: Maybe put some downward pressure on utilization. Thank you.
Jamie Samath: Yeah, I'd just say if you look at the last couple of quarters, in each case, we saw overall da Vinci utilization grow 4%. We think that's a healthy level, but we're not ready to predict what that will be in '26. For the presence that we already have in ASCs, because we've been focused primarily with our existing IDN customers and we've looked for programs that have strong soft tissue surgery volumes that can support a robotics program, the existing utilization that we have in ASCs is actually pretty good. And I think economically then, obviously, that works for them.
Speaker #1: Yeah, I just say, if you look at the last couple of quarters, in each case we saw overall da Vinci utilization grow 4%.
Speaker #1: We think that's a healthy level . But we're not ready to to predict what that will be in 26 for the presence that we already have in ASCs , because we've been focused primarily with our existing Iden customers , and we've looked for programs that have strong soft tissue surgery volumes that can support a robotics program .
Speaker #1: The existing utilization that we have in ASCs is actually pretty good, and I think economically, then obviously that works for them. On system ASPs, I'm not going to predict what the overall '26 direction will be.
Jamie Samath: On system ASPs, I'm not going to predict what the overall 2026 direction will be. Obviously, we don't guide capital. I'd just say you should expect a higher da Vinci 5 mix in 2026 versus 2025. That reflects, of course, the fact that we have in part new geographies cleared with da Vinci 5. You should also expect a higher mix of Xir. That's going to be ASPs that are quite a bit below where Xi is today, but we haven't said yet what the Xir price range is likely to be. And I would expect higher trade-ins. And so there's a set of offsetting mix dynamics there that, frankly, we'll let you model. I'd just also say in terms of system ASPs, of course, that is only on systems purchased, which roughly is about half of the system placements today. Thank you. Thank you so much.
On system ASPs, I'm not going to predict what the overall 2026 direction will be. Obviously, we don't guide capital. I'd just say you should expect a higher da Vinci 5 mix in 2026 versus 2025. That reflects, of course, the fact that we have in part new geographies cleared with da Vinci 5. You should also expect a higher mix of Xir. That's going to be ASPs that are quite a bit below where Xi is today, but we haven't said yet what the Xir price range is likely to be. And I would expect higher trade-ins. And so there's a set of offsetting mix dynamics there that, frankly, we'll let you model. I'd just also say in terms of system ASPs, of course, that is only on systems purchased, which roughly is about half of the system placements today.
Speaker #1: Obviously , we don't guide capital . I just say you should expect a higher DaVinci mix in 26 versus 25 . That reflects , of course , the fact that we have , in part , new geographies cleared with da Vinci five .
Speaker #1: You should also expect a higher mix of Tsar . That's going to be ASC ASPs that are quite a bit below where she is today , but we haven't said yet what the price range is likely to be , and I would higher expect trade ins .
Speaker #1: And so there's a set of offsetting mix dynamics there that frankly , will let you model . I just also say in terms of system ASPs , of course , that is only on systems purchased , which roughly is about half of the system placements today .
Larry Biegelsen: Thank you.
Operator: Thank you so much. One moment for our next question. And he comes from the line of Robbie Marcus with J.P. Morgan. Please proceed.
Speaker #6: Thank you .
Jamie Samath: One moment for our next question. And he comes from the line of Robbie Marcus with J.P. Morgan. Please proceed. Hi. Thanks for taking the questions, and congratulations again on a great quarter. Jamie, you touched on this a little bit, but I was hoping you could give a little more color into the gross margin and OPEX assumptions. There's obviously a lot of moving pieces under the hood. Wondering if you could tease out some of them as we think about how Xir ramps and impacts, or positively or negatively, margins and trade-ins, and then what's assumed at the high and the low end of the OPEX expense. And I have a follow-up. Yeah, with respect to gross margin, there's actually a number of dynamics. You have the higher trade-ins that we just described. You have a higher mix of da Vinci 5 that's not yet at target product costs.
Speaker #3: Thank you so much. One moment for our next question. And it comes from the line of Robbie Marcus with J.P. Morgan.
Robbie Marcus: Hi. Thanks for taking the questions, and congratulations again on a great quarter. Jamie, you touched on this a little bit, but I was hoping you could give a little more color into the gross margin and OPEX assumptions. There's obviously a lot of moving pieces under the hood. Wondering if you could tease out some of them as we think about how Xir ramps and impacts, or positively or negatively, margins and trade-ins, and then what's assumed at the high and the low end of the OPEX expense. And I have a follow-up.
Speaker #3: Please proceed .
Speaker #7: Hi . Thanks for taking the questions and congratulations again on a great quarter . Jamie , you touched on this a little bit , but I was hoping you could give a little more color into the gross margin .
Speaker #7: And opex assumptions. There's obviously a lot of moving pieces under the hood. Wondering if you could tease out some of them.
Speaker #7: You know, as we think about how Zaur ramps and impacts, or positively or negatively, margins and trade-ins, and then what's assumed at the high and the low end of the opex expense.
Jamie Samath: Yeah, with respect to gross margin, there's actually a number of dynamics. You have the higher trade-ins that we just described. You have a higher mix of da Vinci 5 that's not yet at target product costs. The procedure guidance is reflected in that gross margin range. We also have had, for a couple of years now, kind of post-COVID recovery, a number of product cost reduction efforts that have had a growing impact within what you see in gross margin.
Speaker #7: And I have a follow up .
Speaker #1: With respect to gross margin, there are actually a number of dynamics. You have the higher trade-ins that we just described, and you have a higher mix of Da Vinci five.
Speaker #1: That's not yet at target product costs. The procedure guidance is reflected in that gross margin range. We also have had, for a couple of years now, kind of post-COVID recovery.
Jamie Samath: The procedure guidance is reflected in that gross margin range. We also have had, for a couple of years now, kind of post-COVID recovery, a number of product cost reduction efforts that have had a growing impact within what you see in gross margin. In 2025, you saw the impact of all the new facilities with incremental depreciation of facility costs, and that starts to get leveraged in 2026. And so there's a set of offsetting dynamics there in gross margin, the kind of net to the guidance that we provided, which effectively is flattish. I would highlight again, we have 120 basis points of tariffs reflected in the 2026 guidance. That was about 65 basis points in 2025, so an incremental 50-ish basis points from tariffs.
Speaker #1: A number of product cost reduction efforts that have had a growing impact within what you see in gross margin in 25 , you saw the impact of all the new facilities with incremental depreciation of facility costs , and that starts to start to get leveraged in 26 .
In 2025, you saw the impact of all the new facilities with incremental depreciation of facility costs, and that starts to get leveraged in 2026. And so there's a set of offsetting dynamics there in gross margin, the kind of net to the guidance that we provided, which effectively is flattish. I would highlight again, we have 120 basis points of tariffs reflected in the 2026 guidance. That was about 65 basis points in 2025, so an incremental 50-ish basis points from tariffs. With respect to Xir, like I said, we expect the pricing to be lower than currently what you pay for a new Xi, but the margins are relatively healthy on Xir. Great.
Speaker #1: And so there's a set of offsetting dynamics there in gross margin that kind of net to the guidance that we provided, which effectively is flattish.
Speaker #1: I would highlight again, we have 120 basis points of tariffs reflected in the '26 guidance. That was about 65 basis points in '25.
Speaker #1: So, an incremental 50 basis points from tariffs with respect to Xia, like we said, expect the pricing to be lower than currently.
Jamie Samath: With respect to Xir, like I said, we expect the pricing to be lower than currently what you pay for a new Xi, but the margins are relatively healthy on Xir. Great. Appreciate that. And quick follow-up. You mentioned increased price and competition in China. I saw there was a new reimbursement program put out. Some helps favor local competition. I was wondering if you could just comment on how you think about your position in China and your ability to continue to win there, and also if you have any update on the latest tender. Yeah, I might start. So just to answer that question specifically, around the local robotic competitors that are in China, as you know, many of the architectures are very similar to Xi. And over time, there are instances where they may be favored by home provinces.
Speaker #1: What you pay for a new XY, but the margins are relatively healthy on Xia.
Robbie Marcus: Appreciate that. And quick follow-up. You mentioned increased price and competition in China. I saw there was a new reimbursement program put out. Some helps favor local competition. I was wondering if you could just comment on how you think about your position in China and your ability to continue to win there, and also if you have any update on the latest tender.
Speaker #7: Great . Appreciate that . And a quick follow up . You mentioned increased pricing competition in China . I saw there were , you know , a new reimbursement program put out some helps favor local competition .
Speaker #7: I was wondering if you could just comment on how you think about your position in China and your ability to continue to win there.
Speaker #7: And also, if you have any update on the latest tender.
Dave Rosa: Yeah, I might start. So just to answer that question specifically, around the local robotic competitors that are in China, as you know, many of the architectures are very similar to Xi. And over time, there are instances where they may be favored by home provinces.
Speaker #5: Yeah , I might , I might start . So just to answer that question specifically around the local robotic competitors that are in China , many , as you know , many of the architectures are very similar to XY and over time there are instances where they may be favored by home provinces and certainly over the past several quarters , the number of robotic companies in China have been increasing .
Jamie Samath: Certainly, over the past several quarters, the number of robotic companies in China has been increasing. As a result, what you see is that pricing has become even more intense as tenders are published and competed for. So given that sort of environment, you look at how we are competing. That's with a Xi system. We're manufacturing it locally. We have a very strong team in China. So feel very good about how we're positioned with our system, our team, or the broader ecosystem to compete in China with those local robotic companies that are increasingly coming to market. We believe we can do so at a price point that is healthy for them and healthy for us and can effectively compete on price where we want to and where it matters. Robbie, I'll just add there's about 273 systems left in the current quota.
Certainly, over the past several quarters, the number of robotic companies in China has been increasing. As a result, what you see is that pricing has become even more intense as tenders are published and competed for. So given that sort of environment, you look at how we are competing. That's with a Xi system. We're manufacturing it locally. We have a very strong team in China. So feel very good about how we're positioned with our system, our team, or the broader ecosystem to compete in China with those local robotic companies that are increasingly coming to market. We believe we can do so at a price point that is healthy for them and healthy for us and can effectively compete on price where we want to and where it matters.
Speaker #5: And as a result , what you see is that pricing has become even more intense as tenders are published and competed for . So given that sort of environment , you look at , how are we competing ?
Speaker #5: And that's with an excise system . We're manufacturing a have a We very locally . strong team in China . And so feel very good about how we're positioned with our system .
Speaker #5: Our team or the broader ecosystem to compete in , in China with those local robotic companies that are that are increasingly coming to market .
Speaker #5: And we believe we can do so at a at a price point that is that is healthy for them . And healthy for us and can do and can effectively compete on price where we want to and where it matters .
Jamie Samath: Robbie, I'll just add there's about 273 systems left in the current quota. And I would just say, as we said in the prepared remarks, the tender win ratio was lower in Q4. If you look at 2025 as a whole, it was slightly higher than the prior year. And obviously, Dave described our ability to compete. I think I missed, Robbie, your question on OPEX. So I would just say in that 11% to 15% range, it does reflect the impact of going direct in Italy, Spain, and Portugal, but the range mostly is in relation to the procedure range.
Speaker #1: Robbie, I’d just say there’s about 273 systems left in the current quarter, and I would just say, as we said in the prepared remarks, the tender win ratio was lower in Q4.
Jamie Samath: And I would just say, as we said in the prepared remarks, the tender win ratio was lower in Q4. If you look at 2025 as a whole, it was slightly higher than the prior year. And obviously, Dave described our ability to compete. I think I missed, Robbie, your question on OPEX. So I would just say in that 11% to 15% range, it does reflect the impact of going direct in Italy, Spain, and Portugal, but the range mostly is in relation to the procedure range. Fantastic. Thanks a lot. Thank you. Our next question comes from the line of Rick Wise with Stifel. Please proceed. Good afternoon. Hi, Dave. Hi, Jamie. Dave, I was reflecting on your comment, your words. If I'm quoting you accurately, you said you still see Intuitive as being in the early stages of your journey.
Speaker #1: If you look at 2025 as a whole , it was slightly higher than the prior year . And obviously , as Dave described , our ability to compete , I think I missed Robbie .
Speaker #1: Your question on OpEx. So, I would just say in that 11% to 15% range, it does reflect the impact of going direct in Italy, Spain, and Portugal.
Speaker #1: But the range mostly is in relation to the procedure range.
Robbie Marcus: Fantastic. Thanks a lot.
Operator: Thank you. Our next question comes from the line of Rick Wise with Stifel. Please proceed.
Speaker #7: Fantastic. Thanks a lot.
Speaker #3: Thank you. Our next question comes from the line of Rick Weiss with Stifel. Please proceed.
Rick Wise: Good afternoon. Hi, Dave. Hi, Jamie. Dave, I was reflecting on your comment, your words. If I'm quoting you accurately, you said you still see Intuitive as being in the early stages of your journey.
Speaker #8: Good afternoon . Hi , Dave . Hi , Jamie . Dave , I was reflecting on your comment . Your words . You know , if I'm quoting you accurately , you said you still see intuitive as being in the early stages of your journey .
Jamie Samath: I mean, that's similar language I've heard from Intuitive for years. I was reflecting on it in the context of a slide you posted during the J.P. Morgan comments a couple of weeks ago about 9 million procedures in direct line of sight. I went back and looked at 2024, and you all said 7 million at the time. That's nearly a 30% increase in procedures in direct line of sight. I just wondered, I'm guessing maybe the cardiac opportunity, is that part of it? Is it the ambulatory surgery opportunity? Is it something instrument-specific? Just, I was hoping you'd just reflect on that with me and us and maybe unpack that a little bit. Hi. Thank you for the question.
I mean, that's similar language I've heard from Intuitive for years. I was reflecting on it in the context of a slide you posted during the J.P. Morgan comments a couple of weeks ago about 9 million procedures in direct line of sight. I went back and looked at 2024, and you all said 7 million at the time. That's nearly a 30% increase in procedures in direct line of sight. I just wondered, I'm guessing maybe the cardiac opportunity, is that part of it? Is it the ambulatory surgery opportunity? Is it something instrument-specific? Just, I was hoping you'd just reflect on that with me and us and maybe unpack that a little bit.
Speaker #8: I mean, that's similar language I've heard from Intuitive for years, and I was reflecting on it in the context of the slide.
Speaker #8: You posted during the JP Morgan conference a couple of weeks ago, about $9 million in direct line seizures of sight back, and went and looked at 24.
Speaker #8: And you all said 7 million at the time . That's nearly a 30% increase in procedures in direct line of sight . And I just wanted wondered , is I'm guessing maybe the cardiac opportunity is that part of it is the ambulatory surgery opportunity is is is it , you know , something instrument specific ?
Speaker #8: I was just hoping you would reflect on that with me and us, and maybe unpack that a little bit.
Dave Rosa: Hi. Thank you for the question. Maybe I'll comment on the early part of the journey, at least as I meant it with my words, and then Dan and Jamie can jump in. When I think about the journey with the ultimate destination, really improving outcomes substantially, eliminating complications to the extent that we possibly can. You choose a procedure today, and there's still variability. There are still poor outcomes for a given set of patients, even in the very best of hands with the very best of technology. So that's when I think about the journey. It's the journey of impacting patients meaningfully and more than we even have today.
Speaker #5: I thank you for the question. And maybe I'll comment on the early part of the journey, at least as I meant it with my words.
Jamie Samath: Maybe I'll comment on the early part of the journey, at least as I meant it with my words, and then Dan and Jamie can jump in. When I think about the journey with the ultimate destination, really improving outcomes substantially, eliminating complications to the extent that we possibly can. You choose a procedure today, and there's still variability. There are still poor outcomes for a given set of patients, even in the very best of hands with the very best of technology. So that's when I think about the journey. It's the journey of impacting patients meaningfully and more than we even have today. With respect to the line of sight procedures and the growth and how that has increased over the years, maybe I'll look to Dan. Yeah, Rick, 2024, seven million, 2025, eight million, 2026, nine million.
Speaker #5: And then Dan and Jamie can jump in . You know , when I when I think about the journey with the the ultimate destination , really improving outcomes substantially , you know , eliminating complications to the extent that we possibly can .
Speaker #5: And I , you know , choose a you procedure today variability . There and still there's very poor outcomes given set of patients , even very best of in the hands , with the very best of technology .
Speaker #5: And so that's what I when I think about the journey , it's the journey of impacting patients . You know , meaningfully and we more than even have today .
Jamie Samath: With respect to the line of sight procedures and the growth and how that has increased over the years, maybe I'll look to Dan.
Speaker #5: With respect to the line of sight procedures and the growth, and how that has increased over the years, maybe I'll look to Dan.
Dan Connally: Yeah, Rick, 2024, seven million, 2025, eight million, 2026, nine million. I'd say primarily strengthening clinical validation and supportive economics and benign procedures, kind of the largest impact. Also saw modest impact from additional procedure clearances like nipple-sparing mastectomy, SP in the US. And then lastly, contributing as well, kind of demographic impact from an aging population. So generally consistent with prior increases and the factors underneath that, generally consistent as well.
Speaker #2: Yeah . Rick 2024 7,000,025 8,000,026 . You know , 9 million , I'd say primarily strengthening clinical validation and supportive economics and benign procedures , kind of the largest impact also saw modest impact from additional procedure clearances like nipple sparing mastectomy , esp in the US .
Jamie Samath: I'd say primarily strengthening clinical validation and supportive economics and benign procedures, kind of the largest impact. Also saw modest impact from additional procedure clearances like nipple-sparing mastectomy, SP in the US. And then lastly, contributing as well, kind of demographic impact from an aging population. So generally consistent with prior increases and the factors underneath that, generally consistent as well. Okay. And just a quick follow-up. Dave, you also highlighted digital subscription. And I'm just not sure if I've personally, maybe I've missed it, heard that language. It sounds like a positive economic factor, something potentially incremental. Again, could you just expand on your comments and what it might mean to the growth outlook or adoption of da Vinci 5, etc.? Thank you both. Yeah, I'll take that, Rick. So Dave was referring to MIA Plus, which comes with da Vinci 5. It incorporates telepresence, integrated skill simulation, and Case Insights.
Speaker #2: And then, lastly, contributing as well—kind of demographic impact from an aging population. So generally consistent with prior increases, and the factors underneath that are generally consistent as well.
Rick Wise: Okay. And just a quick follow-up. Dave, you also highlighted digital subscription. And I'm just not sure if I've personally, maybe I've missed it, heard that language. It sounds like a positive economic factor, something potentially incremental. Again, could you just expand on your comments and what it might mean to the growth outlook or adoption of da Vinci 5, etc.? Thank you both.
Speaker #8: Okay . And just a quick follow up , Dave , you also highlighted digital subscription and I'm just not sure if I've personally maybe I've missed it .
Speaker #8: I heard that language. It sounds like a positive economic factor, and something potentially incremental. Again, could you just expand on your comments and what it might mean to the growth outlook or adoption of Da Vinci?
Jamie Samath: Yeah, I'll take that, Rick. So Dave was referring to MIA Plus, which comes with da Vinci 5. It incorporates telepresence, integrated skill simulation, and Case Insights. When we launched da Vinci 5, that package came with one year free use for customers. We actually did a significant software update in Q2 of last year. And so we extended that free period for customers. Technically, what happened when we did that was a portion of the system purchase price got carved out of systems revenue and deferred and put into service revenue over time, just the way the accounting rules work.
Speaker #8: Etc.? Thank you both.
Speaker #5: Yeah .
Speaker #1: I'll take that . Rick . So Dave was referring to Emia plus , which comes with DaVinci five . It incorporates telepresence , integrated skill simulation , and case insights .
Jamie Samath: When we launched da Vinci 5, that package came with one year free use for customers. We actually did a significant software update in Q2 of last year. And so we extended that free period for customers. Technically, what happened when we did that was a portion of the system purchase price got carved out of systems revenue and deferred and put into service revenue over time, just the way the accounting rules work. Come Q2-ish of 2026, then customers now have the opportunity to renew for that subscription package where they'll now have to pay. And in the end, then the value that surgeons and customers are experiencing with that package would determine both what is the renewal rate and what is the ASP that we realize. With respect to the Case Insights portion of that package, we've got good early customer feedback.
Speaker #1: When we launched DaVinci Five, that package came with one year of use for free for customers. We did a significant software update in actually Q2 of last year, and so we extended that free period for customers.
Speaker #1: Technically, what happened when we did that was a portion of the system purchase price got carved out of systems revenue and deferred, and put into service revenue over time.
Come Q2-ish of 2026, then customers now have the opportunity to renew for that subscription package where they'll now have to pay. And in the end, then the value that surgeons and customers are experiencing with that package would determine both what is the renewal rate and what is the ASP that we realize. With respect to the Case Insights portion of that package, we've got good early customer feedback.
Speaker #1: Just the way the accounting rules work, come Q2-ish of '26, then customers now have the opportunity to renew for that subscription package, where they'll now have to pay.
Speaker #1: And in the end, then the value that surgeons and customers are experiencing with that package would determine both. What is the renewal rate, and what is the ASP that we realize with respect to the Case Insights portion of that package?
Speaker #1: We've got good early customer feedback. I think we have some work to do to continue to refine and enhance the capability, I think, there.
Jamie Samath: I think we have some work to do to continue to refine and enhance the capability there. I think we see long-term value in what that could ultimately do. It also has quite a bit of synergy with force feedback, which has not been in full supply. So as we get that into full supply later this year, you then get to kind of see the impact of force more clearly in the Case Insights reporting that gets done. So there is then some invoicing that we'll do for customers that renew, and that starts to get reflected in revenue. Great answer. Thanks so much, Jamie. Thank you. Our next question comes from the line of David Roman with Goldman Sachs. Please proceed. Thank you. Good afternoon, everybody. I wanted to maybe come back to SP.
I think we have some work to do to continue to refine and enhance the capability there. I think we see long-term value in what that could ultimately do. It also has quite a bit of synergy with force feedback, which has not been in full supply. So as we get that into full supply later this year, you then get to kind of see the impact of force more clearly in the Case Insights reporting that gets done. So there is then some invoicing that we'll do for customers that renew, and that starts to get reflected in revenue.
Speaker #1: we And I see long term value in what that could ultimately do . It also has quite a bit of synergy with force feedback , which has not been in full supply .
Speaker #1: And so as we get that into full supply later this year, you then get to kind of see the impact of force more clearly in the case insights reporting that gets done.
Speaker #1: And so there is then some invoicing that we'll do for customers that renew, and that starts to get reflected in revenue.
Rick Wise: Great answer. Thanks so much, Jamie.
Operator: Thank you. Our next question comes from the line of David Roman with Goldman Sachs. Please proceed.
Speaker #8: Great answer. Thanks so much, Jamie.
Speaker #3: Thank you. Our next question comes from the line of David Roman with Goldman Sachs. Please proceed.
David Roman: Thank you. Good afternoon, everybody. I wanted to maybe come back to SP. It seems like the second half of 2025 represented, at least in the US, the potential of putting in place the dynamics you need to really see an inflection in growth in both SP placements as well as associated procedures. As you kind of look at the portfolio and indications you have entering 2026, is there anything left either from a technology standpoint, maybe a vessel sealer that you think would be necessary to really unlock the opportunity? And how you're thinking about the SP strategy now that you have a more full portfolio of instruments as well as indications? And I had one follow-up.
Speaker #9: Thank you. Good afternoon, everybody. I wanted to maybe come back to SPX, and it seems like the second half of 2025 represented, at least in the US, the potential of putting in place the dynamics.
Jamie Samath: It seems like the second half of 2025 represented, at least in the US, the potential of putting in place the dynamics you need to really see an inflection in growth in both SP placements as well as associated procedures. As you kind of look at the portfolio and indications you have entering 2026, is there anything left either from a technology standpoint, maybe a vessel sealer that you think would be necessary to really unlock the opportunity? And how you're thinking about the SP strategy now that you have a more full portfolio of instruments as well as indications? And I had one follow-up. Thanks, David. It's Dan. I think, broadly, very encouraged by the response to the technology and the procedure growth rates that we've seen here recently. Looking to continue to build the platform internationally. We're still relatively early: Europe, Japan, and Taiwan.
Speaker #9: You need to really see an inflection in growth in in both SPX placements as well as associated procedures . As you kind the of look at and have portfolio indications , entering 2026 , you is there anything left either from a technology standpoint , maybe a vessel sealer that you think would be necessary to really unlock the opportunity and how you're thinking about the SPX strategy now that you have a more full portfolio of instruments as well as a indications that I had one , one follow up .
Dan Connally: Thanks, David. It's Dan. I think, broadly, very encouraged by the response to the technology and the procedure growth rates that we've seen here recently. Looking to continue to build the platform internationally. We're still relatively early: Europe, Japan, and Taiwan.
Speaker #2: Thanks, David. It's Dan. I think I'm probably very encouraged by the response to the technology and the procedure growth rates that we've seen here recently.
Speaker #2: Looking to continue to build the platform in internationally . We're still relatively early Europe , Japan and Taiwan then in the . And US with recent clearances , colorectal , thoracic and NSM indications as well .
Jamie Samath: Then in the US, with recent clearances: colorectal, thoracic, and NSM indications as well. You mentioned on instrumentation; we do need to continue development of the vessel sealer device, add that clearance, and then add stapler clearances globally. I think we're encouraged by the early feedback from initial launch on SP stapler, thoracic, and colorectal, and excited to bring that forward more fully. I'd say over time, we've also got the opportunity to take SP to additional geographies as well. Okay. Then maybe on the guidance, I think you talked about reflecting some of the risk around macro pressures, whether those are hospital purchasing on Medicaid cuts or potential changes in utilization associated with exchange subsidies expiring. Could you just help us understand how you saw these dynamics play out to the back half of 2025?
Then in the US, with recent clearances: colorectal, thoracic, and NSM indications as well. You mentioned on instrumentation; we do need to continue development of the vessel sealer device, add that clearance, and then add stapler clearances globally. I think we're encouraged by the early feedback from initial launch on SP stapler, thoracic, and colorectal, and excited to bring that forward more fully. I'd say over time, we've also got the opportunity to take SP to additional geographies as well.
Speaker #2: You mentioned on instrumentation, we do need to continue development of the vessel sealer device. Add that clearance, and then add stapler clearances globally.
Speaker #2: I think we're encouraged by the early feedback from the initial launch on SPX thoracic, colorectal, and stapler, and excited to bring that forward more fully.
Speaker #2: And I'd say, over time, we've also got the opportunity to take SPX to additional geographies as well.
David Roman: Okay. Then maybe on the guidance, I think you talked about reflecting some of the risk around macro pressures, whether those are hospital purchasing on Medicaid cuts or potential changes in utilization associated with exchange subsidies expiring. Could you just help us understand how you saw these dynamics play out to the back half of 2025? I know in Q3, you talked about the potential of some pull forward of procedure volumes. What you saw kind of exiting the year and how you're kind of observing trend here early in January?
Speaker #9: Okay . And then maybe on the guidance , I think you talked about reflecting some of the risk around macro pressures . Pressures , whether those are hospital purchasing on Medicaid cuts or potential changes in utilization associated with the subsidies expiring .
Speaker #9: Can you just help us understand how you saw these dynamics play out through the back half of 2025 ? I know in Q3 , you talked about the potential of some pull forward of procedure volumes , what you saw kind of exiting the year , and how you're kind of observing trend here early in January .
Jamie Samath: I know in Q3, you talked about the potential of some pull forward of procedure volumes. What you saw kind of exiting the year and how you're kind of observing trend here early in January? Yeah, no specific comment on kind of early trend in January, but I'd say over Q4, do not have any evidence either way from an impact, but we haven't heard that from customers at all. I know we spoke about that potentially in Q3 related to some intra-quarter dynamics there, but have not heard that from customers more broadly recently. Operator, I think we've got time for one more question. Thank you so much. One moment. All right. And our last question comes from the line of Patrick Wood with Morgan Stanley. Please proceed. Beautiful. Thank you so much for the question.
Dan Connally: Yeah, no specific comment on kind of early trend in January, but I'd say over Q4, do not have any evidence either way from an impact, but we haven't heard that from customers at all. I know we spoke about that potentially in Q3 related to some intra-quarter dynamics there, but have not heard that from customers more broadly recently. Operator, I think we've got time for one more question.
Speaker #2: Yeah , no specific comment on kind of early trend in January , but I'd say over , you know , Q4 do not have any evidence either way from an impact , but we haven't heard that from customers at all .
Speaker #2: I know we spoke about that potentially in Q3 related to some intra-quarter dynamics there, but have not heard that from customers more broadly recently.
Operator: Thank you so much. One moment. All right. And our last question comes from the line of Patrick Wood with Morgan Stanley. Please proceed.
Speaker #2: Operator, I think we've got time for one more question.
Speaker #3: Thank you so much. One moment. All right. And our last question comes from the line of Patrick Wood with Morgan Stanley.
Patrick Wood: Beautiful. Thank you so much for the question. I guess conceptually, thinking medium term into the future, how do you guys think about new form factors and cost competition? We've talked about lower acuity cases and going down. Is the solution here in your mind a lower-end form factor, or do we stick with refurbished systems? Or is it the case that you think you can get to the point where speed and innovation is getting us faster than lap with a lower cost curve than lap, and that's the solution to the lower acuity? So is it a lower form factor, or is it getting the tech to the point where automation and speed is just better than lap anyway? Thanks.
Speaker #3: Please proceed .
Speaker #9: Beautiful .
Jamie Samath: I guess conceptually, thinking medium term into the future, how do you guys think about new form factors and cost competition? We've talked about lower acuity cases and going down. Is the solution here in your mind a lower-end form factor, or do we stick with refurbished systems? Or is it the case that you think you can get to the point where speed and innovation is getting us faster than lap with a lower cost curve than lap, and that's the solution to the lower acuity? So is it a lower form factor, or is it getting the tech to the point where automation and speed is just better than lap anyway? Thanks. Yeah, it's an interesting question. I will turn it back around to the problem to be solved. I think it varies depending on where you look.
Speaker #10: Thank you so much for the for the question . I guess conceptually thinking , you know , medium term into the future . How do you guys think about , you know , new form factors and cost competition ?
Speaker #10: You know, we've talked about lower acuity cases, and going down is the solution here in your mind. Like a lower-end form factor.
Speaker #10: Or do we stick with, you know, refurbished systems, or is it the case that you think you can get to the point where, you know, speed and innovation is getting us faster than lap, with a lower cost curve than lap?
Speaker #10: And that's the solution to the lower acuity. So is it a lower form factor, or is it getting the tech to the point where automation and speed are just better than lap?
Dave Rosa: Yeah, it's an interesting question. I will turn it back around to the problem to be solved. I think it varies depending on where you look. And so if you're in a complex cancer procedure where you're trying to move the needle on, let's say, cancer margins, it's going to require a different solution set than if you're looking for routine use in an ambulatory setting that is working on a very different set of procedures. And so I think we don't have enough time to look through each one of those areas of where customers are trying to work in particular.
Speaker #10: Anyway , thanks .
Speaker #5: it's an Yeah , interesting question . And I will turn it back around to the problem to be solved , you know , and , and I think it varies depending on where you look .
Jamie Samath: And so if you're in a complex cancer procedure where you're trying to move the needle on, let's say, cancer margins, it's going to require a different solution set than if you're looking for routine use in an ambulatory setting that is working on a very different set of procedures. And so I think we don't have enough time to look through each one of those areas of where customers are trying to work in particular. If we focus on, let's say, the ASC setting, I'd go back to what we described before and say what is required there is great clinical outcomes, routine use, repeatable use, reliability. Those parts of the needs there that exist, I think, are really well served by the existing ecosystem that we have today. Can it be optimized through new platform development or some other tweaks within the ecosystem? Maybe.
Speaker #5: And so, if you're in a complex cancer procedure where you're trying to move the needle on, let's say, cancer margins, it's going to require a different solution.
Speaker #5: A set than if you're looking for. Routine use in an ambulatory setting. That is working on a very different set in procedures.
Speaker #5: And so I , you know , I think we don't have enough time to to look through each one of those areas of where customers are trying to work , in particular , if we focus on , let's say , the ASC setting , I'd go back to what we described before and say what ?
If we focus on, let's say, the ASC setting, I'd go back to what we described before and say what is required there is great clinical outcomes, routine use, repeatable use, reliability. Those parts of the needs there that exist, I think, are really well served by the existing ecosystem that we have today. Can it be optimized through new platform development or some other tweaks within the ecosystem? Maybe.
Speaker #5: What is required there that is great is clinical outcomes, routine use, repeatable use, and reliability. Those parts of the needs that exist there, I think, are really well served by the existing ecosystem that we have today.
Speaker #5: You know , can it can it be optimized through new platform development or some other tweaks within the ecosystem ? Maybe , you know , we'd have to go see and see what that looks like .
Jamie Samath: We'd have to go see and see what that looks like. But today, I think what we have can serve the complex portion of the procedures customers are trying to do, as well as these lower acuity, higher volume ones. Patrick, I'd just add that I think segmentation can be important depending on the IDN, and you can segment by using DV5 across a broad set of procedures that can do cancer and whatever other procedures are done in the hospital. But you can also segment by a HOPD or by an ASC. And where we are today, we have the portfolio to do that. I think we have confidence in that. Of course, things change over time, and I think that's part of our strategic planning. And we wouldn't comment on how we might further develop that just yet. Love it. Thanks, guys. Okay. That was our last question.
We'd have to go see and see what that looks like. But today, I think what we have can serve the complex portion of the procedures customers are trying to do, as well as these lower acuity, higher volume ones. Patrick, I'd just add that I think segmentation can be important depending on the IDN, and you can segment by using DV5 across a broad set of procedures that can do cancer and whatever other procedures are done in the hospital. But you can also segment by a HOPD or by an ASC. And where we are today, we have the portfolio to do that. I think we have confidence in that. Of course, things change over time, and I think that's part of our strategic planning. And we wouldn't comment on how we might further develop that just yet.
Speaker #5: But but today I think what we have can serve the complex portion of the procedures . Customers are trying to do , as well as these lower acuity , higher volume ones .
Speaker #1: Patrick, I just add that I think segmentation can be important depending on the IDN. And you can segment by using DB5 across a broad set of procedures that can do cancer and whatever other procedures are done in the hospital.
Speaker #1: But you can also segment by HOPD or by NAS, and where we are today, we have the portfolio to do that. I think we have confidence in that.
Speaker #1: Of course, things change over time, and I think that's part of our strat planning. We wouldn't comment on how we might further develop that just yet.
Patrick Wood: Love it. Thanks, guys. Okay. That was our last question.
Speaker #10: Love it. Thanks, guys.
Jamie Samath: Thank you for the questions. In closing, we continue to believe there's a substantial and durable opportunity to fundamentally improve surgery and acute interventions. Our teams continue to work closely with hospitals, physicians, and care teams in pursuit of what our customers have termed the Quintuple aim: better and more predictable patient outcomes, better experiences for patients, better experiences for their care teams, lower total cost of care, and finally, increased access to care. We believe value creation in surgery and acute care is foundationally human. It flows from respect for and understanding of patients and care teams and their needs and their environment. At Intuitive, we envision a future of care that is less invasive and profoundly better, where diseases are identified earlier and treated quickly so patients can get back to what matters most. Thank you for your support on this extraordinary journey.
Jamie Samath: Thank you for the questions. In closing, we continue to believe there's a substantial and durable opportunity to fundamentally improve surgery and acute interventions. Our teams continue to work closely with hospitals, physicians, and care teams in pursuit of what our customers have termed the Quintuple aim: better and more predictable patient outcomes, better experiences for patients, better experiences for their care teams, lower total cost of care, and finally, increased access to care. We believe value creation in surgery and acute care is foundationally human. It flows from respect for and understanding of patients and care teams and their needs and their environment.
Speaker #5: that was Okay , our last question . Thank you for the questions . In closing , we continue to believe there's a substantial and durable opportunity to fundamentally improve surgery and acute interventions .
Speaker #5: Our teams continue to work closely with hospitals, physicians, and care teams in pursuit of what our customers have termed the Quintuple Aim.
Speaker #5: Better and more predictable patient outcomes , better experiences for patients , better experiences for their care teams , lower total cost of care , and finally , increased access to care .
Speaker #5: We believe value creation in surgery and acute care is human. It foundationally flows from respect for and understanding of patients and care teams, their needs, and their environment.
At Intuitive, we envision a future of care that is less invasive and profoundly better, where diseases are identified earlier and treated quickly so patients can get back to what matters most. Thank you for your support on this extraordinary journey. We look forward to talking with you again in three months.
Speaker #5: At Intuitive, we envision a future of care that is less invasive and profoundly better. Where diseases are identified earlier and treated quickly so patients can get back to what matters most.
Speaker #5: Thank you for your support on this extraordinary journey. We look forward to talking with you again in three months.
Jamie Samath: We look forward to talking with you again in three months. This concludes today's conference. Thank you all for participating, and you may now disconnect.
This concludes today's conference. Thank you all for participating, and you may now disconnect.
