Intuitive Surgical’s second-quarter revenue rose 18.5% to $2.9bn ($2.8bn expected), with system sales and recurring revenue streams growing at similarly strong rates.
Underlying operating profit was up 28.7% to $1.2bn ($1.1bn expected), driven by revenue growth, gross margin improvement and continued cost discipline.
Cash on hand rose by $0.7bn quarter-on-quarter, supported by strong cash generation from the business. Intuitive also spent $0.4bn on share buybacks.
Management kept full-year procedure growth guidance at 13.5-15.5% but expects the outcome to be closer to the 14.5% midpoint, against a backdrop of slower US growth. Underlying gross margin guidance improved slightly, helped by a better mix and lower tariff costs.
The shares fell 10.8% in after-hours trading.
Our view
Intuitive Surgical delivered another strong quarter, with revenue, profit and procedure growth all moving higher. But in a momentum-focused market, investors zoned in on slowing US procedure growth and the lack of a clear upgrade, putting the valuation under further pressure.
The company is the market leader in the complex field of robotic surgery. At around $2mn a piece, its flagship da Vinci systems aren’t cheap. But they can offer compelling benefits to both healthcare providers and patients, including reduced complication rates and a lower overall cost of care.
That has driven rapid adoption, with around 3.2mn procedures carried out using Intuitive’s platforms in 2025. With the latest da Vinci generation still early in its rollout, we see scope to expand the installed base and drive higher utilisation-led revenues. Once in place, the installed base generates high levels of recurring income from instruments, accessories and servicing.
US growth is being held back mainly by funding uncertainty, with demand for weight-loss surgery also pressured by the success of anti-obesity medication.. The funding backdrop is complex, but the evidence so far points more to delayed procedures than lost demand. Competitive threats, tariffs and pressure in China are also risks we are monitoring.
Innovation continues at pace, with $1.3bn spent on research and development in 2025. Ion, its platform for lung biopsies, continues to gain ground, and work on next-generation flexible robotic systems points to potential expansion into gastrointestinal surgery. Innovations such as force feedback, which enables more delicate movements by surgeons, also continue to extend the company’s competitive edge.
The company was also an early adopter of artificial intelligence (AI), an area we see further scope for monetisation. Market domination provides access to large and unique data sets. These pave the way for further breakthroughs such as remote surgery and automation. However, there’s no guarantee of commercial success.
Intuitive’s high levels of innovation are supported by a robust balance sheet and strong cash flows. Although the company doesn’t pay a dividend, the healthy financials supported $2.3bn of share buybacks last year. Buyback activity in 2026 also started strongly, but there’s no assurance that it will continue.
Intuitive looks well placed to stay at the forefront of surgical innovation, and the investment case remains supported by structural pressures to improve surgical outcomes, strong cash generation and the innovation pipeline. We think that recent valuation weakness offers an attractive entry point into a compelling growth story, although US pressures could continue to weigh on sector sentiment for now.
Environmental, social and governance (ESG) risk
The healthcare industry is medium/high risk in terms of ESG, depending on subindustry. Across the board, product governance is the most acute risk, with business ethics, labour relations and data privacy also contributing. Providing reasonable access to healthcare as a basic service is also a growing issue, with greater concerns surrounding the social implications of for-profit healthcare companies.
According to Sustainalytics, Intuitive Surgical’s management of ESG risks is strong and often ahead of the industry. Its surgical systems are subject to the relevant safety certifications, complemented by a robust internal product and safety programme. The advanced nature of Intuitive’s technology also requires specialist knowledge. That’s supported by initiatives for talent development and recruitment, reflected in a staff turnover rate below 10%.
Although it manages most material risks better than peers, it falls behind on its approach to eco-friendly product design and end of life product stewardship, although these issues are mentioned in its reporting.
Access to care for patients is another key ESG risk for the sector, and although Intuitive recognises this, its approach could be improved by setting targets and reporting on the progress of its initiatives
Intuitive Surgical key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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